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Aerial view of sacramento river

With Flood Risk Rising, Can Community-Based Insurance Fill A Gap?

With Flood Risk Rising, Can Community-Based Insurance Fill a Gap?

Isleton, California, Pioneers Program for Flood Recovery and Climate Resilience

Flood insurance is a safety net people hope never to need. But the net is full of holes, and hope is unreliable. When payments do come, they鈥檙e often too little and too late, especially for renters and lower-income communities.

Residents of the Sacramento River community of Isleton, California, are no strangers to flooding. The town has flooded five times since its founding in 1874. Now, Isleton is working with researchers at the University of California, Davis, to pioneer a new strategy: community-based flood insurance. It鈥檚 designed to provide fast, flexible dollars immediately after a flood while investing in the area鈥檚 flood and financial resilience.

Only one other, drastically different, place has tried it: New York City, with 10,000 times as many residents as Isleton鈥檚 850. Other communities, from Pajaro, California, to New Orleans and Washington, D.C., have also expressed interest.

鈥淚'm optimistic that this could be a catalyst throughout the United States,鈥 said Kathleen Schaefer, who initiated the Isleton program as a 嘿嘿视频 Ph.D. candidate of civil and environmental engineering. 鈥淚sleton is one of the first. But if we鈥檙e successful, it certainly will not be the last.鈥

The idea comes at a time when flood and climate risk is rising across the nation. Last year had the highest number of billion-dollar weather disasters in U.S . in California highlighted an uncomfortable truth: While millions of households in the state are at risk of flooding, fewer than 2% of Californians have flood insurance.

Climate change, wildfires, atmospheric rivers, sea level rise and aging levees are prompting some in the insurance industry to wonder out loud if we鈥檙e headed toward an uninsurable future.

鈥榊ou have to leave鈥

When 9-year-old Pam Bulahan woke up on the morning of June 21, 1972, she was looking forward to a day of swimming lessons in nearby Rio Vista. But the Sacramento River, held back from her town of Isleton by a 30-foot levee wall, had other plans.

A neighbor鈥檚 voice followed a sharp knock on the door: 鈥淗ey, the levee broke at Spindrift last night. You have to leave!鈥

Bulahan, now mayor of Isleton, remembers her mom, a cannery worker and former teacher with a knack for keeping calm in a crisis, throwing drawers of clothes on the bed. The family grabbed a few things and piled into their car. They drove to a staging area overlooking the river and waited to see what would happen next.

Woman stands by waterway and bridge
Mayor Pam Bulahan overlooks the Sacramento River in Isleton, California. (Alysha Beck/嘿嘿视频)

鈥淚鈥檓 in the car alone,鈥 Bulahan remembered. 鈥淢y mom, dad and younger brother are walking around. And I鈥檓 just watching this water creep across the land. I鈥檓 like, 鈥楾his is not good. Those houses are gone.鈥欌赌

They soon got word that a dike erected to hold back the floodwaters didn鈥檛 hold. They had 15 minutes to get home, retrieve their things and get out. They evacuated, along with about 2,000 of their neighbors. They didn鈥檛 move back until two years later.

The first days, weeks and months after the flood were spent with nearby family members 鈥 an uncle鈥檚 duplex in Thornton, a coworker鈥檚 home in Tyler Island. Bulahan鈥檚 parents didn鈥檛 have flood insurance, but they secured a small-business loan to help repair and elevate their house, which had been inundated with 5 feet of water.

鈥淲e were lucky we had several folks helping us,鈥 she said.

Historical photo: Residents remove furniture from flooded home in Isleton, California in 1972
Residents remove furniture from a home in Isleton, California, after a levee was breached on June 21, 1972. (California Department of Water Resources)
Historical image of emergency workers wading in water in Isleton following 1972 flood
Emergency workers survey flood conditions in Isleton after the levee breach in 1972. (California Department of Water Resources)

The economic impact of flood insurance gaps

Bulahan鈥檚 family was lucky, relative to some. They had a support system: family to stay with, friends to help, and financial assistance to access. But for many people with low to moderate incomes, the first days and weeks after a catastrophic flood leave people struggling to keep their heads above water in more ways than one.

Natural hazards are unnervingly adept at exposing social and economic disparities. Lower-income households are often the first to flood and the least likely to have flood insurance. Even those who have it often can鈥檛 access it quickly enough.

For example, a following the January 2023 flood of Planada, California, found that 83% of residents experienced economic losses. Many fell behind on rent, mortgage and car payments, and missed days of work. Planada is home to a large number of noncitizens, and 64% of the people whose property was damaged by floodwaters were not even eligible for federal disaster aid.

鈥淢ost people weren鈥檛 seeing money from aid, insurance or loans for weeks and even months after a disaster.鈥 鈥 Carolyn Kousky, Environmental Defense Fund

鈥淓vacuation costs, the home and its contents, the car, mucking out debris, renting generators 鈥 those expenses start right away,鈥 said Carolyn Kousky of the Environmental Defense Fund. Partnering with the nonprofit Center for NYC Neighborhoods, she helped launch the nation鈥檚 first community-based flood insurance program 鈥 or 鈥 in 2023.

鈥淢ost people weren鈥檛 seeing money from aid, insurance or loans for weeks and even months after a disaster,鈥 Kousky said. 鈥淭he more affluent run up their credit cards, get loans, and it鈥檚 not as big of a deal. But for low-income people, it鈥檚 a very big deal.鈥

aerial view of Isleton, California
Isleton, California in 2024. (Alysha Beck/嘿嘿视频)
historical black and white photo of 1972 Isleton California flood
Homes and trailers in Isleton following the levee breach of June 21, 1972. (Paul Weber/California Department of Water Resources)

Immediate needs

Settled by Chinese and Japanese immigrants in the late 1800s, Isleton has lovely river views, friendly people, quiet streets, colorful architecture and delicious pizza, beer and coffee.

Just a few feet above sea level, it鈥檚 also among Sacramento County鈥檚 poorest communities and one of its most flood-prone. Considered 鈥渄isadvantaged鈥 by the state, Isleton鈥檚 poverty rate is around 32% with a median household income of about $52,000, compared to $84,000 countywide.

 Isleton is one of the first. But if we鈥檙e successful, it certainly will not be the last.鈥 鈥 Kathleen Schaefer, 嘿嘿视频

Straddling the Sacramento River in the fertile Delta, the whole town is in a flood zone, yet just over half of residents carry flood insurance. Those who have it, pay about 30% more than their neighbors in West Sacramento or Natomas. That鈥檚 largely because Isleton lacks the resources and personnel to participate in Federal Emergency Management Agency鈥檚 Community Rating System or to fund the levee improvements that would lower premiums.

In a town with no police department, no outdoor warning siren and a problematic wastewater treatment plant, pre-disaster recovery planning can take a back burner to more immediate needs, despite the river at their backs.

鈥淚f that levee fails, portions of the town would be inundated by about 8 feet of water,鈥 said Schaefer.

Proactive flood risk management

Whenever Schaefer walks into an establishment in Isleton, she does a quick mental survey of how high she expects the water to rise in the place if the levee fails. Sitting over a plate of pizza steaming with artichoke hearts and cheese at Manny鈥檚 Barzerria, she holds her hand just over the tabletop and wagers about 5 feet.

Schaefer saw communities fall through the cracks time and again during the eight years she spent as an engineer with FEMA, which oversees the National Flood Insurance Program. At a time when some might consider retirement, she decided to go back to school at 嘿嘿视频 to investigate ways to help flood-prone communities manage and buy down their flood risk.

鈥淓veryone talks about the fact that there are two kinds of levees, those that have failed and those that will fail,鈥 she said. 鈥淪o why are we not having a conversation about how to rebuild your community after the flood happens?鈥

Woman stands in front of Isleton City Hall
After a career as a FEMA engineer, 嘿嘿视频 Ph.D. student Kathleen Schaefer returned to school to try to create a more equitable flood insurance strategy for cities like Isleton. She's helping the community launch the state's first community-based flood insurance program. (Alysha Beck/嘿嘿视频)

In welcome news, FEMA recently its flood insurance program to bring disaster aid more quickly to affected communities, yet governance gaps remain throughout the system.

鈥淭here鈥檚 no entity whose job it is to say 鈥 before a disaster happens 鈥 鈥榃e鈥檙e going to plan for the recovery of Isleton,鈥欌 Schaefer said.

Except now, with her help, there is someone.

After six years spent researching alternatives to FEMA鈥檚 National Flood Insurance Program, Schaefer secured a grant from the California Office of Emergency Services to fund a full-time resilience and recovery coordinator for Isleton for two years. The position, which is in the process of being filled, is dedicated to helping Isleton better manage its flood risk and implement a community-based flood insurance program.

鈥淵our community connections make a difference,鈥 Schaefer said.

What is community flood insurance?

Community-based flood insurance: It鈥檚 not a technological solution. You can鈥檛 build it with your hands or plant it in the ground. It鈥檚 not sexy in the least. It鈥檚 administrative. It鈥檚 paperwork and community meetings. It鈥檚 insurance. It鈥檚 people. And it could be the difference between circling the drain or staying afloat.

Community-based flood insurance: It鈥檚 not a technological solution. You can鈥檛 build it with your hands or plant it in the ground. It鈥檚 not sexy in the least. It鈥檚 administrative. It鈥檚 paperwork and community meetings. It鈥檚 insurance. It鈥檚 people.

Community-based flood insurance is a single policy, purchased by a local governmental or community intermediary 鈥 like a nonprofit, homeowners association or community group 鈥 to cover a group of designated properties. When a major flood occurs, it would trigger a predefined payment, such as $10,000, to cover immediate expenses. That alone could help make recovery for residents more equitable.

The program would also work to secure more affordable comprehensive flood insurance for residents. These efforts could simplify the process of setting premiums, which reduces administrative and claim-setting costs, and increase the number of insured households. The savings could be shared with property owners or used to fund flood-risk reduction projects in the community.

鈥淚t gives the community ownership of their flood risk and, importantly, the assets that come with it,鈥 wrote Schaefer in a .

finger points to areas of map hanging on wall
Kathleen Schaefer points out boundaries and flood zones on a map of Isleton. (Alysha Beck/嘿嘿视频)
Kathleen Schaefer looks at map of Isleton on the wall
Kathleen Schaefer, a flood expert and 嘿嘿视频 Ph.D. student inside Isleton鈥檚 City Hall. (Alysha Beck/嘿嘿视频)

Between 1994 and 2015, Californians paid $3 billion more into the NFIP than they had received in claims payments, according to Professor Nicholas Pinter, Schaefer and the Natural Hazards Research and Mitigation Group at 嘿嘿视频. Those were 鈥funds that could have been invested in risk-reduction, floodplain management, and reduced premiums,鈥 . The group suggested the state explore a state flood insurance program, which shaped the concept of community-based flood insurance.

When, in 2021, Schaefer was looking for communities to pilot such a project, City Manager Chuck Bergson volunteered Isleton.

The city council authorized the creation of the Delta Region Geologic Hazard Abatement District, or GHAD, to serve as formal intermediary for a community-based insurance program. Its members include Mayor Bulahan, city councilmembers Iva Walton and David Kent, and community leader Jean Yokotobi.

David Kent seated in black jacket, Kathleen Schaefer standing in blue coat with arms crossed and Iva Walton seated in green coat meet around a table.
Members of the Geologic Hazard Abatement District in Isleton convene for a meeting. From left, David Kent, Kathleen Schaefer and Iva Walton. The group was established to create a community-based flood insurance program. (Alysha Beck/嘿嘿视频)

鈥榃e have our backs鈥

Since transplanting here from Oakland and opening the Mei Wah Beer Room in Isleton鈥檚 historic district, Walton has been winning local affections.

For example, Schaefer mentions Walton鈥檚 name while having coffee at the local Java Jack鈥檚, and the barista speaks up from across the room: 鈥淚 don鈥檛 mean to be eavesdropping, but Iva鈥檚 amazing! She lets us hold our PTA meetings there at Mei Wah. She鈥檚 the best. She鈥檚 like, 鈥榃hatever you guys need. I鈥檓 here for the town.鈥欌赌

The building that now houses the Mei Wah Beer Room was, at various moments in history, a Chinese gambling hall, a brothel and an opium den. Now, it鈥檚 a friendly, community gathering spot that serves up craft beers and warm chatter.

Surrounded by scarlet walls and artwork celebrating Isleton鈥檚 early Chinese history, Walton and Kent sit on barstools, describing their hopes for the community-based flood insurance program.

Iva Walton in red jacket in front of a red wall and behind the bar at Mei Wah
Iva Walton, owner of Mei Wah Beer Room and a member of the Delta Region Geologic Hazard Abatement District. (Alysha Beck/嘿嘿视频)
Mei Wah bar in historic Isleton
The entrance to Mei Wah Beer Room in historic downtown Isleton. (Alysha Beck/ 嘿嘿视频)

鈥淲e鈥檙e a bit isolated out here, so it seemed like another opportunity for us to take care of ourselves in a way that we haven鈥檛 before,鈥 Walton said. 鈥淚 love that we鈥檙e so small that everybody can have an impact on this little city.鈥

Kent points behind him, toward the direction of the river.

鈥淭his river right here going past Isleton is the No. 1 freshwater supply for the rest of the state,鈥 he said. 鈥淪o we are important, and we need to be treated accordingly. We want every resident that is affected by some sort of disaster like this to be compensated.鈥

鈥淎ll of us matter,鈥 Walton added. 鈥淐ommunity really matters. We do have our backs, you know.鈥

David Kent with arms crossed looks at camera straight ahead with backdrop of downtown Isleton, California
David Kent is among the members of the Delta Region Geologic Hazard Abatement District, which is working with 嘿嘿视频 researchers to establish the state's first community-based flood insurance program. (Alysha Beck/嘿嘿视频)

Making insurance a community investment

Last year, heavy storms fell across Sacramento and the coast, and snowmelt created major flooding in the Central Valley. As atmospheric rivers become more frequent and powerful, more flooding will likely occur in places without insurance, warned Michael Petersen, deputy commissioner of climate and sustainability for the California Department of Insurance during a November 2023 webinar.  

鈥淲e鈥檙e seeing increased climate change risks and untapped potential for reducing those risks,鈥 he said. 鈥淭he first goal is to reduce greenhouse gas emissions in every sector of the economy. Second is closing protection gaps for vulnerable communities. 鈥 What can we do at a community level to make insurance more affordable?鈥

The and the have voiced support for alternatives to the NFIP that help close protection gaps for communities.

Schaefer鈥檚 project offers a solution. She referred to billionaire investor Warren Buffett鈥檚 thoughts on the concept of 鈥渇loat鈥 when he said: 鈥Insurers receive premiums upfront and pay claims later. ... This collect-now, pay-later model leaves us holding large sums 鈥 money we call 鈥榝loat鈥 鈥 that will eventually go to others. Meanwhile, we get to invest this float for Berkshire鈥檚 benefit.鈥

Kathleen Schaefer of 嘿嘿视频 talks in front of elevated houses
Kathleen Schaefer of 嘿嘿视频 describes how elevated homes, such as those behind her in this neighborhood of Isleton, can be part of a flood-risk management strategy for vulnerable communities. (Alysha Beck/嘿嘿视频)

鈥淚f it works for Berkshire Hathaway,鈥 she wondered, 鈥渃an we make it work for us with community-based flood insurance? With climate change, we鈥檙e going to have longer periods of drought. We know that. I鈥檓 advocating that we use those longer periods of drought to build up our reserves and to build up our 鈥榝loat.鈥欌赌

Community-minded

Back at the bridge, Mayor Bulahan is overlooking the river with Schaefer, recounting that scared little girl she was when the floodwaters crawled over the land all those years ago 鈥 a sight she hopes never to see again.

Two women stand by waterway and bridge
Isleton Mayor Pam Bulahan, left, and 嘿嘿视频 Ph.D. student Kathleen Schaefer are working together with community leaders to bring the state鈥檚 first community-based flood insurance to Isleton. (Alysha Beck/嘿嘿视频)

Bulahan spent her morning at her government day job in Sacramento, her afternoon tending her friend鈥檚 store in downtown Isleton, and after our interview, is off to get groceries for another friend. This is her community. She hopes their efforts to protect it pay off in safety, lower insurance premiums and peace of mind.

鈥淵ou鈥檝e got to try something,鈥 said Bulahan. 鈥淵ou won鈥檛 know until you try.鈥

鈥淏ut everyone wants someone else to be the first,鈥 added Schaefer.

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