Nigerian Journal of Banking and Financial Issues (NJBFI)

THE INFLUENCE OF FLOOD RISK PERCEPTION ON INSURANCE UPTAKE AMONG RESIDENTS IN FLOOD-PRONE AREAS OF LAGOS STATE

Abstract

This study examined the impact of flood risk perception on flood insurance uptake among residents in flood-prone areas of Lagos State, Nigeria. Utilizing a descriptive quantitative methodology, the study analysed responses from structured questionnaire focused on demographic characteristics, perceived flood risks, and insurance behaviours. Descriptive statistics, one-sample t-test and Logit regression model were used in analysing the data. Results revealed that the residents perceived flood risk a neither high nor low given that a significant portion of residents acknowledged a high probability of flooding (40.5%), a substantial number (36.7%) underestimated the risk with no clear-cut majority. Similar trend occurs in the resident perception of the severity (37.6% perceived severity as high against 42.6% perceiving it as low) and concern (39.4% highly concerned against 40.0% low concern) for flood risks in the study area. In terms of perceived control, the majority (66.5%) of the residents perceived they either had little or no control over flood risks.  Against a priori expectation, perception of flood risks had no significant relationship (β = 0.273, OR = 1.314) with insurance uptake in the study area. The study recommends that flood insurance uptake strategies should inculcate education about dangers of flood and improve residents perceived control over flood risk through insurance uptake.