| Abstract: | ABSTRACT: This paper presents evidence that currently published flood insurance premiums may be insufficient to cover expected losses in coastal areas subject to hurricane. The problems of developing flood premiums in coastal zones are discussed and Federal Insurance Administration (FIA) reaction to these problems analyzed. Flood losses in the coastal zone of Bay County, Florida due to hurricane Eloise are compared with losses which would be predicted by the FIA. This comparison raises important questions concerning the adequacy of flood premiums in coastal zones and the undesirable indirect effects that underpricing flood risk will have on location decisions in the coastal floodplain. |
