Group Flood Insurance Program and flood Insurance Purchase Decisions

August 2004 (VOL. 22, NO. 2)

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This article describes a research project focusing on flood insurance purchase decisions of low-income residents of eastern North Carolina who are obliged to purchase an NFIP flood insurance policy as a result of having accepted a disaster assistance grant following Hurricane Floyd. A survey was sent to a random sample of these disaster assistance recipients and results show that, despite the obligation, as many as 41% do not purchase flood insurance. People say that they do not purchase flood insurance because they cannot afford it. The only significant predictor of flood insurance purchase for this population is the purchase of homeowner insurance.