The occurrence of climate change has increased the probability of flash floods and changed the intensity and frequency of such events in recent years. Iran is one of the high risk countries in terms of the occurrence of natural disasters. Iraian societies have greatly suffered from economic and social damages due to flash floods in urban areas in recent years. Assessing and compensating damages is one of the most important actions after a flood occurrence. Flood insurance is an important tool to compensate for the losses in a timely and appropriate manner and also to reduce the economic pressure and tension between the people and the government. Since economic and social issues are intertwined with each other, examining the issue of flood insurance and using it requires systemic thinking. In this study, the effect of insurance coverage of residential buildings on economic and social variables in Emamzadeh Davood region was evaluated as a case study using Vensim PLE software. For this purpose, the amount of changes in economic vulnerability, buildings covered by insurance, insurance company's income and people's prosperity were investigated under four different scenarios. In each scenario, the results of changing the amount of insurance compensation and subsidy paid by the government were evaluated to investigate the role of each of them in reducing the economic vulnerability and the resulting social consequences. The results of this research showed that if the government pays 35% of the premium as a subsidy and the flood insurance companies compensate 100% of the damage, all residents in the studied area will buy flood insurance for their homes by 2050. Due to the existence of very complex relationships in socio-economic issues in societies, it is necessary to use more influential variables in future studies that can reduce the level of uncertainty and obtain more accurate results.