Climate change continues to amplify vulnerability in low-income communities across Nairobi, with many urban livelihoods at great risk to the impacts of flooding. This study explores the scope for index insurance in Nairobi for flood risk at the micro-level. Drawing from relevant academic literature, this paper considers the role of social capital and trust as an analytical framework for studying the interactions between the community and institutions for managing flood risk. Thus, the role of social capital and trust in improving accessibility, availability and inclusiveness of insurance will form the analytical framework around which the thesis of this dissertation will be based. 17 individuals from flood-prone areas in Nairobi, alongside 12 key informants from relevant organisations were interviewed. Through a contextual comparative analysis, this dissertation found that trust and capacity building play a dominant role in providing an enabling environment and creating a demand for IBMI.