Insurance, and Preparedness as Pillars of Resilience
By Chelsea Bartlett, Associate, Data, Strategy, & Communications – Shining Rock Ventures , for Appalachian Community Capital and the Appalachian Community Capital Data Hub . With a contribution from Shannon O’Shea, Director of Strategic Initiatives at Carolina Community Impact
Rural Appalachia is facing a new normal of overlapping climatic, economic, and infrastructure shocks. When floods submerge main streets, when credit tightens or revenues fall, or when supply chains stall, small businesses absorb the first and hardest hits. For many, the difference between reopening and permanent closure comes down to two things: insurance and preparedness.
The stakes are clear; about 40 percent of businesses never reopen after a major disaster, and among those that do, failure within one year is common, especially without strong continuity plans [1]. In communities that are already economically fragile, those numbers aren’t just statistics; they are shuttered storefronts, foregone paychecks, depleted communities, and lost generational wealth.
Small businesses make up 99% of all businesses in Appalachia, making them the backbone of the region’s commercial fabric [2]. But they’re more than just revenue engines; they are community anchors and vehicles for generational wealth. When a small business closes, especially in rural counties, it isn’t just lost commerce; it’s a lost pathway to building equity, passing assets to the next generation, and sustaining generational stability. Preserving these businesses isn’t optional; it’s central to preserving economic mobility, local wealth, and community cohesion across Appalachia. For people in rural Appalachia, a local enterprise that endures can mean the difference between a hollowed-out downtown and a thriving, resilient local economy. As disruptions become more common, that is precisely where insurance and preparedness come into play.
At the Rural Resilience Forum, participants emphasized that there are two interlocking shortfalls undermining insurance coverage, and preparedness:
Coverage clarity: many business owners assume they’re insured, only to learn post-disaster that critical perils (or interruption periods) were excluded or inadequately covered. When Hurricane Helene hit in 2024, thousands of Appalachian homeowners and small-business owners discovered they lacked flood coverage entirely, believing their standard policies would protect them [3] [4]. This resulted in uninsured flood losses estimated to be between 20 and 30 billion dollars [5], and a growing distrust of the insurance industry [6].
Business-interruption preparation: even with physical damage covered, few businesses plan proactively for downtime, lost revenue, or fixed costs during recovery. Closing this gap depends on trust. Owners are far more likely to complete simple continuity steps when guidance comes through familiar channels like chambers, co-ops, and community lenders they already know.
Underlying both gaps there is a common barrier, trust. Without trust, even the best information or preparation fails to translate into action. This is why it is vital for any efforts here to be made with a core focus of trust building and must be undertaken by organizations with strong community trust.
In many rural places, an uninsured loss cascades. A shock to one business reverberates through families, employees, suppliers, and the broader local economy. The underinsurance problem isn’t limited to standalone disasters like Hurricane Helene; it’s structural. Across the U.S., with only about 30-40% of small businesses carrying business-interruption coverage, even though disruptions, not destruction, are often what put them out of business. And about 75% of small firms are underinsured, with more than 70% unsure what their policies actually cover [7]. The consequences are stark. Businesses experiencing a catastrophic loss closing for 30 days or more, face about a 25% chance of never reopening, and the businesses that do reopen ultimately close within three to five years [8]. When these closures cluster in rural areas, where one business might root an entire local economy, the ripple effects spread quickly through workers, families, and local economies. Over time, these shocks erode local economic mobility, limiting opportunities for advancement, savings, and entrepreneurship. The loss of even a few employers or small businesses can halt progress that took decades to build, reducing pathways for residents to start or sustain small enterprises of their own. For households already balancing limited resources, it can mean the difference between stability and long-term financial setback, weakening the foundation for future asset-building, resilience, and community reinvestment. Real-time efforts across the region already reflect how CDFIs are stepping in to close insurance gaps.
One example is Carolina Community Impact’s InSPIRe program
From Recovery to Resilience: Inside Carolina Community Impact’s InSPIRe Program
“When Hurricane Helene caused devastating losses in Western North Carolina, many small businesses were left with critical gaps from denied or underfunded insurance claims – gaps that slowed recovery and added financial strain. Carolina Community Impact (CCI) created InSPIRe, the Insurance Supplement Program for Inclusive Recovery, to help support these businesses with grants, expert assistance, and connections to additional resources, and to learn what innovations could be brought to the marketplace for a more resilience future for our small business economy. InSPIRe provides modest cash grants (up to $5,000) and wrap-around support to businesses that filed Helene-related insurance claims but were denied or underfunded. While these grants won’t erase every loss, together with other support and resources, they can help cover critical expenses and keep recovery moving. At CCI we’re committed to going above and beyond, not just offering relief and assistance but building innovative solutions for the future. That’s why the InSPIRe program is also partnering with research experts to understand the role disaster insurance has played in WNC’s small business recovery, what gaps remain, and what innovations could improve business resilience in the face of increasing uncertainty. By collecting data on coverage gaps, claim experiences, and recovery needs, InSPIRe aims to inform new models that could scale beyond this pilot. InSPIRe is about more than immediate relief; it’s about building a smarter, more inclusive safety net for small businesses facing disasters. Learn more and start the pre-qualification process at www.ccifund.org/InSPIRe“.
At the Rural Resilience Forum, participants called for practical, community-driven solutions rather than theoretical fixes. Some top recommendations included:
- Insurance education for coverage clarity: Use trusted local networks to help owners understand what their policies do and don’t cover, including exclusions and waiting periods.
- Templates for business-interruption planning: Provide simple, small-business-friendly checklists and worksheets to plan for downtime, protect cash flow, and cover fixed costs during recovery.
- Trust networks: Build ties with local communities and community organizations so that, when disaster hits, small-business owners already know who they can turn to for support.
These approaches work best together, with insurance, planning, and community-based trust forming a layered safety net. Insurance alone doesn’t make a business resilient; without it, resilience rarely stands a chance. The same is true for preparedness. Clear policies keep businesses covered, and simple continuity plans keep them operating through downtime. And trust built through local communities and community organizations turns information into action, helping assistance reach those who need it faster and making both coverage checks and continuity planning stick. In the wake of Hurricane Helene and other disasters, the lesson is simple but urgent; resilience cannot wait for disaster. It must be preemptively designed into how we lend, plan, and educate now. Programs like Carolina Community Impact’s InSPIRe initiative show how these recommendations take shape in practice, leveraging trusted local networks to help small businesses navigate denied or underfunded claims after Hurricane Helene and begin rebuilding with clarity and support.
Rooted in long-standing community trust and mission-driven lending, CDFIs are uniquely equipped to lead on closing insurance information, coverage, and preparedness gaps, strengthening small businesses and uplifting vulnerable communities. That leadership turns principle into practice. A shared CRM can keep outreach, templates, and trust-building organized, and schedule timely touchpoints, so coverage checks and continuity planning do not slip through the cracks. DeepRoots serves as a community-access layer that meets owners where they are, using simple QR codes and bilingual materials to connect businesses to insurance education, peer and partner networks that can help, and right-fit lending when needed. Together with CDFIs, the Data hub’s lightweight CRM and DeepRoots can work to build trust and make it actionable, coordinating targeted communication, rapid follow-up, and timely links to education, peers, and capital.
The outcome is bigger than readiness, it’s resilience. Every trusted connection, coverage check, and continuity plan strengthens the backbone of Appalachia’s economy and the networks that hold its communities together.
Preparing for risk is only one piece of resilience; the next step is protection itself. In our next post, we’ll explore Assurance Products, how pooled and trigger-based models can fill the gaps traditional insurance leaves behind.
Keep an eye out for upcoming pieces in this series as we continue unpacking topics from the Rural Resilience Forum, one layer of resilience at a time.
Sources:
[1] https://www.candsins.com/blog/business-interruption-insurance-explained/
[6] https://thenarrativematters.com/the-growing-mistrust-in-insurance-companies/
To read more and follow the series, visit the Appalachian Community Capital Data Hub on LinkedIn.
