Some of you reading this may have seen headlines about FEMA naming Los Angeles County the riskiest place for natural disasters in the U.S. However, we at Palomar think that’s just one part of the story, and that everyone in America needs to see the tool FEMA used to award LA this dubious honor.
What is FEMA’s National Risk Index?
Earlier this month, the agency released their brand-new National Risk Index. The Index is an important resource that ranks American communities according to their exposure to risks from a variety of natural catastrophes. Crucially, it anticipates not only the human and economic costs associated with disasters, but also addresses the “resilience” of every corner of our country, measured at the county and even census tract levels.
Palomar applauds FEMA for creating the Index, which we believe will help everyone, from the federal government to private insurers to home and business owners, view catastrophe in a new, more holistic manner. Climate change is making natural disasters stronger and more frequent, and the U.S. needs a unified, coordinated approach to mitigating the damage. Recovering from a natural disaster isn’t just about the physical cleanup—a truly resilient community, as FEMA notes, has the infrastructure, government and private sector resources, and financial stability to help the region bounce back economically.
Tackling catastrophic risk before it happens
The FEMA National Risk Index reminds us how crucial it is that we address catastrophic risk upfront, not just reactively. In California, this can be done through mitigation activities such as the wildfire initiatives recommended in California Governor Newsom’s budget proposal, and through new initiatives in regions vulnerable to other perils such as wind, earthquake and flood.
We must also reckon with the potentially enormous human and economic costs of disaster and plan accordingly for recovery on the back end. In short, we need to build an economic resiliency chain that includes not only federal and state governments, but also private companies like Palomar and other insurers and service providers. Neither government nor industry can address this urgent imperative alone; we must create new partnerships to ensure that the worst-case scenarios envisaged by FEMA never come to pass.
We want to again thank FEMA for their leadership, and look forward to the policy debates that this tool will surely prompt.
Visit our Resources page to learn more about natural disaster preparedness.
