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Deductible Choice In Flood Insurance: Who Chooses The Maximum?, Timothy Dombrowski, R.Kelley Pace, Dimuthu Ratnadiwakara, V. Carlos Slawson
Deductible Choice In Flood Insurance: Who Chooses The Maximum?, Timothy Dombrowski, R.Kelley Pace, Dimuthu Ratnadiwakara, V. Carlos Slawson
College of Business Administration Faculty Works
Although some have proposed eliminating the National Flood Insurance Program (NFIP) to reduce government expenditures, other alternatives exist that could reduce the cost of the program and increase its viability, such as increasing deductibles, which may increase participation and revenue. The recently released FIMA NFIP Redacted Policies Data Set provides unprecedented opportunities to examine homeowner deductible choices for flood insurance policies using policy-level data. The menu of deductibles currently ranges from $1,000 to $10,000 in Special Flood Hazard Areas (SFHAs), but until April 1, 2015, the maximum deductible was $5,000. Using a matched sample of 252,280 SFHA policies that were …