On the corner of 183rd Street and 90th Avenue in Hollis, Queens, stands a yellow, diamond-shaped street sign with black letters: ROAD MAY FLOOD.
It was installed after the remnants of Hurricane Ida dumped about 9 inches of rain on New York City on September 1, 2021, setting a record for hourly rainfall and causing severe flooding. More than a dozen people died in the city that night, most in basement apartments, including on this block where 72-year-old George Lee lived most of his life.
“Everything from my house and the house across the street was flooded,” Lee said. “It was like a nightmare.”
Lee’s parents purchased the house in the mid-1960s. The block has long been prone to flooding — it sits at the bottom of a hill — but in the past, he said, “it hasn’t been that bad. I’d have water in my basement, maybe up to my ankle, and that’s it. But when we had Hurricane Ida, forget about it.”
It rained so hard that night that Lee’s basement was flooded up to the first floor. The water was moving so fast that it knocked over and swept away huge, heavy planters full of soil and flowers in his front yard. The same applies to heavy construction machinery on the road. Everything in his basement was destroyed, including thousands of dollars’ worth of computer equipment and irreplaceable memorabilia.
“I had very valuable things in my basement,” Lee said. “I had a whole comic collection that was gone. I had a whole record collection that was gone.”
Rain from Hurricane Ida damaged over 33,000 buildings in New York, most of them residential, according to the city. In the weeks following the storm, many residents who suffered flood damage learned that their insurance didn’t cover much or anything.
“People didn’t know where to turn,” said Theodora Makris, senior program manager at the nonprofit Center for New York City Neighborhoods. “Was it a federal disaster declaration? Are there federal funds? Where can we apply?”
People were able to apply for federal funds — grants from the Federal Emergency Management Agency and loans from the Small Business Administration — but for many the process was confusing and stressful, Makris said.
“And when they ended up getting money, it didn’t really cover the things they were hoping for,” Makris said.
The delivery also took a long time to arrive, which often happens after disasters.
“It can definitely take weeks and sometimes months and months to get your insurance payout, get a FEMA check and get access to credit,” said Carolyn Kousky, assistant vice president for economics and policy at the Environmental Defense Fund.
This is particularly challenging for low- to middle-income people, who tend to be disproportionately affected by climate disasters and find it more difficult to recover. As Kousky looked at this over and over again, he began to think, “How can we quickly and flexibly provide money to these households in need after a major flood?”
The Center for NYC Neighborhoods is testing an idea as a possible answer to this question: a type of community-based flood insurance. Working with the city and several other nonprofits and private companies, the Center for NYC Neighborhoods has purchased parametric flood insurance on behalf of low- to moderate-income city residents living in high-flood risk neighborhoods.
Parametric insurance differs from traditional home or flood insurance in that it pays out when there is a qualifying storm that meets certain predetermined parameters.
“So if you assume that the wind speed within that many miles of your home exceeds a certain threshold, you automatically get a set payout,” Kousky said.
Or in this case, if certain New York City neighborhoods received a certain amount of rain, the Center for NYC Neighborhoods would receive a lump sum insurance payout that it could then use to provide emergency grants of $5,000 to $15,000 to a limited number of people. Dollars to grant number of people affected by the flood.
“The beauty of parametrics is that it’s very fast,” Kousky said. “Because there is no loss control.”
You don’t have to wait for someone from the insurance company to assess the damage and decide how much it will cover. The payout will be automatic if the storm is strong enough.
This is the second year of the Flood Recovery Fund pilot in New York. In 2023, the Center for NYC Neighborhoods was able to pay the insurance premium with a grant from the National Science Foundation. This year it received a grant from tech insurance startup Raincoat.
Raincoat co-founder and CEO Jonathan Gonzalez called the program “just great from a creative perspective” and “very, very innovative” because of its focus on stormwater flooding, its public-private partnership and its community-based model.
“I think the model is the right way to go,” he said. “That’s why I was so excited to support the program, because I think it’s the future of a real solution.”
Parametric insurance is still relatively uncommon in the United States; It is more common in other parts of the world. New York has not had a qualifying storm since the pilot program began, so no one knows exactly how or how well the Flood Recovery Fund will work in practice.
But Makris said it is designed so that people who receive these grants can use them for whatever they need after a flood — to replace food or clothing, clean up their apartment, temporarily stay in a hotel, a car to rent – without restrictions.
“I think what’s really important about this is that no one knows the needs of a family or an individual better than themselves,” she said. “Especially in the moments after a disaster when things are really crazy and chaotic and you need a little more flexibility.”
In the days immediately after Hurricane Ida flooded his home in Queens, George Lee needed help pumping out and cleaning out his basement.
“I had to hire three people to put everything in the garbage truck,” he said, adding that it still took a few days to put everything away. “I had so much stuff.”
And after the cleanup, there was so much to repair and replace – windows, the boiler, computers. Even now, three years later, Lee said some of his basement walls still have cracks from water.
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