Track: Financial Engineering

Abstract

One of the efforts to alleviate the risk of loss of building damage due to flooding of the Citarum River is by buying insurance. But not all people in the Citarum watershed are able to buy flood insurance. In this paper aims at identifying, mapping of flood-prone areas and flood mitigation. It is assumed that there are eight variables that affect the ability to purchase flood insurance, including: income level, education level, respondent's age, number of family members, perception of damage impact, distance of house to river, elaboration of buildings by road, and experience of flood frequency. Measurement analysis is done using the Contingent Valuation Method approach, and uses multiple linear regression models. Based on the results of the analysis shows that the variables of income, age, level of education, and number of family members significantly influence the ability to buy flood insurance. This is expected to be a consideration for insurance companies, to determine flood insurance premium rates in the Citarum River basin, to be affordable by many people.