Floods and homeowners’ financial resilience: Survey-based evidence from the Netherlands

We study homeowners’ financial resilience in the face of flood risk. Us- ing three subsequent surveys among Dutch households, we compare owners of at-risk properties to a control sample of owners living out- side a potential flood zone. While the former start exhibiting greater awareness of flood risk, this awareness is not specifically reflected in financial resilience. First, we find no significant differences in terms of net financial wealth or savings. Second, the mortgages that finance the properties have comparable loan-to-value ratios, both at origina- tion and over time. The findings on resilience may reflect a high degree of trust in flood protection. The absence of insurance coverage com- bined with expected ex post government support may also be a factor.

Keywords: homeownership; insurance protection gaps; protection mo- tivation theory; financial resilience
JEL codes Q54; Q56; D14

Working paper no. 845