As climate disasters rise, New York tests fast insurance payouts
A New York City pilot program is seeking to get money quickly to families affected by flooding – and avoid the cascading financial problems that can spell economic ruin long after climate disasters have struck.
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The program comes as the United States has been hit with a record number of billion-dollar disasters, including Tropical Storm Hilary, which brought flash floods to California this month.
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"Climate change impacts are requiring us to think differently about post-disaster insurance and financing," said a spokesperson for the New York Mayor's Office of Climate and Environmental Justice, which is offering advisory support for the pilot project.
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A traditional post-disaster insurance payout is based on an investigation into the extent of damage to a property – a potentially lengthy process, said Carolyn Kousky, an associate vice president with the Environmental Defense Fund, a nonprofit partnering on the New York project.
A parametric approach is different, involving preset triggers – say, a certain amount of rain in a particular place – that automatically generates a payout.
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