Abstract: From the angle of reducing disaster， with the theory of contract design， to discuss the contractdesign of flood insurance. It is found out: when the insurer is the type of risk aversion， even in the complete information condition， the flood insurance contract cannot provide complete insurance to the insurer.When there are moral risk and monopoly pricing， the insurance degree will be further distorted. On strategic pricing， the disaster reducing efforts of the insurer are concerned with disaster rate. For reaching the non-distortion of social optimal disaster reduction， the price by insurance company should be restricted.

Key words: flood insurance, contract, encourage, strategic pricing