Effect of low-income households’ intention factors on willingness to pay for flood risk insurance in South Africa

• Examines willingness to pay for flood insurance in a low-income setting in South Africa. • Employs the Theory of Planned Behaviour in flood insurance adoption research. • Finds subjective norms and perceived behavioural control are drivers of intentions and attitudes do not have any impact. • Reveals the importance of education, gender and income in flood insurance purchase decisions. • Recommends policy levers, such as financial incentives and better communication strategies. In South Africa, low-income households are still at a big risk of flooding caused by climate change but there is a continued under-insurance. The behavioural forces that influence willingness to pay (WTP) for flood risk insurance in such communities are not well comprehended, despite their importance for strengthening climate adaptation and reducing financial vulnerability. This paper uses the Theory of Planned Behaviour (TPB) to evaluate the role of the attitude, subjective norm, and the perceived behavioural control (PBC) towards intention and actual behaviour regarding insurance matters among East London and Mdantsane-Chalumna households. Multi-stage sampling design was used to create survey data of 448 respondents in flood prone areas. Findings indicate that subjective norms and PBC have significant effects on intention, but not attitude. Intention showed a great negative correlation with behaviour, which demonstrates the intention-behaviour gap that is predetermined by the affordability, lack of trust, and administrative barriers. Subjective norms and PBC had high direct impacts on WTP, which underlines the key position of community and the perceived ability to mold protective financial behaviour. The results indicate the necessity of interventions to enhance self-efficacy and ease insurance procedures and capitalise on community networks to normalise participation. The research presents context-dependent arguments to support the discourse of climate-insurance in Africa and gives practical implications to develop inclusive and accessible flood insurance products to address the national climate adaptation strategies for low-income households.