California City Part of Community-Based Flood Insurance Initiative

The City of Isleton will take part in a community-based flood insurance initiative for as part of a two-year $200,000 grant to provide payouts to residents if floodwaters reach a pre-determined depth.

The pilot project is headed by the California Department of Insurance, funded by the California Department of Water Resources and implemented by the City of Isleton’s Delta Geologic Hazard Abatement District.

California Insurance Commissioner Ricardo Lara announced the grant this week. Isleton, a small city in the Sacramento-San Joaquin Delta, is prone to flooding and lies within a 100-year floodplain.

“We have seen the devastation that climate-induced flooding can have in California in such places like Pajaro, Tulare Lake, and most recently in San Diego County,” Lara stated. “We need to help our communities be more resilient to climate change and protect them from the devastating effects of flooding. Insurance is a key driver of financial resilience, and we need to think creatively about how new insurance pilots like this Delta community project can be tested and scaled to help our most vulnerable communities.”

DWR administers portions of the National Flood Insurance Program on behalf of the Federal Emergency Management Agency, which enables property owners in participating communities to purchase insurance as protection against flood losses in exchange for state and community floodplain management regulations that reduce future flood damages.

DWR has dedicated $100,000 in this year’s budget and plans to deliver another $100,000 next year for the pilot program. The Delta GHAD is the first special district in the state to design a community-based flood parametric insurance product.

This community-based insurance product would be separate from and augment existing insurance coverage that Isleton residents may have through the NFIP. The initiative is intended to provide a small but meaningful insurance payout residents could use flexibly to survive the aftermath of a major flood. It could be used to address structural damage to property, or it could cover costs associated with evacuation such as lodging, food, and transportation, or even business or job interruption, according to the CDI.