🔄 Risk-Transfer & Resilience Insurance Mechanisms

• In South Florida, a parametric insurance policy purchased by The Miami Foundation provides immediate post-flooding resources for communities with the greatest vulnerabilities and limited traditional coverage. Developed with three municipalities to identify priority neighbourhoods in advance, the policy ensures funding flows quickly after extreme rainfall.
• Other cities are testing parametric triggers based on rainfall intensity, wind speed or water levels. These instruments pay out automatically when thresholds are reached, allowing agencies to accelerate recovery without waiting for conventional damage assessments.
• Cities are also creating public financing mechanisms that function as collective resilience insurance. In Oakland, a voter-approved wildfire parcel tax generates annual funding for vegetation management and fuel reduction in high-risk areas, providing a stable revenue stream for prevention and response.

Together, these examples show how cities are using insurance products and public risk-pooling approaches to strengthen their financial resilience as climate impacts intensify.

Climate shocks can cause sudden financial strain that disrupts services and delays recovery. Risk-transfer mechanisms provide timely resources when they are needed most and help cities plan with greater certainty. They also encourage proactive investment by linking financial incentives with climate resilience outcomes.