Author(s):
Ingrid E. Luffman, M.Sc.* - East Tennessee State University
Abstract:
The National Flood Insurance Program (NFIP) provides federally-backed insurance for properties in special flood hazard areas, yet many property owners do not enroll in the program. I compared flood losses and flood insurance enrollment for three communities in Tennessee, Chattanooga, Elizabethton and Pigeon Forge, to investigate the relationship between flooding in a community and participation by that community in the NFIP. By normalizing the flood claims, dollar losses and enrollment by population and by households, I removed the effect of population growth on enrollment. Next, I calculated the cross-correlation between the normalized number of paid claims and the change in enrollment, and the cross-correlation between the normalized dollar losses and the change in enrollment. Cross-correlation describes the statistical correlation between two variables as a function of lag (in years for this study), thus the relationship between flood losses in one year and NFIP enrollment in any subsequent year can be investigated. The correlation between flood losses and NFIP enrollment was generally highest in the year in which flood losses occurred, and decreased in all but one case for a lag greater than zero. The strength of the correlation at lag zero ranged from 0.25 to 0.7 for the three communities. The community with the largest population (Chattanooga) had the strongest cross-correlation, whereas the community with the smallest population (Pigeon Forge) had the weakest cross-correlation.
