Improving the financial resilience of public entities and individuals for natural disasters: a resource guide for State and local government
This report provides a resource documenting programs and products that some communities have adopted to help improve individual and community financial resilience. Many of these products are available from the private sector, and others are programs developed by public entities or nongovernmental organizations. Improving the financial resilience of public entities and individuals after a natural disaster strengthens and speeds up a community's ability to recover.
The key findings of this report, include:
- Disasters in the United States have grown costlier and more frequent and are having a significant financial impact on U.S. households.
- Although private insurance and federal assistance benefits provide help after a disaster, households still face gaps in coverage, and local governments also experience significant financial burdens after a disaster.
- Three key factors contribute to economic vulnerability for vulnerable groups in the United States: housing costs, limited ability to cover unexpected expenses, and location and mobility challenges.
- The private sector offers parametric insurance products to public entities to fill budget gaps created by disasters.
- The private sector has also developed a variety of parametric insurance products for individuals.
- Several state governments have created catastrophe savings accounts, which are tax-advantaged savings accounts that can be used to provide quick cash and cover out-of-pocket expenses after a disaster.
- Community-based insurance models have been proposed that spell out various roles a local government or special-purpose district might take in arranging coverage for individual properties in the community.
- Charities and nongovernmental organizations have developed innovative approaches for distributing assistance, including blockchain mechanisms for direct cash payments and forecast-based financing.
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