NHESS Natural Hazards and Earth System Sciences NHESS Nat. Hazards Earth Syst. Sci. 1684-9981 Copernicus Publications Göttingen, Germany 10.5194/nhess-13-1691-2013 Influence of flood risk characteristics on flood insurance demand: a comparison between Germany and the Netherlands Seifert I. 1 Botzen W. J. W. 2 Kreibich H. https://orcid.org/0000-0001-6274-3625 3 Aerts J. C. J. H. 2 Norwegian Institute for Water Research (NIVA), Section for Climate and Environmental modelling, Oslo, Norway Institute for Environmental Studies, VU University, Amsterdam, the Netherlands Section Hydrology, German Research Centre for Geosciences (GFZ), Potsdam, Germany 01 07 2013 13 7 1691 1705 Copyright: © 2013 I. Seifert et al. 2013 This work is licensed under the Creative Commons Attribution 3.0 Unported License. To view a copy of this licence, visit https://creativecommons.org/licenses/by/3.0/ This article is available from https://nhess.copernicus.org/articles/13/1691/2013/nhess-13-1691-2013.html The full text article is available as a PDF file from https://nhess.copernicus.org/articles/13/1691/2013/nhess-13-1691-2013.pdf

The existence of sufficient demand for insurance coverage against infrequent losses is important for the adequate function of insurance markets for natural disaster risks. This study investigates how characteristics of flood risk influence household flood insurance demand based on household surveys undertaken in Germany and the Netherlands. Our analyses confirm the hypothesis that willingness to pay (WTP) for insurance against medium-probability medium-impact flood risk in Germany is higher than WTP for insurance against low-probability high-impact flood risk in the Netherlands. These differences in WTP can be related to differences in flood experience, individual risk perceptions, and the charity hazard. In both countries there is a need to stimulate flood insurance demand if a relevant role of private insurance in flood loss compensation is regarded as desirable, for example, by making flood insurance compulsory or by designing information campaigns.

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