U.S. homeowners are worried that climate change is impacting the values of their houses amid elevated insurance costs across the country fueled by the increased frequency of natural disasters.
Forty percent of homeowners who have had to file insurance claims say that climate change is affecting their home values, according to a survey from Insurify. Overall, 25 percent said climate change is responsible for bringing down their property values, while 60 percent said the opposite.
The concern over climate change comes as homeowners insurance costs are soaring across the country, particularly in states like California, Texas and Florida, as weather-related disruptions are forcing the cost of coverage to skyrocket and in some cases compel insurance companies to cease providing services.
The average annual cost of insurance jumped by nearly 20 percent in 2023 from two years earlier, according to Insurify, to nearly $2,400. For 2024, the insurance shopping platform forecast that costs will jump 6 percent to more than $2,500 by the end of the year.
"Early weather forecasts predict a devastating hurricane season, which would cause further rate increases in 2025," Insurify's Cassie Sheets wrote in the report.
Florida has been hit the hardest by the crisis as the region sees storms, hurricanes and other weather-related incidents increase in frequency and intensity. Insurance in the state cost close to $11,000 annually and is forecast to jump by 7 percent this year.
"Six of the 10 most expensive cities for homeowners insurance are in Florida," Sheets pointed out.
Meanwhile, Louisiana is estimated to see the highest increase in home insurance of 23 percent to an average of $7,800. Maine will also see a jump of 19 percent to about $1,500, followed by Michigan, where costs will increase by 14 percent to more than $2,000.
"The states with the highest home insurance costs are prone to severe weather events. Florida, Louisiana, Texas, Arkansas, and Mississippi are vulnerable to hurricanes," Sheets said.
"Texas, Colorado, and Nebraska face a growing wildfire risk. Nebraska, Texas, and Kansas are at high risk for tornadoes, being located in an area nicknamed Tornado Alley."
Sheets went on to say that weather risks are part of the reason insurance costs are becoming more expensive.
"Severe weather risks have long influenced rates in Louisiana, but the effects of climate change are catching up to states with historically lower-than-average rates, like Maine," Sheets said. "The Maine Climate Council projects a 1.5-foot relative sea level rise (SLR) by 2050. Coastal storm impacts will increase 10 times in frequency with just one foot of SLR."
The survey found that when it comes to whether Americans believe that climate change is affecting home values, one-third of Gen Z and millennials thought yes, while only 14 percent of Gen Xers agreed.
As younger people enter the stage of their lives when they are starting to think of homeownership, states affected by weather-related disruptions could become less attractive to live as home insurance costs become a concern.
"As more Gen Z homebuyers enter the housing market, areas with high climate resiliency may become more desirable than states more affected by climate change," Sheets added.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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Omar Mohammed is a Newsweek reporter based in the Greater Boston area. His focus is reporting on the Economy and ... Read more
