KDI Journal of Economic Policy

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P-ISSN 1738-656X

Vol.33, No.4

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한국개발연구. Vol. 33, No. 4, December 2011, pp. 119-142

https://doi.org/10.23895/kdijep.2011.33.4.119

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A Theoretical Study on Storm and Flood Insurance in Korea

Kwang-ho Kim

Author & Article History

Manuscript .

Abstract

The storm and flood insurance, which was introduced recently to substitute the disaster relief system to moderate government''s financial burden and enhance people''s effort to reduce damage, seems to suffer various problems. This paper conducts a theoretical analysis on various aspects of the storm and flood insurance to provide insight on those issues and draw policy implications. First, the coexistence of disaster relief with the storm and flood insurance is likely to harm the penetration of the storm and flood insurance. Second, the current premium system is likely to induce people to make less efforts to reduce damage due to moral hazard problem. Third, current support for damage-reducing efforts may not fulfill its purpose and hence should be scrutinized carefully.

Keywords

풍수해보험(Storm and Flood Insurance), 도덕적 해이(Moral Hazard), 재난지원금(Disaster Relief Fund

JEL Code

D11, D81, H59

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