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Adaptation through insurance: lessons from the NFIP

Adelle Thomas (Rutgers: The State University of New Jersey, Piscataway, New Jersey, USA)
Robin Leichenko (Rutgers: The State University of New Jersey, Piscataway, New Jersey, USA)

International Journal of Climate Change Strategies and Management

ISSN: 1756-8692

Article publication date: 2 August 2011




Insurance is widely regarded as a key adaptation option for climate change. Yet, the experience of the insurance sector in dealing with climatic hazards, particularly flooding, has been highly varied. Drawing from the experience of the US National Flood Insurance Program (NFIP), the purpose of this paper is to identify opportunities and challenges associated with using insurance as an adaptation strategy for climate change.


This article critically reviews the history and recent performance of the NFIP and considers lessons for climate change adaptation through insurance.


The US NFIP offers government‐subsidized flood insurance for firms and residences. Over its 40‐year history, the NFIP has struggled with financial instability and low levels of public participation in the program. The experience of the NFIP offers several lessons regarding the viability of insurance as an adaptation strategy: increasing insurance premiums to account for new climatic risks may mean that a growing segment of the population is unable or unwilling to purchase insurance, absent some other form of subsidization; educating the public on levels of risk and promoting appropriate risk mitigation are highly effective means for reducing damages from current and emerging weather‐related risks; and close public‐private cooperation is likely to be needed to prevent withdrawal of private insurers from high‐risk areas and to ensure that insurance coverage continues to be widely available.


Examination of past experience with insurance as a mechanism for climate adaptation offers lessons and insights that can inform development of effective strategies to address climate change.



Thomas, A. and Leichenko, R. (2011), "Adaptation through insurance: lessons from the NFIP", International Journal of Climate Change Strategies and Management, Vol. 3 No. 3, pp. 250-263.



Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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