New publication: Vehicle flood damage and household disaster assistance in the United States

When reading news articles after a large-scale flood event, you’ve probably seen photos of cars underwater like the one below. Have you ever wondered about the financial experiences of these vehicle owners who are stalled or towed? This week I published a new paper in Risk Management & Insurance Review titled “Vehicle flood damage and household disaster assistance in the United States” that explores these experiences in greater depth.

The paper analyzes newly-available data on disaster assistance applications submitted to the Federal Emergency Management Agency (FEMA) and awards disbursed in connection with reported vehicle flood damages in the wake of presidentially-declared disasters. The research finds between 2007-2022, FEMA awarded more than $160 million to vehicle owners for uninsured vehicle flood damages. Low-income and renter households are disproportionately represented among applicants and awardees, highlighting affordability constraints and financial vulnerabilities among many US households. The paper also demonstrates vehicles are widely-owned across the income distribution, and on average they represent a relatively large share of low-income households’ net worths. Analysis of factors leading to award approval suggest FEMA’s Individuals and Households Program (IHP) generally serves the intended program objective of helping survivors meet basic needs following flood disasters. However, disaster assistance is not designed to be and is not a substitute for insurance.

Additionally, findings raise questions about behavioral factors that may influence motorists’ vehicle flood damage experiences, as risk-averse and risk-seeking drivers may exercises their vehicles’ mobility in different ways. You can read the paper here if you’re interested, and please feel free to reach out if you have any feedback or constructive criticism. Stay tuned for more research in the pipeline on this topic!