Abstract: “Insurance can support recovery after costly flood events. While a large body of research evaluates many aspects of flood insurance in the context of residential property, insurance markets are relatively understudied with respect to vehicle assets and flood hazard. This study analyzes new data from a survey administered to vehicle owners in coastal New York and Texas. Survey questions gather information about respondents' vehicle flood exposure experiences, flood-related auto insurance literacy levels, insurance uptake rates, and willingness-to-pay (WTP) for a single-peril vehicle flood insurance product currently unavailable in the general consumer market. Findings indicate 59% of respondents have experienced significant vehicle flood damage in their lifetimes, with an average maximum damage amount of nearly $10,000 among affected respondents. On average, fewer than half of household vehicles were insured against vehicle flood damage. More than one-third of respondents were unaware "comprehensive coverage"— a multi-peril policy— is the type of auto insurance policy that covers vehicles against flooding, suggesting an insurance literacy gap that could impede risk management decisions. Preferred estimates indicate vehicle owners were willing to pay $182.46 ($167.89 to $196.88, 95% confidence interval) per year for a single-peril flood insurance policy to cover their household's most valuable vehicle against flooding. Results also suggest WTP increases with respondent income and level of objective flood exposure as measured by respondent Federal Emergency Management Agency Special Flood Hazard Area status. Overall, findings highlight vehicle flood damages are common and substantial in the coastal study area. Despite considerable WTP for vehicle flood insurance, insurance knowledge gaps appear to contribute to financial vulnerability among coastal vehicle owners.”
Bio: Steve Koller is a postdoctoral fellow in climate and housing at Harvard University's Joint Center for Housing Studies. Koller's research focuses on urban flood risk management, climate risk-exposed insurance markets, federal hazard mitigation and disaster programs, and building decarbonization. He previously worked as an Economics and Policy Analyst at the Environmental Defense Fund and as a summer associate at the RAND Corporation. He earned B.S and B.A. degrees from Penn State, a master’s degree from the University of California San Diego School of Global Policy and Strategy, and a Ph.D. in Environmental Science and Policy from the University of Miami Rosenstiel School of Marine, Atmospheric, and Earth Science.