A Proposed Design for Community Flood Insurance


Many areas in the United States are vulnerable to floods, but the purchase of flood insurance remains low. Community flood insurance could help bolster community resilience and increase coverage for floodplain residents.

Key Findings

  • People who buy insurance are better able to recover after a flood event because claims payments can be larger and timelier than relying on federal disaster aid, but many people at risk do not buy flood insurance.
  • Community flood insurance is a single policy, purchased by a local governmental or quasi-governmental body, which provides coverage to a large group of properties.
  • Community insurance can draw on principles of parametric insurance to reduce costs—savings which can be passed on to the community.
  • The proposed community policy design makes it attractive for both communities and insurers. However, moving from concept to implementation will require engagement by both groups to increase understanding of the concept and make refinements as needed.