SCC-CIVIC-FA Track B: Inclusive Insurance: Improving the Post-Flood Financial Resiliency of Low- and Moderate-Income Households

Flooding is the costliest natural disaster and climate change is projected to escalate flood risk in many places. Prior research has found that low- and moderate-income (LMI) households suffer disproportionately and recover less quickly than more privileged residents. Financial resilience—the ability to recover from an economic shock—underpins other aspects of recovery and is a necessary condition for broader disaster resilience. Despite this, it is an under-researched aspect of climate adaptation and investigation of actionable solutions is scarce. The proposed project will fill this gap. The project’s overarching goal is to increase the financial resilience of LMI households in New York City to escalating flood risk through the use of inclusive insurance. Inclusive insurance refers to any program that makes coverage available to those previously locked out of the insurance market. Our project will establish NYC as one of the first communities in the U.S. to harness these approaches. This project is a joint effort between the Wharton Risk Center at the University of Pennsylvania, the New York City Mayor’s Office of Resiliency, and the Center for New York City Neighborhoods (CNYCN). It also involves a research partnership with the Urban Institute, research and development work with Global Parametrics, technical assistance from Guy Carpenter, and support from the NYC Office of Management and Budget. The project has four interrelated objectives: 1. Developing and deploying innovative, inclusive insurance pilots. The key pilot will be the purchase, by CNYCN, of a parametric flood insurance policy designed to rapidly provide emergency cash grants to LMI households post-flood. In addition, R&D will be undertaken on parametric flood policies that community development finance institutions can provide to protect LMI borrowers. 2. Creating a community of practice that harnesses risk transfer for social recovery goals. This community will be developed through a workshop and new information sharing platforms. 3. Increasing the literacy and capacity of all partners. This includes training housing advisors on flood risk and insurance, providing pre-disaster consultations to fifty NYC households on risk reduction and insurance, and expanding the information available on FloodHelpNY.org, the local flood risk awareness platform. 4. Linking research to actionable change. Three research projects will be undertaken, including a survey to quantify the length of delays in various sources of disaster recovery and the costs from these delays; a replicability and generalizability analysis of the project’s pilots; and a typology of the community-level benefits of widespread insurance purchase The CIVIC Innovation Challenge is a joint program with Department of Energy Vehicle Technology Office, Department of Homeland Security Science and Technology Directorate, Federal Emergency Management Agency, and the NSF This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.