What Limitations Usually Apply to Flood Insurance Coverage?

A social or collective economic compensation method for economic losses caused by floods. ^{[1] In} order to cooperate with floodplain management, restrict unreasonable development of floodplains and reduce the social impact of floods, an insurance system is implemented for residents, associations, enterprises, institutions and other units living in floodplains. It belongs to one of the non-engineering measures for flood prevention. Generally there are two forms of voluntary insurance and compulsory insurance, the latter is more conducive to restricting unreasonable development of floodplains. Those who participate in flood insurance regularly pay insurance premiums to insurance companies at the prescribed insurance rate. Insurance companies pool insurance funds and establish insurance funds. When the property of the insured unit or individual suffers from flooding losses, the insurance institution shall compensate in accordance with the insurance regulations.

A social or collective economic compensation method for economic losses caused by floods. ^{[1] In} order to cooperate with floodplain management, restrict unreasonable development of floodplains and reduce the social impact of floods, an insurance system is implemented for residents, associations, enterprises, institutions and other units living in floodplains. It belongs to one of the non-engineering measures for flood prevention. Generally there are two forms of voluntary insurance and compulsory insurance, the latter is more conducive to restricting unreasonable development of floodplains. Those who participate in flood insurance regularly pay insurance premiums to insurance companies at the prescribed insurance rate. Insurance companies pool insurance funds and establish insurance funds. When the property of the insured unit or individual suffers from flooding losses, the insurance institution shall compensate in accordance with the insurance regulations.

Chinese name

Flood insurance

Foreign name

flood insurance

Development of flood insurance

The United States is an earlier country that introduced flood insurance. The United States Congress passed the Federal Flood Insurance Act in 1956, the National Flood Insurance Act in 1968, and the Emergency Flood Insurance Act in 1969. Since then, it has also been amended and supplemented in other provisions of the bill, and gradually moved from voluntary insurance to mandatory Insurance. After the implementation of the compulsory insurance policy, it will play a certain role in promoting national flood insurance. Britain, Australia, New Zealand, India and other countries have also started to implement flood insurance. In 1949, China established an insurance company. The state unifiedly operates insurance business. In the provisions of corporate property and family property insurance, it stipulates that it shall be liable for disasters caused by heavy rain, flood, tsunami, ice, mudslides, etc. Carry out. This has played a certain role in stabilizing the lives of residents after the disaster, restoring normal production and reducing the cost of state relief. However, as a flood insurance non-engineering measure, flood insurance was only piloted in the middle and lower reaches of the Huaihe River in the 1980s.

The significance of flood insurance

The implementation of flood insurance can slow down the losses of residents and businesses affected by floods, so that their losses are not paid in one installment but are repaid in installments. This has played a very important role in stabilizing the lives of the people, stabilizing the order of social production, and reducing the burden on the country. This is a way to change the burden of loss and is a major flood prevention non-engineering measure. The implementation of flood insurance is a major reform of China's disaster relief system and social flood protection.

Flood insurance is an important means for flood risk management in floodplains. It has significant investment savings, benefits, and low risks. The function of insurance is to convert the uncertain, unstable and huge disaster loss risk into deterministic, stable and small expenses. The combination of flood insurance and flood area management can effectively control the blind development of the economy in the flood area and reduce flood damage. If the economic development of the floodplain area is simply restricted, it will be more difficult to implement it. Using flood prevention insurance as an economic lever to adjust and control the economic development of the floodplain area, it is an effective method to implement the relevant laws and regulations on floodplain management. The majority of residents and units have participated in flood insurance, and they have to pay insurance costs every year to increase their awareness of flood prevention and establish a regular concept of disaster prevention. This is what we often call "raising vigilance and overcoming paralysis." "Mobilization" is more effective. In addition, more social forces can be mobilized to care about the flood prevention cause and promote the development of flood prevention construction.

Flood insurance

Flood insurance can be divided into: statutory insurance, also known as compulsory insurance, implemented by the state by administrative means of laws and decrees; voluntary insurance, which is established by the parties to the insurance on a voluntary basis through negotiation and conclusion of insurance contracts.

According to China's actual situation, it is appropriate to adopt a combination of statutory and voluntary insurance at this stage. In terms of flood insurance mechanism, the following three models can be adopted.

, single insurance

Single insurance means that the insurance company independently assumes all risks to handle flood insurance business, and the water conservancy and flood control departments provide information such as the scope of flood risks and opportunities for damage.

, agent

The insurance agent handles the insurance business for the insurance company. All risks are borne by the local flood insurance fund management department, and the insurance company only charges a part of the handling fee.

(3) Co-protection

Co-insurance means that the water conservancy and flood control departments and insurance companies cooperate to share risks, or the flood control department sets up a national flood reinsurance company.

Flood insurance development status of flood insurance in China

China's flood insurance business has just begun, and it needs to be widely publicized to improve the understanding of flood insurance at all levels of society and in combination with China's actual conditions, further study and improve various flood insurance systems and mechanisms in line with national conditions, so that Play a greater role in flood prevention.