---
title: "what ensurance saves you: the four bills"
canonical_url: https://ensurance.app/guide/what-ensurance-saves-you
markdown_url: https://ensurance.app/guide/what-ensurance-saves-you.md
subtitle: "avoided loss, bill by bill: who pays each one, what the field has measured, and what to count only once"
category: nature-finance
---

# what ensurance saves you: the four bills

*avoided loss, bill by bill: who pays each one, what the field has measured, and what to count only once*

The forest above a reservoir can slow the runoff that carries ash and sediment toward an intake. A floodplain can give a river somewhere to spread before it reaches a road. A salt marsh can take some of the force out of a storm surge before it reaches the houses behind it. Each of these does its work whether or not anyone pays for it. When one of them fails, a bill lands on someone: a utility, a road department, a company, a carrier. **Avoided loss** is the name for the part of that bill that never arrives because the land held.

This page sorts that saving into four bills, puts one payor on each, and gives the figure the field has published for each one, with its caveat. **Ensurance** is built to fund the natural asset that lowers these bills. It is not the forest, and no saving from ensurance has been realized yet. Every dollar on this page belongs to someone else's project, named and dated.

:::johnson
**an avoided loss has an owner.** It is one payor's bill with the land gone, minus what that payor still spends with the land kept, counted once.

[The invoice test for an avoided cost →](/guide/an-avoided-cost-is-the-benefit-you-can-book?from=guide)
:::

## what avoided loss is

Avoided loss is what a payor would otherwise spend or lose if a natural asset fails, minus the loss it still expects with the asset kept. Both halves are needed. A city that protects a watershed still pays for that protection, so its saving is the plant it did not build minus the protection it does fund.

Avoided loss is a model estimate against a counterfactual. Nobody can invoice a flood that did not happen. An analyst builds two versions of the same place, one with the forest or marsh in its current condition and one without it, runs the same storms or fires through both, and reads the difference in expected loss. The method, the time period and the range belong next to the number, every time.

A bill is different: it is observed, as a cleanup ticket, a repair contract or a claim file. The test for when a missing bill can go on the books is in [an avoided cost is the benefit you can book](/guide/an-avoided-cost-is-the-benefit-you-can-book?from=guide). This page is about the size of the saving.

## the four bills, one payor each

| bill | example payor | what the land keeps from happening | the field's figure | the caveat |
|---|---|---|---|---|
| Avoided capital spend | A city water utility | A filtration plant, a new intake, a levee | New York City: the filtration plant was put at $4–6 billion to build in the city's 1996 estimate, and an updated estimate "would significantly exceed" $6 billion (Water Board, FY2026). Watershed protection is most often quoted at about $1.5 billion in total | Cumulative protection spend against a build cost; the 1996 estimate added about $300 million a year to run the plant. Not the same time basis |
| Avoided operating cost | A water agency, a road department | Treatment, dredging, debris cleanup, repeat repairs | Yuba Water Agency contracted to pay $1.5 million over five years toward a pilot financed with $4 million of lender capital | What the payor paid in, not a published avoided loss |
| Protected earnings | A company, a farm, a hotel | Lost production, missed deliveries, empty rooms | No field figure we will repeat for a single business | Count net earnings lost. Gross sales are not net loss |
| Kept insurability and cost of risk | An owner, a carrier, a lender | A policy that does not renew, a deductible or risk charge that rises | Tahoe Donner, 2025: the sponsors report a premium 39% lower and a deductible 89% lower than their estimate without the forest work | One association's placement, against the sponsors' stated counterfactual |

### avoided capital spend: the plant you do not build

New York City is the standard case. Its Catskill and Delaware supply comes off a large upstate watershed of forest, farm and small towns, and it has run unfiltered under federal waivers since 1993. In 1996 the city put the alternative at a filtration plant costing $4–6 billion to build and about $300 million a year to run. A 2007 estimate put construction at $6 billion, and the city's Water Board says an updated estimate would significantly exceed that. The protection spend is most often quoted at about $1.5 billion in total. We have not traced that figure to a primary source, so treat it as secondary, and name the source whenever you use it. The plant's own cost is the city's $4–6 billion in 1996 and the Water Board's "significantly exceed $6 billion" now.

Two cautions. The $1.5 billion is protection spent over many years. The plant figure is a construction cost, and the 1996 estimate added about $300 million a year to run it. Put both on the same basis, either present value or annual cost, before you call the gap a saving. And the saving holds only while the watershed holds: the waiver is renewed on conditions.

### avoided operating cost: the cleanup bill that land can shorten

The Yuba Forest Resilience Bond is the closest field example of a utility paying for forest work above its water. Lenders put up $4 million to thin and treat about 15,000 acres of national forest in the North Yuba watershed. Yuba Water Agency contracted to pay $1.5 million over five years, CAL FIRE paid a grant, and the lenders were repaid by those beneficiaries, not by insurers. CSAA Insurance was one of four lenders, not the payor. No avoided-loss dollar has been published for the pilot. What it shows is a utility paying in, on contract, for work on the forest above its water.

The bill when a slope lets go is easier to see. CDOT told the Denver Post in August 2022 that the 2021 Glenwood Canyon incidents on Interstate 70 had cost the state **$32 million**, money spent, not saved. On a county road, Eagle County estimated about **$190,000** to clean up after the 2012 Sweetwater Road slides, and the road closed again in August 2026.

These are bills, not avoided losses. Nobody has shown what any treatment on those slopes would have saved. They tell a road department what the line item looks like when the hill fails. The fuller ledger is in [what a mudslide costs a road](/guide/what-a-mudslide-costs-a-road?from=guide).

### protected earnings: count net, not gross

A closed highway stops deliveries. A fouled intake can stop a bottling line. These are real losses, and the easiest to overstate.

The rule is conservative. Gross sales lost are not net loss: some purchases are only delayed, some costs are saved while the line is down, and a sale lost at one shop may be made at the next one. Count the earnings the payor actually loses, net of those, and only with the payor's own records behind them. We have no field figure for a single business that we would repeat here, which is why this bill comes after the capital and operating bills in a pitch to a finance lead.

### kept insurability and cost of risk

The fourth bill is the price of carrying the risk: a homeowner's or company's policy that keeps renewing, a deductible that stays where it is, a lender's charge that does not climb. The first policy the sponsors describe as priced on forest work, the Tahoe Donner association's wildfire policy in 2025, was reported as 39% lower in premium and 89% lower in deductible than the sponsors' estimate without the forest work. It is one placement, not a filed discount or a typical result. It is also a price result, while the more common benefit, as Sarah Conway argues, is keeping cover at all.

The insurance bill has its own series, starting with [how to lower insurance premiums](/guide/how-to-lower-insurance-premiums?from=guide), and [keep the policy before you cut the price](/guide/keep-the-policy-before-you-cut-the-price?from=guide) covers non-renewal. The lender's side is in [ensurance and your cost of capital](/guide/ensurance-and-your-cost-of-capital?from=guide).

## one marsh, many payors

Bills rarely land on one payor. During Hurricane Sandy in 2012, coastal wetlands across the northeastern United States avoided an estimated **$625 million** in direct flood damage to property (Narayan and colleagues, *Scientific Reports*, 2017). In Ocean County, New Jersey, the same study found wetlands lowered annual flood losses by about 16% on average, and by up to 70% at low elevations.

That figure is modeled. The authors ran the storm through industry catastrophe models with and without the marshes, and the work was funded by the Lloyd's Tercentenary Research Foundation. It is a total across many property owners and the carriers behind them. It is not one payor's saving, so no single owner's share of it would cover the cost of keeping the marsh. Being near a marsh is also not proof that any one house was protected; the effect depends on elevation, distance and the storm. How each payor's share is set is in [split the bill for what lowers it](/guide/split-the-bill-for-what-lowers-it?from=guide).

## the conservative rule

Count only costs the payor has already scoped, budgeted or been billed for: a plant in a master plan, a cleanup line in last year's budget, a claim already paid. A hypothetical saving does not close a deal. Count each loss once, on the same time basis.

[How an intervention lowers the loss](/guide/how-an-intervention-lowers-the-loss?from=guide) walks the steps, and [the quote beside the cost of doing nothing](/guide/the-quote-beside-the-cost-of-doing-nothing?from=guide) does the dollars.

## where ensurance sits

The forest, the floodplain and the marsh do the work. Ensurance is built to fund that work and the protection of the land it depends on, with each payor's share set against its own avoided loss. It is not insurance and does not pay claims ([what ensurance cannot do](/guide/what-ensurance-cannot-do?from=guide)). It is built as a way for the people a place protects to pay for keeping it. For an investor, the same job reads as [fund the thing that shrinks the loss](/guide/fund-the-thing-that-shrinks-the-loss?from=guide).

No ensurance saving has been realized yet. The New York, Yuba, Glenwood, Tahoe Donner and Sandy figures are the field's, and they are why the approach is worth testing on a named place.

If you run a utility, start with the capital and operating bills: [see how this reads for a utility](/solutions/utilities?from=guide&topic=lower-the-loss). A company can start from [earnings and supply](/solutions/corporations?from=guide&topic=lower-the-loss), and a carrier from [loss control at the source](/solutions/insurers?from=guide&topic=lower-the-loss). Or bring us one bill you already pay: [talk to someone who can help](/contact?from=guide&topic=lower-the-loss).

## frequently asked questions

### what is avoided loss?

Avoided loss is what a payor would otherwise spend or lose if a natural asset such as a forest, floodplain or marsh fails, minus what it still spends with that asset kept. It is a model estimate against a counterfactual, so it should always come with its method and range.

### is avoided loss the same as an avoided cost?

They are close. Avoided loss is the modeled size of the saving. An avoided cost is the specific bill a payor can show did not arrive, which is what goes on the books.

### can you add the four bills together?

Only after removing overlap. An insurer's payout and the repair it covers are one loss, and gross sales lost are not net loss. Add each consequence once, on the same time basis.

### has ensurance saved anyone money yet?

No. Ensurance is built to fund the natural asset that lowers these bills, and no ensurance saving has been realized yet. The figures on this page come from other programs.

## sources

[NYC press release 431-96, 1996](https://www.nyc.gov/html/om/html/96/sp431-96.html) — The city's watershed accord announcement: filtration plant estimated at $4–6 billion to build and about $300 million a year to run.

[NYC Water Board, FY2026 upstate rate report](https://www.nyc.gov/assets/nycwaterboard/downloads/pdf/blue_book/fy2026-upstate-rate-report.pdf) — A 2007 estimate of $6 billion for a Catskill/Delaware filtration plant, which an updated estimate would significantly exceed.

[NYC DEP, filtration avoidance determination](https://www.nyc.gov/site/dep/about/filtration-avoidance-determination.page) — The Catskill/Delaware waivers since 1993 and the conditions attached.

[World Resources Institute, Forest Resilience Bond release](https://www.wri.org/news/release-new-forest-resilience-bond-will-finance-25-million-restoration-reduce-wildfire-risk) — Yuba pilot of $4 million on about 15,000 acres, repaid; Yuba Water's contribution; repayment from beneficiaries.

[Denver Post, Aug 31, 2022](https://www.denverpost.com/2022/08/31/i-70-glenwood-canyon-mudslides-federal-money/) — CDOT's $32 million spent on the 2021 Glenwood Canyon incidents.

[Vail Daily, Aug 13, 2012](https://www.vaildaily.com/news/relief-efforts-under-way-after-flood/) — Eagle County's estimate of about $190,000 to clean public roads after the Sweetwater Road slides.

[Vail Daily, Aug 31, 2026](https://www.vaildaily.com/news/eagle-county-begins-clean-up-on-sweetwater-and-colorado-river-roads-after-mudslides-and-boulder-blockage/) — Sweetwater and Colorado River roads closed again; no cost published.

[The Nature Conservancy, Tahoe Donner wildfire resilience insurance, Apr 2025](https://www.nature.org/en-us/newsroom/ca-wildfire-resilience-insurance0/) — A $2.5 million cover over 1,345 acres; premium 39% lower and deductible 89% lower than without the forest work, per the sponsors.

[Sarah Conway, Risk and Resilience Ledger, "Ecosystems and the Limits of Price Recognition"](https://riskandresilienceledger.substack.com/p/ecosystems-and-the-limits-of-price) — Her argument that ecosystems preserve insurability more reliably than they lower a price.

[Narayan et al., *Scientific Reports* 7:9463, 2017](https://doi.org/10.1038/s41598-017-09269-z) — Wetlands avoided about $625 million in direct damage in Hurricane Sandy; about 16% lower annual flood losses in Ocean County, NJ, modeled with industry catastrophe models.

## the series

- [how to save money with ensurance](/guide/how-to-save-money-with-ensurance?from=guide)
- [what ensurance saves you: the four bills](/guide/what-ensurance-saves-you?from=guide)
- [how an intervention lowers the loss](/guide/how-an-intervention-lowers-the-loss?from=guide)
- [the quote beside the cost of doing nothing](/guide/the-quote-beside-the-cost-of-doing-nothing?from=guide)
- [ensurance and your cost of capital](/guide/ensurance-and-your-cost-of-capital?from=guide)
- [split the bill for what lowers it](/guide/split-the-bill-for-what-lowers-it?from=guide)
- [how to make money with ensurance](/guide/how-to-make-money-with-ensurance?from=guide)
- [how to lower insurance premiums](/guide/how-to-lower-insurance-premiums?from=guide)