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The economics of flood insurance
The economics of flood insurance

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4 Options for reducing building on flood plains

Because of market failures, the flood-plain housing market does not operate perfectly and so is not able to provide the socially optimum number of homes on flood plains. In order to address this inefficiency, some kind of intervention could be justified. There are several options for this kind of intervention, some of which might be government-led and others market-led. This section considers a range of options that could have been used to intervene in the UK market.