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I do not believe that insurance on its own can be seen as a tool for mitigation. However, I would argue that mitigation can be used as leverage to get communities and people to do things that will help to mitigate the effects of disasters.
With respect to disaster planning, mitigation can be defined as efforts reduce or eliminate the risks posed by natural disasters to people and their property. In other words, mitigation tools are those which make it less likely that a disaster will result in a great deal of property damage or loss of life.
From this, we can see that insurance alone does not act as a mitigation tool. If I insure my home against flooding, it does not reduce the likelihood that my home will be damaged. Instead, all it does is to spread the costs of any damages over a broader group of people. Therefore, we can say that insurance should not be seen as a mitigation tool.
However, insurance can be used as a way to prod people or communities to take steps towards mitigation. The National Flood Insurance Program (NFIP) is an example of this. In order for communities to be eligible, they must pass laws to ensure that future development will occur in areas of the towns that are less susceptible to flooding. In other words, insurance is being used to push communities to engage in mitigation.
Thus, we can say that insurance on its own is not a tool of mitigation, but that it can be used to encourage people and communities to engage in mitigation.
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