Open AccessProperty loss compensation mechanism of flood risk in China
Author(s) -
Ge Y.,
Li X.,
Li B.,
Xing H.
Publication year - 2017
Publication title -
journal of flood risk management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.049
H-Index - 36
ISSN - 1753-318X
DOI - 10.1111/jfr3.12160
Subject(s) - flood myth , compensation (psychology) , china , mechanism (biology) , property (philosophy) , flood risk management , environmental science , geography , psychology , archaeology , social psychology , philosophy , epistemology
Natural disasters cause disastrous losses of life and property in China. The most serious losses come from floods which represent more than 1% of the notional gross domestic product. Currently, there is no effective compensation mechanism to counteract the impact of floods. The existing mechanism mainly relies on guidance from the national government with cooperation from local governments. The value of compensation from government is less than 10% of the value of lost property. Worldwide, the two main mechanisms to compensate for losses caused by flood are government allocations and commercial markets, and insurance is the most popular commercial instrument to deal with flood losses. In this paper, we explore whether China could adopt a commercial approach to compensation. Three provinces are used as an example to demonstrate that China could rely on commercial mechanisms to compensate for flood losses.