Community-Driven and Research-Informed: Insurance Innovation to Meet Social Needs

This report shares a process of social innovation undertaken to improve the financial recovery of low- and moderate-income (LMI) households from increasing climate disasters. The problem to be solved — filling the gaps in financial recovery post-disaster for LMI households and communities — has long been identified and has also been well-diagnosed. Climate-related disasters are occurring more frequently, with more severity, and in places unaccustomed to such impacts. Our systems for financial recovery from these events, however, are failing many of our most vulnerable groups.

NYC faces coastal flooding from storms and tides, as well as inland flooding from rainfall and, to a lesser extent, riverine flooding. Extreme precipitation events, which are increasing in the region (USGCRP, 2018), can overwhelm the city’s stormwater and sewer system, leading to flooded roads, subways, and buildings. The likelihood of experiencing flooding is greater for lower-income residents (Lieberman-Cribben et al., 2021) and residents of NYC floodplains tend to be working- and middle-class homeowners (The Center for NYC Neighborhoods, 2014).

Here, we document the process that guided our policy innovation in the hopes that our approach can be used by other groups seeking new solutions to their disaster recovery challenges in the face of the growing risk of climate extremes. The report first discusses the broader issue of cross-sector collaboration and team building and then walks through the insurance-based innovation steps in detail, which include: undertaking a disaster recovery needs assessment, scanning the landscape of possible interventions, evaluating options through stakeholder engagement, refining the concept for implementation, and evaluation and learning.