Home Insurance in the Age of Climate Change: What to Expect
NEW YORK — A wake-up call has been sounded for homeowners across the United States: A newly released report from First Street Foundation suggests that many Americans may soon be priced out of insuring their homes, thanks in part to the increasing risks associated with climate change. The study warns that the issue is far more widespread than initially thought, and could affect pockets of the country beyond just the traditionally vulnerable areas like California, Florida, and Louisiana.
According to the comprehensive analysis, states frequently hit by natural disasters—be it wildfires, hurricanes, or flooding—are already on the path toward skyrocketing insurance premiums. However, the report also shines a light on less-discussed incidents, such as the tragic fire that obliterated the Hawaiian community of Lahaina this past August and the record-setting floods in Vermont and Maine in July. These events signal a nationwide trend that could lead to escalating insurance costs for homeowners, even in areas traditionally considered low-risk.
California Sen. Bill Dodd, who represents regions like Napa and Sonoma that were ravaged by wildfires in recent years, put it bluntly: “If you’re not worried, you’re not paying attention.” Dodd underscores the urgency to address the underestimated impact of climate change on homeowners’ insurance.
First Street’s groundbreaking study also reveals a jaw-dropping statistic: about 39 million properties, or approximately one in four homes in the U.S., are currently underpriced in terms of the climate risk they face. Jeremy Porter, head of climate implications at First Street and a co-author of the report, emphasized the uneven impact. “Some regions may experience only nominal rate hikes, but others could see their insurance premiums skyrocket in the near future,” he warned.
With a situation as fluid and far-reaching as this, homeowners nationwide would do well to start reevaluating their insurance needs in light of the evolving climate realities.
