Coastal Proximity Influences Support for Property Insurance Subsidies for Natural Disasters � Findings From a New IRC Study

November 1, 2006 MALVERN, Pa.�A new report by the Insurance Research Council (IRC) shows that where people live in relation to the eastern and southern U.S. coasts influences their opinions on a range of issues related to natural disaster preparedness, mitigation, and insurance. The report, Public Attitude Monitor 2006, Issue 2, Influence of Coastal Proximity on Natural Disaster Preparedness and Planning, analyzes public opinion on issues related to natural disasters from the perspective of geographic residence, specifically where a respondent lives in relation to the coastline of the Atlantic Ocean and Gulf of Mexico.

The study shows that although the public in all regions supports mitigation strategies, support is strongest among those living in coastal counties. More than eight in ten respondents overall favored government action to preserve and rebuild wetlands in coastal areas. Among those living in a coastal county, 56 percent strongly favored such action, compared to 45 percent from interior counties of coastal states and 38 percent in noncoastal states. Ninety-six percent of respondents from coastal counties favored building codes for new homes, compared to 93 percent of those living in interior counties of coastal states and 88 percent of those from noncoastal states. Even when building codes would add 6 percent to the cost of a new home, 76 percent in coastal counties continued to favor them, compared to 71 percent in interior counties and 62 percent in noncoastal states.

Geographic residence also influences opinions about the fairness of policyholder and taxpayer subsidies. On the issue of policyholder subsidies for wind damage coverage in coastal areas, half of those from coastal counties believed such subsidies are unfair, compared to 63 percent from interior counties and noncoastal states. When asked about taxpayer-subsidized insurance for natural disasters, such as the National Flood Insurance Program, 51 percent of those in coastal counties found these to be unfair, compared to 59 percent from interior counties and 61 percent from noncoastal states.

The study indicates that preparedness for future natural disasters also varies by proximity to the coast. Compared to residents of interior counties and noncoastal states, residents of coastal counties were more likely to expect a 2006 relief response to be more effective than in 2005, more confident that emergency personnel in their community have adequate resources to deal with a natural disaster, and more likely to have a disaster-preparedness kit that contained enough food, water, and essential supplies to last at least three days.

�The 2004 and 2005 hurricane seasons left in their wake some major questions about property insurance for damage caused by natural disasters,� explained Elizabeth A. Sprinkel, senior vice president of the IRC. �This analysis shows that the public�s attitude towards many proposed changes will vary with proximity to the coastal areas that are most at risk.�

The report is based on a survey conducted by Harris Interactive, global market research and consulting company. The survey consisted of self-administered online questionnaires completed by more than 1,400 members of the Harris Interactive multimillion online consumer survey panel. Results were weighted to adequately reflect the opinions of the total adult population of the United States. The online surveys were completed during a two-week period in late July and early August 2006. The analysis compares residents of 144 coastal counties in 18 coastal states with residents of interior counties in those same states and with residents of the 32 noncoastal states.

For more detailed information on the study�s methodology and findings, please visit IRC�s Web site at

About IRC

The Insurance Research Council is a division of the American Institute for CPCU and the Insurance Institute of America. The Institutes are independent, not-for-profit organizations dedicated to providing educational programs, professional certification, and research for the property-casualty insurance business. The IRC provides timely and reliable research to all parties involved in public policy issues affecting insurance companies and their customers. The IRC does not lobby or advocate legislative positions. It is supported by leading property-casualty organizations.