To Insure or Not to Insure: How homeowners perceive flood risk

Abstract

While threats from sea level rise, hurricanes, and winter storms are increasing in coastal communities, Massachusetts flood insurance enrollments are not. In fact, participation in flood insurance policies has declined in recent years, particularly on Cape Cod, leaving homeowners vulnerable to increased risk. Economists Di Jin and Michael Weir (Woods Hole Oceanographic Institution) are working to understand coastal property owners’ perception of the risks associated with flooding and sea level rise and how they decide between purchasing flood insurance, investing in physical protections, like sea walls, or choosing to not protect their properties.

Flooding can not only be caused by storm surge, but also high tides and rainfall. Coastal properties in high risk areas have a 26% chance of flooding during a 30-year span, the typical timeframe of a home mortgage, and flood risk is only projected to get worse with increased sea level rise.

The research team is seeking feedback from coastal property owners in flood-prone areas in all fifteen towns on Cape Cod via an online survey and will share the results of their research with local homeowners as well as state and federal floodplain managers.