Private Insurance Adverse Selection

wilsonchan18wilsonchan18
in IBC.Flood

Hi,

From the wiki, I understand the major drawback for Private (managed by InsR) Flood Program is Adverse Selection (i.e. only those living in flood-prone area would buy but will then be unaffordable since they are not spread).

But why it only be a problem for Private not for Public? I am sure if there is a public one and voluntary, there may still be issues for unaffordable and not being spread. Am I missing something here?

Thanks and Warm Regards,
Wilson

Comments

  • Staff-T1Staff-T1

    It doesn't say in the wiki that its not an issue for public insurance no? You can be public and voluntary and suffer from similar issues - Although the government probably has more leeway in terms of running a deficit with their flood program. I believe the US system is public and voluntary

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