Inclusive Parametric Flood Insurance

New York, NY



Carolyn Kousky



The New York team implemented a parametric flood insurance policy, using data to inform a program to make emergency cash grants to low-to and moderate-income households in the wake of a disaster.


Flooding is the costliest natural disaster and the risk is escalating in many parts of the country. Prior research has found that low- and moderate-income households suffer disproportionately from disasters and recover less quickly. Financial resilience – the ability to recover from an economic shock – is foundational to all other aspects of recovery. The team’s overarching goal was to increase the financial resilience of LMI (low- to moderate-income) households in New York City to escalating flood risk through the use of an innovative insurance model.


Research Partners: 

  • Wharton Risk Center 
  • Urban Institute 
  • Global Parametrics 

Civic Partners: 

  • NYC Mayor’s Office of Resiliency 
  • Center for NYC Neighborhoods 
  • NYC Office of Management and Budget 


Establishing the pilot required a detailed assessment of both financial need and pluvial flood risk to identify pilot communities; exploration of data and technology to define a trigger for the product; and exploration of a payout structure to maximize impact. The team settled on a trigger for the parametric product related to the percent of points (defined by areas where people live) that are flooded according to a flood footprint calculated using a combination of satellite data, FloodNet sensor data, social media postings, and other available photographs or video.

The pilot featured a parametric risk transfer program where the Center for NYC Neighborhoods (CNYCN) receives a payout after a damaging flood to make emergency cash grants to LMI households in the immediate aftermath of the disaster.


  • Developed prototypes for how microenterprises and small businesses in LMI communities can be financially protected from a disaster.
  • Quantified the financial recovery gaps of households and the community-wide benefits of increased take-up of insurance.
  • Produced tools and outreach materials to improve understanding of flood risk, financial recovery, and insurance.