Purpose

Flood damage to uninsured single-family homes shifts the entire burden of costly repairs onto the homeowner. Homeowners in the United States and in much of Europe can purchase flood insurance. The Netherlands and Asian countries generally do not offer flood insurance protection to homeowners. Uninsured households incur the entire cost of repairing/replacing properties damaged due to flooding. Homeowners’ policies do not cover damage caused by flooding. The paper examines the link between personal bankruptcy and the severity of flooding events, property prices and financial condition levels.

Design/methodology/approach

A fully modified ordinary least squares (FMOLS) regression model is developed which uses personal bankruptcy filings as its dependent variable during the years 2000 through 2018. This time-series model considers the association between personal bankruptcy court filings and costly, widespread flooding events. Independent variables were selected that potentially act as mitigating factors reducing bankruptcy filings.

Findings

The FMOLS regression results found a significant, positive association between flooding events and the total number of personal bankruptcy filings. Higher flooding costs were associated with higher bankruptcy filings. The Home Price Index is inversely related to the bankruptcy dependent variable. The R-squared results indicate that 0.65% of the movement in the dependent variable personal bankruptcy filings is explained by the severity of a flooding event and other independent variables.

Research limitations/implications

The severity of the flooding event is measured using dollar losses incurred by the National Flood Insurance program. A macro-case study was undertaken, but the research results would have been enhanced by examining local areas and demographic factors that may have made bankruptcy filing following a flooding event more or less likely.

Practical implications

The paper considers the impact of the natural disaster flooding on bankruptcy rates filings. The findings may have implications for multi-family properties as well as single-family housing. Purchasing flood insurance generally mitigates the likelihood of severe financial risk to the property owner.

Social implications

Natural flood insurance is underwritten by the federal government and/or by private insurers. The financial health of private property insurers that underwrite flooding and their ability to meet losses incurred needs to be carefully scrutinized by the insured.

Originality/value

Prior studies analyzing the linkages existing between housing prices, natural disasters and bankruptcy used descriptive data, mostly percentages, when considering this association. The study herein posits the same questions as these prior studies but used regression analysis to analyze the linkages. The methodology enables additional independent variables to be added to the analysis.

中文翻译：

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破产申请、洪水、房地产价格和领先指数

目的

没有保险的单户住宅的洪水破坏将昂贵的维修费用全部转移到房主身上。美国和欧洲大部分地区的房主可以购买洪水保险。荷兰和亚洲国家一般不向房主提供洪水保险保护。没有保险的家庭承担维修/更换因洪水而受损的财产的全部费用。房主的政策不包括洪水造成的损害。该论文研究了个人破产与洪水事件的严重性、房地产价格和财务状况水平之间的联系。

设计/方法/方法

开发了一个完全修改的普通最小二乘 (FMOLS) 回归模型，该模型使用 2000 年至 2018 年期间的个人破产申请作为其因变量。该时间序列模型考虑了个人破产法庭申请与代价高昂的广泛洪水事件之间的关联。选择了可能作为减少破产申请的缓解因素的独立变量。

发现

FMOLS 回归结果发现洪水事件与个人破产申请总数之间存在显着的正相关关系。较高的洪水成本与较高的破产申请有关。房价指数与破产因变量成反比。R平方结果表明，因变量个人破产申请中 0.65% 的变动是由洪水事件的严重性和其他自变量解释的。

研究限制/影响

洪水事件的严重程度是使用国家洪水保险计划造成的美元损失来衡量的。进行了宏观案例研究，但通过检查可能在洪水事件后或多或少可能导致破产申请的当地地区和人口因素，研究结果将得到加强。

实际影响

该文件考虑了自然灾害洪水对破产率申请的影响。这些发现可能对多户住宅和单户住宅都有影响。购买洪水保险通常可以减轻业主面临严重财务风险的可能性。

社会影响

自然洪水保险由联邦政府和/或私人保险公司承保。承保洪水的私人财产保险公司的财务状况及其应对损失的能力需要由被保险人仔细审查。

原创性/价值

先前分析房价、自然灾害和破产之间存在联系的研究在考虑这种关联时使用了描述性数据，主要是百分比。本文的研究提出了与这些先前研究相同的问题，但使用回归分析来分析联系。该方法可以将额外的自变量添加到分析中。