Climate disasters cost the U.S. economy billions every year, but a new report found that every $1 communities invest in climate resilience and disaster preparedness saves $7 in economic costs and $6 for cleanup costs.

The 2024 Climate Resiliency Report, released in June, is a collaboration between the U.S. Chamber of Commerce, Allstate, and the U.S. Chamber of Commerce Foundation. It recommends communities expand access to basic services, implement early alert systems, and adopt zoning and building-code changes to prevent or reduce damage from climate catastrophes.

The report modeled 25 disasters affecting different areas and populations and examined the effect on local economies, including jobs, workforce participation, production, and residents’ earned income.

“Each scenario we modeled demonstrates that investing in resilience has remarkable benefits for communities,” said Marty Durbin, senior vice president of policy at the U.S. Chamber of Commerce. “This important study helps identify opportunities to reduce the economic costs of natural disasters.”

What the numbers show

The study revealed that investing $1 in resilience and disaster preparedness saves $7 in economic costs. Combine that with the already established ratio that $1 of investment reduces damages and cleanup costs by $6, and it adds up to a savings of $13.

Fifteen climate-disaster events with losses exceeding $1 billion have already hit the U.S. in 2024, according to the National Oceanic and Atmospheric Administration. Since 1980, the U.S. has averaged 8.5 “billion-dollar” events per year. The average for the last five years is 20.4.

With the frequency of disaster events increasing, more areas have seen significant impacts and have less time to recover. The study modeled a hurricane striking Miami, Florida, and causing $130 billion in damage. It found that investing $10.8 billion in resilience and preparedness would save the city $26 billion in lost production and $17 billion in lost income, as well as save hundreds of thousands of jobs and save people from leaving the workforce and area.

The effect on insurance

“The economic benefits of investing in resilience are clear. It’s also essential to the availability and affordability of insurance for years to come,” Elliot Stultz, Allstate’s senior vice president and chief sustainability officer, said in the report. “As communities struggle with the impacts of more frequent, severe weather, investments in resilience today can empower them to prosper.”

Florida, for example, has the most expensive average home insurance rate in the country, at $11,759, according to Insurify’s homeowners insurance report. Vulnerable areas like Louisiana and Oklahoma also face higher rates, and California’s high level of rate regulation has driven insurers from the state, saying premiums don’t reflect risk.

What’s next: Who will make the investment?

The study claims that “dollars spent on preparedness and resilience are much more effective at reducing the overall cost of disasters than dollars spent after the fact on recovery.” But it’s community and political leaders that dictate where those dollars are allocated.

A recent hearing regarding rising insurance costs showed divisions along party lines, with Democrats blaming “climate havoc” and Republicans blaming high interest rates and “expensive liberal policies.”

But the study’s authors persist that investing in resilience pays big returns.

“It’s critical that government and business decision makers at every level understand how such investments can improve the safety and strengthen the resiliency of their communities,” Marc DeCourcey, senior vice president at the U.S. Chamber of Commerce Foundation, said in the report.