Natural Disaster Financing

Natural disaster financing refers to the financial methods used to manage the costs associated with disasters like floods, earthquakes, or hurricanes. This can include government budgets, insurance policies, and risk transfer mechanisms. Governments often set aside emergency funds or purchase insurance to cover unexpected expenses. Additionally, financial instruments like bonds or catastrophe bonds can be issued to raise money specifically for disaster recovery. The goal is to ensure that resources are available quickly to support recovery efforts and rebuild communities after a disaster strikes, minimizing economic and social impacts.