Household preference and financial commitment to flood insurance in South East Queensland

Abstract

Many Queenslanders who were affected by the severe flood events in 2011 failed to recover their losses. Arrangements for flood insurance are under federal reviews in response to mounting public pressure. Against this backdrop, a household survey was conducted to solicit residents' preferences. The majority of interviewed residents favoured optional purchase of flood insurance. Non-insurance was associated with expectations of liberal assistance, indicating the possibility of 'moral hazard'. Willingness to pay for flood insurance was related to social influence. The non-insured households would spend more if they expected positive responses from people around. Attempts to reduce non-insurance should address aspects of social influence.