Protecting communities, preserving nature and building resiliency: how first-of-its-kind climate insurance will help combat the costs of wildfires, extreme heat, and floods

This report provides a forward-looking approach to increasing investment in community mitigation, particularly for nature-based approaches that reduce long-term risks by increasing investment in forests, seagrasses, and other natural systems that can lower either the probability of a disaster occurring or reduce losses when it does occur. Such mitigation will save households from damages and make insurance more affordable. Findings from the National Institute for Building Sciences indicate that every dollar invested in pre-disaster mitigation saves six dollars by avoiding future recovery costs.

The report also explores how financial tools, namely insurance, could make vulnerable communities and the state more resilient in the face of escalating climate impact. Insurance can be an underappreciated cornerstone of community resilience. It not only supports recovery to climate disasters, but can also provide incentives for climate adaptation, such as incentives for fortifying homes or reducing risk in communities, through better building and land-use strategies, thus buffering some future impacts.