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Community based insurance plan by zip code

 Community Resilience Cooperative Insurance Model: A Case Study of ZIP Code 32738 (Deltona, FL)

 Abstract

This paper proposes a cooperative insurance and maintenance model designed to reduce risk, stabilize premiums, and strengthen community resilience. Drawing on FEMA resilience frameworks, insurance risk reduction research, and cooperative finance models, the study presents a pilot implementation in ZIP code 32738 (Deltona, FL). With over 17,500 housing units, the initiative demonstrates how pooled contributions, preventive upgrades, and portable roll-forming technology can transform insurance from a reactive cost into a proactive resilience system. A key design choice is to allow homeowners to retain their insurance savings, strengthening participation incentives while the cooperative manages pooled contributions for upgrades and reserves.

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 Introduction

Insurance markets in Florida face mounting strain due to rising premiums, reduced availability, and escalating disaster risk (Kunreuther & Michel-Kerjan, 2011). Communities are caught in a cycle of vulnerability: deferred maintenance increases exposure, disasters trigger costly claims, and insurers respond with higher rates or withdrawal. This paper outlines a **Community Resilience Cooperative Insurance Model** that addresses these challenges by pooling resources, financing preventive upgrades, and leveraging cooperative governance. The model is illustrated through a full ZIP code implementation in Deltona, FL (32738).

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 Literature Review

- **FEMA Resilience Programs:** FEMA’s Hazard Mitigation Grant Program and BRIC initiative show that every $1 invested in mitigation saves $6 in future disaster costs (FEMA, 2018). 

- **Insurance Risk Reduction:** Research confirms that pre-event mitigation lowers claims and stabilizes premiums (Kunreuther & Pauly, 2006; McKinsey & Company, 2020). 

- **Cooperative Finance Models:** Cooperative structures align incentives, distribute risk, and reinvest surpluses for member benefit (NCBA, 2019). 

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 Case Study: ZIP Code 32738 (Deltona, FL)

**Neighborhood Profile** 

- 17,586 housing units; ≈14,600 owner-occupied. 

- Median home value: $304,000–$316,000. 

- Total property value: ≈$4.4–$4.6 billion. 

- Current insurance spend: ≈$36M annually. 

**Fund Structure** 

- Contribution: $75/month per home. 

- Annual inflow at 25% enrollment (3,650 homes): $9.85M. 

- Allocation: 50% reserves, 30% hard assets, 20% operations. 

- Q1 reserves available for upgrades: $410,625. 

**Upgrade Investment Plan** 

- Average per-home upgrade cost (24 ga Galvalume PVDF standing seam roof, Florida geometry mix): ≈$16,600. 

- Q1 upgrade capacity: ≈25 roofs. 

- Annual upgrade capacity (Year 1, 25% enrollment): ≈100 roofs. 

- 10-year upgrade capacity (without reinvested insurance savings): ≈3,000 homes. 

**Insurance Savings Impact** 

- Wind mitigation credits reduce premiums by 20–40%. 

- Savings per home: $500–$1,000 annually. 

- ZIP-wide savings at 25% enrollment: $1.8M–$3.65M annually. 

- In this model, homeowners **retain these savings**, strengthening participation incentives. 

**Machine Deployment** 

- Portable roll-former (Stangroup SS4E-15): $22,000 (machine + trailer/decoiler). 

- Throughput: ≈100–120 roofs annually per machine. 

- Break-even: 15 roofs (conservative), 5–8 roofs (if capturing full install margin). 

- Capital efficiency: Each machine unlocks ≈$1.6M in annual upgrade value. 

**Governance & Legal Structure** 

- Cooperative model with member voting rights. 

- FHS Maintenance as operational backbone (inspections, lawn care, handyman repairs). 

- Reinsurance backstop ensures catastrophic coverage remains with traditional insurers. 

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 Discussion

The Deltona pilot demonstrates how a cooperative fund can: 

- **Lower premiums** by systematically reducing risk. 

- **Build financial strength** through reserves and hard-asset collateral. 

- **Deliver tangible value** via integrated maintenance services. 

- **Scale nationally** by replicating the model across ZIP codes. 

Allowing homeowners to retain insurance savings changes the financial trajectory: the cooperative grows more slowly, but participation incentives are stronger. Members see immediate, personal benefit, which increases enrollment and trust. Over time, higher participation offsets slower reinvestment, creating a sustainable balance between individual and collective gain.

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 Conclusion

The ZIP 32738 Resilience Cooperative represents a $200M+ opportunity to transform insurance into a proactive, community-driven system. By combining pooled contributions, portable roll-forming technology, and preventive maintenance, the model creates a sustainable framework that lowers risk, reduces premiums, and strengthens communities. Allowing homeowners to keep their insurance savings enhances participation, ensuring the cooperative is both financially viable and socially compelling. This case study illustrates how theory can be translated into practice, offering a blueprint for resilience nationwide.

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 References

- Federal Emergency Management Agency. (2018). *Natural hazard mitigation saves: 2018 interim report*. National Institute of Building Sciences. 

- Federal Emergency Management Agency. (2021). *Building resilient infrastructure and communities (BRIC) program*. U.S. Department of Homeland Security. 

- Kunreuther, H., & Michel-Kerjan, E. (2011). *At war with the weather: Managing large-scale risks in a new era of catastrophes*. MIT Press. 

- Kunreuther, H., & Pauly, M. (2006). Rules rather than discretion: Lessons from Hurricane Katrina. *Journal of Risk and Uncertainty, 33*(1–2), 101–116. 

- McKinsey & Company. (2020). *Climate risk and response: Physical hazards and socioeconomic impacts*. McKinsey Global Institute. 

- National Cooperative Business Association. (2019). *Cooperative business principles and impact*. NCBA CLUSA.