This paper investigates how the questions of compensation and prevention are linked, and how this can be supported or hampered by public policy. It analyzes this for flood insurance, where the EU has instigated a debate on what the role of the EU should be in the context of flood insurance and other disasters in Europe. The paper investigates if and how current EU policies interplay with the two following dimensions: (i) the question of availability and affordability, and (ii) the potential to use flood insurance as a lever for flood prevention and flood damage mitigation.
Exploring these two dimensions of flood insurance, the paper first considers affordability and availability, and risk reduction linkages in an EU context (section 2 and 3), and then gather insights from two very different cases of insurance reform efforts at national level in the Netherlands and the UK (section 4). This is followed by an analysis of how EU policy could help address the challenges at member state level (section 5). It concludes by outlining the need for further research in section 6.