Beyond the Payoff: How Investments in Resilience and Disaster Preparedness Protect Communities

Introduction

More disasters, higher costs, uneven community preparedness

In 2024 alone, the U.S. experienced 27 separate billion-dollar disasters, totaling $182.7 billion in damages. That marked the fifth consecutive year with 18 or more such events, underscoring a new normal for communities across the country.

Storms are becoming more frequent, more severe, and more expensive. While disasters are inevitable, their toll on people, property, and the economy is not. Strategic investments in resilience can reduce disruption, speed recovery, and protect lives and livelihoods.

• $33

  Every $1 not invested in disaster resilience today can cost communities up to $33 in lost future economic activity

In June 2024, the U.S. Chamber of Commerce, Allstate, and the U.S. Chamber of Commerce Foundation released The Preparedness Payoff: The Economic Benefits of Investing in Climate Resilience, which found that every $1 invested in disaster preparedness saves $13 in future losses. This follow-up report, Beyond the Payoff, builds on that research and shows that underinvestment today can cost communities even more tomorrow-up to $33 in lost future economic activity for every dollar not spent before a disaster strikes.

This report also highlights how local, state, and federal leaders can take action. Resilience is a shared responsibility. By adopting a calibrated, risk-informed approach, communities can strengthen their adaptive capacity and reduce long-term costs.

Our goal is to help all Americans, including policymakers, business leaders, families, and individuals better understand the risks posed by severe weather and recognize the role we all play in building safer, stronger, and more resilient communities for generations to come.

Executive Summary

Disaster Resilience Is a High-Return Investment

This study models four disaster preparedness investment scenarios to show how different funding levels can shape the future economic health of a community. Each scenario assumes a disaster occurs 10 years from now, in 2035.

The findings are clear:

• Every dollar of forgone investment today results in an average of $22.60 in lost future economic activity after a disaster strikes.[1]
• In some cases, the cost of the forgone investment climbs even higher. Over the next decade, communities could lose more than $30 for every dollar not spent on preparedness (see Droughts in the Southwest/Plains, Scenario 4).
• Resilience funding protects jobs. For example, in hurricane scenarios, our study finds forgone investment (Scenario 4) could lead to the loss of up to 131,000 jobs.
• Preparedness is not just a safety measure. It's a local economic development strategy.
• High investment in resilience cuts GDP losses by billions. For example, in tornado-prone areas, high investment cuts GDP losses by $1.3 billion.
• Across all scenarios, lower funding leads to significantly higher long-term costs.

Investing in disaster preparedness, resilience, and mitigation is a smart, cost-saving strategy that protects both communities and economies, no matter when or where severe weather strikes.

Perspectives from the Field

In addition to economic modeling, Allstate and the U.S. Chamber surveyed emergency managers, engineers, planners, and other resilience professionals.[2] Their insights, detailed in Appendix 2 reveal widespread agreement on the need for better coordination and more efficient use of resources.

Key takeaways include:

• Coordination between public and private sectors needs improvement. Half of respondents say current efforts are poorly coordinated, while another 46% say there's room for improvement.
• Fifty-nine percent say clearer processes and better resource allocation would have the greatest impact on improving partnerships.
• Federal financial assistance is essential. Most respondents (58%) say it is the most needed form of support during a disaster.

Few experts believe that any level of government is fully prepared for weather-related disasters. These findings underscore the need for smarter investment, stronger collaboration, and a shared commitment to building resilience across sectors and communities.

The Path Forward: Building Stronger American Communities

There are many tools that communities can use to reduce risk and strengthen their ability to recover faster from disasters. Knowing where and how to focus efforts is key to achieving resilient outcomes, and this can be done by investing across six key "Levers of Resilience," outlined near the end of this report:

• Risk-Informed Design
• Infrastructure and Predisaster Mitigation
• Economic Continuity and Diversification
• Governance and Cross-Sector Leadership
• Civic Engagement
• Performance Measurement and Accountability

Simply put, proactive investments in disaster preparedness and resilience both protect communities and yield long term economic benefits.

[1] On average, across all types of disasters analyzed and using investment scenario 4.

[2] Respondents needed to be an emergency manager, community planning and development officer, financial controller, chief resilience officer, risk and resilience officer, or management-level professional at a disaster-related organization in the U.S.

Disaster Scenarios and their Impact

The following disaster scenarios demonstrate that investing in preparedness before a disaster strikes is a smart, cost-saving strategy. As preparedness funding increases, communities could also see job creation and growth, population gains, and rising income and productivity.

Some disasters-such as floods, extreme heat, severe wind, and rainstorms-can happen almost anywhere. Others, like earthquakes and hurricanes, tend to affect specific regions. For example, Florida has experienced more hurricane landfalls than any other state. Texas ranks second, but every Gulf Coast and Atlantic-bordering state, along with U.S. island-territories, faces significant hurricane risk.

To assess the potential economic and practical outcomes for different preparedness approaches, the study modeled five types of large-scale disasters across four disaster investment scenarios. Each scenario was applied to locales where the corresponding disasters are most likely to occur. The disasters are assumed to take place in 2035, allowing for a 10-year investment window.

• Scenario 1: High Resilience Investment- Sustained support from government funding, private investment, community involvement, and strong operations and data-driven planning. Assumes communities adopt strict zoning and building codes, make investments in infrastructure, and enact property tax rebates for installing flood-, wind-, or fire-proofing measures, with the objective of cutting future damages in half.
• Scenario 2: Calibrated Investment-Focuses on infrastructure and risk-management strategies along with other initiatives that are above the Low Investment scenario but not as high as the High Resilience one, with investment levels sufficient to reduce damages by 25%.
• Scenario 3: Low Investment-Reflects thecurrent state in many communities, emphasizing "softer" resilience measures like household preparedness and early warning systems. Investment and damage levels remain unchanged.
• Scenario 4: Limited Investment-Represents a minimal investment approach, similar to spending levels before most federal resilience programs were developed and when resilience was just entering the national consciousness. Investment declines and damages increase compared to current conditions.

The disaster types modeled include:

• Hurricanes (Gulf/Atlantic regions)
• Tornadoes (Midwest and Southeast)
• Wildfires (Western U.S.)
• Drought (Southwest and Plains)
• Flooding (River and coastal areas)

Hurricanes in the Gulf/Atlantic Regions

This study shows that every $1 not invested in hurricane preparedness spending results in more than $7 in lost future economic activity.

Hurricanes are the most damaging disaster type analyzed in this report. In Scenario 1, where investment is high enough to cut damages from a $100 billion storm occurring in 2035 by half, the affected community would experience the following impacts:

• More than 59,000 lost jobs
• Nearly 28,000 people leave the area permanently
• Local GDP declines by almost $11 billion

These losses are substantial due to the destructive nature of hurricanes. Conversely, in Scenario 4, where preparedness investment falls by $1 billion over 10 years (or $100 million annually), the economic toll more than doubles:

• Job losses exceed 131,000
• Over 84,000 people relocate permanently
• Local GDP declines by more than $24 billion

Compared to Scenario 1, this means an additional 72,000 jobs lost, 56,000 more people permanently displaced, and $13.2 billion in added GDP losses. These figures include the billions of dollars in infrastructure damage and cleanup costs that also follow a major hurricane.

Hurricanes can disrupt community services and critical infrastructure for months or even years. Impacts often include long-term disruptions to drinking water, electricity, waste removal, and other essential services. Housing, schools, and household stability are also affected-sometimes with lasting consequences for student learning outcomes. In some cases, a severe hurricane can effectively wipe out a coastal community's travel and hospitality sector, eliminating thousands of jobs.

For example, Hurricane Helene in 2024 was the strongest hurricane on record to strike the Big Bend region of Florida and caused billions of dollars in damage to Georgia's agriculture sector. Helene's most severe impacts were from the historic rainfall (over 30 inches) and record-breaking flooding across much of western North Carolina. Asheville and many surrounding cities and communities were heavily impacted, as were southwestern Virginia and eastern Tennessee. Helene was the deadliest Atlantic hurricane to strike the U.S. mainland since Katrina (2005). Helene's total costs were $78.7 billion.

North Carolina-with federal government support-has worked to repair or rebuild over 1,000 roads, restore power/water access to thousands of residences, and reopen state parks and cultural sites.

Scenarios 2 and 3, which model moderate and current investment levels, also reduce long-term economic losses, but not as significantly as scenario 1. These comparisons are seen in the table.

Overall, the data shows that a community could incur a cost of $7.84 for every dollar not invested in disaster resilience.

See the Methodology section for a detailed breakdown of this calculation.

Investing More Reduces Damage From a $100 Billion Hurricane
Chart shows investment or losses over 10 years

Tornadoes in the Midwest/Southeast

Every $1 not invested in tornado preparedness could result in more than $25 of lost future economic activity.

In Scenario 1, where investment is high enough to reduce damages from a $1 billion storm occurring in 2035 by half, the affected community would experience the following impacts:

• More than 6,000 lost jobs
• Over 1,800 people leave the area permanently
• GDP declines by $940 million

These are substantial impacts. However, in Scenario 4-where investment falls by $1 million over 10 years (or $100,000 annually)-the economic toll more than doubles:

• Job losses exceed 14,500
• More than 4,400 people relocate permanently
• Local GDP drops by more than $2.2 billion

Compared to Scenario 1, this means an additional 8,400 jobs lost, 2,600 more people displaced, and $1.3 billion in added GDP losses.

Tornadoes strike with little warning, often leaving communities devastated. In the case of a tornado, emergency responses include providing shelter and food; distributing cleanup supplies like shovels, rakes, tarps, and gloves; assessing home damage; offering mental health support; and reuniting separated families. Recovery efforts involve rebuilding, reinforcing infrastructure, and repairing early warning systems.

Tornadoes costing $1 billion or more are not uncommon. The Joplin tornado of 2011, with winds estimated at more than 200 miles per hour, killed 161, injured over 1,000, and wrecked more than 8,000 buildings, including a major hospital and other critical facilities. The high number of fatalities made it the deadliest single tornado in the U.S. since the National Weather Service (NWS) began official record keeping in 1950. And the $2.8 billion in damages made it the costliest.

Scenarios 2 and 3, which model moderate and current investment levels, also reduce long-term economic losses, but not as significantly as Scenario 1. These comparisons are shown in the table.

Overall, the data shows that a community could incur a cost of $25.15 for every dollar not invested in disaster resilience.

See the Methodology section for a detailed breakdown of this calculation.

Investing More Reduces Damage From a $1 Billion Tornado
Chart shows investment or losses over 10 years

See Appendix 1 for the Wildfire, Drought and Flooding Disaster Scenarios.

Levers of Resilience

Building Stronger American Communities

The research in this report, along with its 2024 companion report, The Preparedness Payoff, reinforces what many resilience practitioners already know: Communities that invest in preparedness and mitigation see long-term economic, social, and safety benefits. As disaster costs continue to rise, the case for strategically calibrated, long-term investment becomes even stronger. These investments reduce risk and strengthen recovery capacity.

Achieving resilient outcomes depends on knowing where and how to focus. This can be guided by six key "Levers of Resilience," which outline where communities should invest to maximize impact. These levers support targeted, risk-informed decisions and provide a structured approach for aligning local actions with national resilience goals, ensuring that resources are effectively deployed.

1. Risk-Informed Design

Integrate hazard mitigation into the built environment through modern building codes, zoning, hazard mapping, and land use planning-ideally driven by community priorities.

• Key Actions: Adopt and enforce hazard-resistant building codes, improve access to risk data, and incentivize compliance
• Strategic Value: Reduces structural vulnerability and long-term recovery costs
• Indicators: Code adoption rates, reduction in insured losses, and alignment of design standards with localized risk profiles

Studies from FEMA, McKinsey & Company, and IBHS explore how risk-informed design strengthens resilience.

2. Infrastructure and Predisaster Mitigation

Ensure that critical lifeline infrastructure systems-such as power, water, transportation, and communications-can withstand disruption, recover quickly, and adapt to future hazards.

• Key Actions:
  • Modernize infrastructure using resilient design principles and nature-based solutions
  • Integrate resilience into capital improvement planning
  • Leverage public-private partnerships
• Strategic Value: Minimizes service disruptions, enhances continuity of essential systems, and reduces high response costs
• Indicators: Utility downtime metrics, tracking progress related to integrating infrastructure resilience into investment portfolios

The Urban Index for Critical Infrastructure and National Institute of Building Sciences (NIBS) research show that every $1 invested in mitigation can save an average of $6 in future disaster costs.

3. Economic Continuity and Diversification

Strengthen the economic fabric of communities to withstand and recover from disruptions while maintaining economic vitality before, during and after disasters. Chambers of commerce, along with local and state governments, can play a key role in helping communities prepare and respond.

• Key Actions: Support small business resilience and contingency planning, expand insurance coverage, invest in workforce development, and strengthen supply chains
• Strategic Value: Enhances economic stability and accelerates recovery
• Indicators: Business survival rates, job retention, insurance coverage, and supply chain resilience

A 2022 report from the National Academies of Sciences emphasizes small business continuity as a critical factor in community recovery.

4. Governance and Cross-Sector Leadership

Foster coordinated leadership and governance structures that span sectors and levels of government.

• Key Actions: Establish mutual aid agreements, streamline interagency coordination, and align resilience strategies with local priorities
• Strategic Value: Improves operational efficiency and ensures cohesive disaster response and recovery
• Indicators: Effectiveness of coordination mechanisms, resource allocation, resource-sharing metrics, and stakeholder engagement levels

The Journal of Leadership Education explores these dynamics in its 2018 study Establishing Behavioral Norms for the Emergence of Collective Leadership.

5. Civic Engagement

Build a culture of preparedness through inclusive engagement and transparent communication. Community foundations and corporate social responsibility programs are natural allies for achieving resilience goals.

• Key Actions: Launch public awareness campaigns, engage community-based organizations, and promote household-level preparedness
• Strategic Value: Builds trust, strengthens social cohesion, and empowers communities to act
• Indicators: Participation in preparedness activities, insurance uptake, and public understanding of risk and response protocols

Recent work from the RAND Corporation and the U.S. Chamber of Commerce Foundation emphasizes the importance of community preparedness.

6. Performance Measurement and Accountability

Use data-driven tools to evaluate resilience outcomes and guide continuous improvement. Whether a resilience scorecard or a roadmap for a community or organization, tracking progress is essential to reducing risk and achieving desired outcomes.

• Key Actions: Implement resilience scorecards, conduct risk modeling, and integrate performance metrics into planning and budgeting
• Strategic Value: Supports evidence-based decision-making and demonstrates return on investment
• Indicators: Accuracy of risk assessments, use of decision-support tools, and alignment with federal performance mandates

The National Research Council's study, Disaster Resilience: A National Imperative, emphasizes the importance of performance measurement and accountability.

A Calibrated Path Forward

While this framework does not prescribe specific funding levels for each lever, it emphasizes the importance of establishing baseline metrics, setting measurable goals, and aligning investments with community-specific risks. The funding level for each lever is community dependent, meaning that it would not make sense to prescribe a funding level given the unique needs of each community; therefore, levels of investment should vary. However, by adopting a calibrated, risk-informed approach, communities can strengthen their adaptive capacity and contribute to a more resilient nation.

Top Recommendations

For Communities Looking to Build Resilience

Here are some actionable and scalable recommendations for communities seeking more resilient outcomes and disaster preparation:

Conclusion

Our modeling found that every dollar cut from disaster preparedness today could multiply costs 10 years from now by a factor of seven or more. For every dollar of reduced investment, communities can expect to lose between $7 and $33 in future economic activity.

The long-term costs for a community skyrocket if disaster preparedness funding is reduced. But with strategic, calibrated investments, these losses can be substantially reduced.

Today, government budgets at all levels are at risk of reduced funding. Now is the time to engage in a national dialogue and explore how best to invest in sensible disaster preparedness and resilience programs and policies before disaster strikes. Investing in preparedness-such as building smart, modern, and resilient infrastructure-ensures that communities, and the people living there will enjoy a safer, more prosperous, and secure future.

Report prepared in partnership with: