Insult to injury: Natural disasters and residents' financial health

This study builds evidence on how disasters impact Americans' financial health. The analyses compare the financial outcomes of residents in areas hit by disasters to otherwise similar people in unaffected communities.

Four general themes emerge in the findings of this study:

• Disasters lead to broad, and often substantial, negative impacts on financial health.
• The negative effects of disasters persist, or even grow over time, for important financial outcomes.
• Medium-sized disasters appear to lead to larger and more consistently negative effects on financial health than large disasters, though this conclusion is tempered somewhat by the fact that most of the people affected by medium-sized disasters in the analysis were hit by the 2014 storms and flooding in urban areas in and around Detroit.
• People and communities more likely to be struggling financially before disasters strike are often the hardest hit by disasters, suggesting a widening of existing inequalities.

The findings provide insight into strategies to promote resilience and recovery for multiple actors — regulators, the government (local, state, federal), philanthropy, and nonprofit leaders focused on financial health. For example, the main conclusions suggest post-disaster programs and resources should consider long-term financial needs, in addition to more immediate needs.