Damage assessments of natural hazards supply crucial information to decision support and policy development in the fields of natural hazard management and adaptation planning to climate change. Specifically, the estimation of economic flood damage is gaining greater importance as flood risk management is becoming the dominant approach of flood control policies throughout Europe. This paper reviews the state-of-the-art and identifies research directions of economic flood damage assessment. Despite the fact that considerable research effort has been spent and progress has been made on damage data collection, data analysis and model development in recent years, there still seems to be a mismatch between the relevance of damage assessments and the quality of the available models and datasets. Often, simple approaches are used, mainly due to limitations in available data and knowledge on damage mechanisms. The results of damage assessments depend on many assumptions, e.g. the selection of spatial and temporal boundaries, and there are many pitfalls in economic evaluation, e.g. the choice between replacement costs or depreciated values. Much larger efforts are required for empirical and synthetic data collection and for providing consistent, reliable data to scientists and practitioners. A major shortcoming of damage modelling is that model validation is scarcely performed. Uncertainty analyses and thorough scrutiny of model inputs and assumptions should be mandatory for each damage model development and application, respectively. In our view, flood risk assessments are often not well balanced. Much more attention is given to the hazard assessment part, whereas damage assessment is treated as some kind of appendix within the risk analysis. Advances in flood damage assessment could trigger subsequent methodological improvements in other natural hazard areas with comparable time-space properties.

Flood disaster mitigation strategies should be based on a comprehensive assessment of the flood risk combined with a thorough investigation of the uncertainties associated with the risk assessment procedure. Within the "German Research Network of Natural Disasters" (DFNK) the working group "Flood Risk Analysis" investigated the flood process chain from precipitation, runoff generation and concentration in the catchment, flood routing in the river network, possible failure of flood protection measures, inundation to economic damage. The working group represented each of these processes by deterministic, spatially distributed models at different scales. While these models provide the necessary understanding of the flood process chain, they are not suitable for risk and uncertainty analyses due to their complex nature and high CPU-time demand. We have therefore developed a stochastic flood risk model consisting of simplified model components associated with the components of the process chain. We parameterised these model components based on the results of the complex deterministic models and used them for the risk and uncertainty analysis in a Monte Carlo framework. The Monte Carlo framework is hierarchically structured in two layers representing two different sources of uncertainty, aleatory uncertainty (due to natural and anthropogenic variability) and epistemic uncertainty (due to incomplete knowledge of the system). The model allows us to calculate probabilities of occurrence for events of different magnitudes along with the expected economic damage in a target area in the first layer of the Monte Carlo framework, i.e. to assess the economic risks, and to derive uncertainty bounds associated with these risks in the second layer. It is also possible to identify the contributions of individual sources of uncertainty to the overall uncertainty. It could be shown that the uncertainty caused by epistemic sources significantly alters the results obtained with aleatory uncertainty alone. The model was applied to reaches of the river Rhine downstream of Cologne.

Efficiently reducing natural hazard risks requires a thorough understanding of the costs of natural hazards. Current methods to assess these costs employ a variety of terminologies and approaches for different types of natural hazards and different impacted sectors. This may impede efforts to ascertain comprehensive and comparable cost figures. In order to strengthen the role of cost assessments in the development of integrated natural hazard management, a review of existing cost assessment approaches was undertaken. This review considers droughts, floods, coastal and Alpine hazards, and examines different cost types, namely direct tangible damages, losses due to business interruption, indirect damages, intangible effects, and the costs of risk mitigation. This paper provides an overview of the state-of-the-art cost assessment approaches and discusses key knowledge gaps. It shows that the application of cost assessments in practice is often incomplete and biased, as direct costs receive a relatively large amount of attention, while intangible and indirect effects are rarely considered. Furthermore, all parts of cost assessment entail considerable uncertainties due to insufficient or highly aggregated data sources, along with a lack of knowledge about the processes leading to damage and thus the appropriate models required. Recommendations are provided on how to reduce or handle these uncertainties by improving data sources and cost assessment methods. Further recommendations address how risk dynamics due to climate and socio-economic change can be better considered, how costs are distributed and risks transferred, and in what ways cost assessment can function as part of decision support.

Building houses in inundation areas is always a risk, since absolute flood protection is impossible. Where settlements already exist, flood damage must be kept as small as possible. Suitable means are precautionary measures such as elevated building configuration or flood adapted use. However, data about the effects of such measures are rare, and consequently, the efficiency of different precautionary measures is unclear. To improve the knowledge about efficient precautionary measures, approximately 1200 private households, which were affected by the 2002 flood at the river Elbe and its tributaries, were interviewed about the flood damage of their buildings and contents as well as about their precautionary measures. The affected households had little flood experience, i.e. only 15% had experienced a flood before. 59% of the households stated that they did not know, that they live in a flood prone area. Thus, people were not well prepared, e.g. just 11% had used and furnished their house in a flood adapted way and only 6% had a flood adapted building structure. Building precautionary measures are mainly effective in areas with frequent small floods. But also during the extreme flood event in 2002 building measures reduced the flood loss. From the six different building precautionary measures under study, flood adapted use and adapted interior fitting were the most effective ones. They reduced the damage ratio for buildings by 46% and 53%, respectively. The damage ratio for contents was reduced by 48% due to flood adapted use and by 53% due to flood adapted interior fitting. The 2002 flood motivated a relatively large number of people to implement private precautionary measures, but still much more could be done. Hence, to further reduce flood losses, people's motivation to invest in precaution should be improved. More information campaigns and financial incentives should be issued to encourage precautionary measures.