How Will Climate Change Impact Homeowners Insurance in All 50 States?

Climate change will make extreme weather events more frequent and more severe, creating more risk for homeowners and insurers and likely spurring increased homeowners insurance premiums for policyholders.

Homes throughout the United States will be exposed to risks created or amplified by climate change.

Insurance companies are beginning to reassess risk with climate change in mind, leading to higher premiums or cancellation of coverage in certain areas that are particularly vulnerable to wildfires and storms.

While climate change will impact homes differently across the country, the bottom line is that policyholders will likely face higher rates and higher deductibles, while insurers will become more selective about providing coverage and may provide lower payouts.

How will climate change impact homeowners insurance?

By 2040, the cost of property lost to natural catastrophes, like wildfires, floods, and hurricanes, could increase by over 60% in the U.S. as a result of climate change, according to Swiss Re, the world’s largest reinsurer.

Swiss Re projects that globally, homeowners insurance premiums may increase 5.3% per year through 2040, in large part due to climate change.

Climate change may cause wildfire seasons to become longer, with more frequent and fierce blazes. Category 4 and 5 hurricanes may become more common and rainfall carried by tropical storms could increase by up to 20%. Increased precipitation across the U.S. may make “100-year floods” of rivers more likely. Sea level rise will present flooding challenges along coastlines.

The effects of climate change are already on display. The number of natural disasters resulting in at least $1 billion in losses was well above average in 2020 and 2021, according to risk-management company Aon. Those years combined caused $176 billion in insured loss in the U.S., shattering the previous record set in 2004 and 2005.

Insurance companies may already be rethinking how they underwrite homes in light of climate change, particularly in local markets vulnerable to those risks. And policyholders are beginning to feel the effects.

After record-breaking losses from wildfires over the last five years, insurance companies have increased rates for homeowners in vulnerable areas and even dropped some policyholders they deem to reside in areas too risky to insure.

Some homes on the coast are becoming uninsurable in the primary market as companies are taking a fresh look at risks carried from rising sea levels.

Others who did not have flood insurance because they weren’t deemed to be in a high-risk area have found themselves in difficult financial situations after unprecedented flooding events, like the remnants of Hurricane Ida flooding large swaths of New York City.

Insurance companies are also penalizing homeowners for not taking steps to mitigate against extreme weather and wildfires.

What is an "act of god" in homeowners insurance, and how will climate change affect "acts of god"?

An "act of god" is an event that humans can’t prevent and can do little to mitigate. Homeowners insurance typically covers some "acts of god" -- like damage from wind, hail, or fires, but not others, such as flooding and earthquakes.

Insurance policies for flooding and earthquakes must be purchased separately.

In practice, homeowners insurance policies list which perils are covered and which are excluded.

Understanding what perils are covered and which are excluded will become increasingly important for homeowners as climate change exposes more homes to flooding, wildfires, and named storms.

How will climate change impact flood insurance?

Homeowners insurance does not cover flooding. Instead, most homeowners get insured for flooding through the Federal Government’s National Flood Insurance Program (NFIP).

For the first time since the 1970s, the Federal Emergency Management Agency (FEMA) in 2021 updated its methodology to assess risk and pricing for the National Flood Insurance Program. The new methodology assesses risks to individual properties and incorporates more types of flood risks, including sea level rise and rainfall, instead of basing risk on general geography and property type.

Under the new risk methodology, 23% of current policyholders will experience immediate premium decreases, 66% will have premiums increase an average of $0 to $10 per month, and the remaining 11% will see premium increases of $10 or more per month.

Climate change will have a significant impact on the number of homes that require flood insurance and premiums that policyholders will pay.

Long-term premium projections under the new risk methodology are not available. However, flood insurance premiums in flood prone areas, particularly along the East and Gulf coasts, have substantially increased in recent years.

FEMA found that, under the previous methodology, the number of NFIP policies could increase by 80% to 100% by 2100, loss cost per policy could increase by 50% to 90%, and premium costs could increase by 40% to 70%, depending on whether shorelines recede as sea levels rise or they are maintained as-is. Population growth will drive about 30% of those changes, while climate change is responsible for the other 70%.

Some private insurers are beginning to offer flood insurance, but the market remains small.

Climate change’s effect on homeowners insurance may disproportionately impact certain communities

With projections suggesting that climate change will result in higher premiums for homeowners and some properties becoming uninsurable, some communities may face more hardship than others.

Multiple studies have found that underserved communities that are least prepared to mitigate the effects of climate change live in areas that are most exposed to the impacts climate change may have.

As a result, low-income homeowners are likely to be disproportionately impacted by climate change’s effect on homeowners insurance.

There is also evidence that retirees who live in coastal regions face significant hikes in their homeowners insurance premiums.

Studies suggest there are two likely outcomes for low-income residents and those on fixed-incomes with little financial flexibility.

Higher insurance rates due to climate change may price them out of the neighborhoods they reside in, which are typically in areas more exposed to the impacts of climate change and composed of older housing less able to withstand the effects of climate change.

Or they will forgo homeowners insurance, leaving them at risk of financial ruin if disaster strikes.

How climate change will affect homeowners insurance policies in all 50 states

Climate change will impact homeowners differently in all 50 states and within each state as well.

The following sources were relied on to highlight climate change-driven risks to homeowners in all 50 states:

• The 2022 State Climate Summaries from the National Oceanic and Atmospheric Administration (NOAA) National Centers for Environmental Information provides projections of future climate scenarios for each state.
• Projections of state impacts from climate change by the Environmental Protection Agency.
• The “US Coastal Property at Risk from Rising Seas” dataset produced by the Union of Concerned Scientists.
• Projections from First Street Foundation are used to determine properties at risk of flooding in each state. This data includes all property types that have flood risk, including vacant lots and non-residential properties.
• Data and analysis from the Insurance Information Institute.

Homeowners insurance does not cover flooding, however. Since flooding represents a significant climate change risk for homes across the country, flooding projections have been included for each state. Flood-prone areas, particularly along the East and Gulf Coasts, have seen flood insurance premiums significantly increase in recent years.

Alabama

Insurance companies in Alabama started assessing climate change risks in 2011 following a costly outbreak of tornadoes in the state. Rates on the coast have increased in recent years. Some companies added "hurricane deductibles" to policies following Hurricane Katrina.

Alabama mandates that insurance companies provide homeowners discounts if homes meet "Fortified" standards, a building standard that strengthens homes against extreme weather. Alabama provides grants and income tax credits to residents to undertake wind mitigation that meet "Fortified" standards as well.

Sea-level rise on the Alabama coast has occurred faster than the global rate over the last decade and as levels continue to rise, flooding and sinking land that can damage homes and other infrastructure is more likely, per NOAA.

Over 4,000 homes are at risk of flooding due to sea level rise by 2045, and nearly 18,000 will be at risk in 2100.

Alabama may also experience more frequent and intense hurricanes, which can damage homes through high winds and storm surge. Alabama is ranked 16th for the number of single-family homes at risk of damage by hurricanes, according to the Insurance Information Institute.

Nearly 335,000 properties in Alabama were at substantial flood risk in 2020, and that number could rise to almost 356,000 in 2050, a 6% increase, according to Flood Factor. Properties on the coast by Mobile as well as those in Montgomery, which sits along the Alabama River, are at particular risk.

Alaska

Coastal communities in Alaska are at risk as receding sea ice along Alaska’s coast effectively reduces protection from storms that can cause coastal erosion.

Alaska’s interior is threatened by melting permafrost, which can damage buildings and lead to land sinking, as well as wildfires.

As warmer and drier summers have become more common in Alaska, so has the frequency of wildfire seasons where more than 2,000 square miles have burned. Between 2015 and 2020, Alaska was the third-highest ranked state for catastrophe due to fire and lightning, per LexisNexis.

Arizona

Growing wildfire risk due to drought prolonged by climate change is the largest climate risk to homes in Arizona.

Nine percent of homes in Arizona, roughly 242,000 properties, are at risk from wildfires, according to the Insurance Information Institute.

118,700 properties in Arizona were at substantial risk of flooding in 2020, and that number is projected to rise 1.6% by 2050 to 120,600 homes, per the First Street Foundation.

Arkansas

Homes in Arkansas along the Mississippi and Arkansas rivers may be at risk of flood damage due to precipitation in Arkansas and states along the Mississippi River to the north driven by climate change.

In Arkansas, 191,600 properties were at substantial risk of flooding in 2020. By 2050, 195,000 properties are projected to be at risk, a 2% increase, according to the First Street Foundation.

California

California’s size and diversity of landscape means that homes in the state are subject to multiple climate risks, depending on their location.

Rivers in California are at increased risk of flooding due to increased precipitation and greater than usual snowmelt driven by climate change.

Drier summers have led to record-breaking wildfires in California in recent years. Between 2015 and 2020, California was the highest-ranked state for catastrophe claims due to fire and lightning, per LexisNexis. Drought conditions are expected to worsen due to climate change, heightening chances for more frequent and destructive wildfires.

Insurance companies have already faced historic losses from wildfires in California, leading to higher rates and dropping coverage for homeowners in areas at high risk of fires. In 2019, there was a 31% increase in homeowners insurance policies.

In 2019, California prohibited insurers from non-renewing policyholders in declared disaster areas. The moratorium has been extended each year since then.

California also requires insurance companies operating in the state to contribute to a fire insurance program of last resort, the California Fair Access to Insurance Requirements Plan. The plan ensures residents who cannot find fire coverage on the market can receive that type of coverage.

Currently, 15% of homes in California, roughly 2 million properties, are at risk from wildfires, according to the Insurance Information Institute.

Roughly 20,000 homes in California will be at risk of flooding due to rising sea levels by 2045, and 109,000 homes will be at risk by 2100.

Overall, nearly 1.1 million properties in California are at substantial flood risk, with that number increasing 5.5% by 2050 to put 1.15 million properties at risk, according to the First Street Foundation .

Cities in California’s Central Valley, including Sacramento and Fresno, are at risk of river and stormwater flooding. Southern California is at risk of flooding from rainfall.

Colorado

The severity and length of Colorado’s recent wildfire seasons is unprecedented. NOAA predicts that wildfires will become more frequent and destructive as climate change worsens drought conditions in Colorado.

Beginning in late December 2021, the Marshall Fire became the most costly and destructive wildfire in Colorado history. Insured losses reached $2 billion -- a mark never before hit outside of California.

Even before the Marshall Fire, insurance companies were opting not to renew policyholders or cover properties they deemed were at high risk from wildfires.

Currently, 17% of the homes in Colorado, nearly 375,000 properties, are at risk from wildfires, according to the Insurance Information Institute.

131,200 properties in Colorado are at substantial flood risk, and that number is projected to rise 2.4% to 134,400 by 2050, according to the First Street Foundation.

Cities on the Front Range are at risk of flooding from snowmelt, while flooding of the Colorado and Gunnison rivers may impact properties on the western side of the Continental Divide.

Connecticut

Sea level rise on the coast of Connecticut is projected to occur faster than the global rate, per NOAA.

Climate change may put homes on the coast of Connecticut and those along rivers inland at risk of flooding due to storm surge generated by more frequent and severe storms. Connecticut experienced more days of flooding capable of damaging homes between 2011 and 2020 than in any previous decade.

106,700 properties face substantial flood risk, and that number is projected to rise 10% to 117,000 in 2050, with coastal areas being most vulnerable.

Connecticut was the third-highest ranked state for catastrophe due to weather-related water peril between 2015 and 2020, per LexisNexis.

In 2021, Connecticut became the first state to pass climate risk legislation. The legislation requires Connecticut’s insurance commission to submit a report on how it is addressing climate risks.

Many Connecticut homeowners insurance providers will grant discounts for homes that have permanent storm shutters or impact-resistant glass.

Delaware

Homes on Delaware’s coast are vulnerable to more frequent flooding events driven by climate change in addition to sea level rise. Those risks may be amplified by sinking land and coastal erosion caused by an increase in precipitation and storms due to climate change, per NOAA.

As of 2020, 39,700 properties in Delaware faced substantial flood risk. That number is projected to grow 21% to 48,000 in 2050, in large part due to coastal flooding.

Florida

Greater precipitation from hurricanes and rising sea levels are the two largest climate change driven risks to homes in Florida.

Both generate greater flood risk for homes on the coast and further inland where stormwater drainage may become overwhelmed.

South Florida is particularly vulnerable due to urbanization, outdated flood management infrastructure, flat land, and aquifers that may overflow as a result of heavy precipitation events.

Florida was the second-highest ranked state for catastrophe claims due to wind peril between 2015 and 2020 per LexisNexis.

Over 64,000 homes in Florida will be at risk of sea level rise by 2045, and over a million will be at risk in 2100.

As of 2020, 1.8 million properties in Florida were at substantial risk of flooding. That number is projected to rise 19% to 2.2 million properties by 2050, according to the First Street Foundation, in large part due to sea level rise.

There is evidence that retirees on Florida’s coasts are seeing insurance premiums rapidly increase or having their coverage dropped altogether.

In the first 10 months of 2020, insurers in the state requested 105 rate increases.

Policyholders can receive discounts for using construction materials and techniques to mitigate storm damage. Florida provides Hurricane Loss Mitigation Retrofit Grants for inspections and construction to limit damage from hurricane-force winds. The Florida Property Assessed Clean Energy (PACE) program provides financing for hurricane resiliency efforts.

The amount of rain Florida receives is variable from year to year. Warming temperatures will make drought more likely and more severe during dry years, raising the risk of wildfires. Over 2,000 wildfires occurred in Florida in 2020 -- the fifth most wildfires in the U.S. that year -- with nearly 100,000 acres burning.

In 2020, Florida experienced 2,381 wildfires, ranking fifth in the nation for number of wildfires; a total of 99,413 acres burned.

Georgia

Georgia’s coastline sits at a low elevation, putting homes there at high risk of flooding. Sea level rise has already increased the number of days of flooding on Georgia’s coast that represents a risk to homes, per NOAA.

347,700 properties were at substantial flood risk in 2020. The number of properties at substantial risk is expected to rise by 10%, up to 382,100 by 2050, per the First Street Foundation. Areas along the coast as well as inland, including surrounding Atlanta, are at risk.

Georgia was also the fifth-highest ranked states for catastrophe claims due to wind peril between 2015 and 2020, per LexisNexis. This is a likely reflection of its vulnerability to hurricanes and other tropical storms which may intensify due to climate change.

The Georgia Underwriting Association Mitigation Program provides discounts for homes that take steps to incorporate "Fortified" standards.

Hawaii

Rising sea levels are already creating risks to Hawaii, albeit with some variability between islands.

Sea level rise poses multiple challenges for Hawaii. Coastal erosion and shoreline recession are projected to accelerate over the coming decades due to climate change, making floods that can damage homes more likely.

Idaho

Idaho may see increased flood risk as snowfall in the winter and spring shifts to rain and more precipitation overall is projected during those seasons.

148,400 properties face substantial flood risk, and that number is projected to climb 8% to 159,900 by 2050, according to the First Street Foundation. Communities along the Snake River may face flooding due to climate change.

Climate change may increase the severity of droughts in Idaho, making wildfires more frequent and severe in the state. Even if overall precipitation increases for the state, warmer weather will reduce snowpack and dry soil more quickly, setting up wildfire conditions.

Illinois

Climate change may increase the occurrence of heavy precipitation and rapid snowmelt, which pose flooding risks for homes along the Mississippi River as well as urban areas that are outside of mapped floodplains.

451,700 properties face substantial flood risk, and that number is projected to rise 4% by 2050 to 471,700, according to the First Street Foundation. Over 150,000 properties in Chicago are at risk of flooding.

Indiana

Indiana has experienced an uptick in extreme precipitation events over the past two decades, which has led to damaging flooding in areas adjacent to rivers and reservoirs. Climate change may increase the frequency and severity of those events as well as flooding.

282,500 properties in Indiana are at substantial risk of flooding, and that number is projected to rise 4% by 2050 to 295,000 properties, according to the First Street Foundation.

Iowa

Iowa has seen an increase in extreme precipitation events over the past two decades compared to previous periods. Climate change is expected to make such events more common and severe, putting homes in the numerous towns and cities along the Mississippi River and Big Sioux River, along with the Missouri, Raccoon, and Des Moines rivers, at risk of flooding.

294,000 properties are at substantial risk of flooding in Iowa, and that number is not projected to grow over the coming decades.

Kansas

In Kansas, warmer temperatures due to climate change may lead to drier conditions during times of drought, making wildfires more common and destructive.

133,400 properties in Kansas are at substantial risk of flooding, and that number is projected to rise 1% by 2050 to 134,600, according to the First Street Foundation.

Kentucky

Kentucky already receives a high number of severe storms, some of which result in flash flooding. Extreme precipitation events in the winter and spring are projected to increase and be more intense as a result of climate change, which could heighten the chances of flooding.

227,000 properties in Kentucky face substantial flood risk, and that number will rise 3% by 2050 to 234,300. Parts of Louisville that sit at low elevation and have poor drainage may be at particular risk.

Louisiana

Louisiana is no stranger to hurricanes, and rainfall from hurricanes is projected to increase as a result of climate change, bringing with it a higher risk of flooding.

In 2020, the state had the highest loss cost covered by insurance companies because of a worse than normal hurricane season, according to LexisNexis. Louisiana was the highest ranked state for catastrophe claims due to wind peril between 2015 and 2020.

Sea level rise is another risk for Louisiana homeowners and insurance companies. Low elevation and sinking land throughout Louisiana puts homes across the state at risk of rising sea levels and corresponding flooding.

Homes along the coast, including those in New Orleans, are at particular risk due to the loss of wetland and sinking land. Because of sinking land, the rate of sea level rise on certain parts of the coast is four times higher than the global rate.

Overall, 477,100 properties in Louisiana face substantial flood risk, and that number is projected to rise 70% by 2050 to 809,800.

Homeowners insurance rates in Louisiana’s southeast, covering New Orleans and Baton Rouge, rose by between 74% and 175% from 2004 to 2015.

Flooding is also a risk for homes along the Mississippi River.

Maine

Sea level rise and more frequent and extreme precipitation events due to climate change pose flooding risks for homes in Maine.

Along Maine’s coast, some cities and towns are at risk of losing up to 30% of their land, according to NOAA. The flood risk for coastal Maine is among the most serious in the country, according to the First Street Foundation.

55,700 properties in Maine are at substantial flood risk, and that number will increase 8% to 59,900 by 2050, according to the First Street Foundation.

Maryland

Flooding as a result of increased precipitation and rising sea levels due to climate change poses a major risk to Maryland homeowners.

Maryland has experienced higher than average total precipitation and more frequent extreme precipitation events in recent decades. Precipitation is expected to increase in Maryland as a result of climate change, creating more frequent and severe flood risks in urban areas and exposing more of the state to flood damage. Hurricanes and tropical storms have historically led to flooding.

The Chesapeake Bay region is among the most vulnerable to rising sea levels. Seal level rise is amplified by shore erosion, flooding of wetlands, and low elevation. As a result, the sea level has risen in the area 50% more than the global average.

Since 2000, the number of floods that could damage infrastructure in Maryland has steadily increased.

Between 2015 and 2020, Maryland was the fifth-highest ranked state for catastrophe due to weather-related water peril, per LexisNexis.

133,700 properties face substantial flood risk in Maryland, and that number is projected to rise 15% by 2050 to 153,500, according to the First Street Foundation.

Massachusetts

Coastal homes in Massachusetts are at risk of rising sea levels due to climate change. The rate of sea level rise in Massachusetts has been higher than the global rate, and the coast suffers from sinking land, making the effects of sea level rise more pronounced.

The coast, including Boston, has seen an uptick in flooding that can damage homes and other property over the last two decades.

Between 2015 and 2020, Massachusetts was the highest-ranked state for catastrophe due to weather-related water peril, per LexisNexis.

193,300 properties in Massachusetts are currently at substantial flood risk, and that number is projected to rise 11.4% by 2050 to 215,400, according to the First Street Foundation.

Michigan

In Michigan, 315,600 properties are at substantial risk of flooding, and that number is projected to grow 5% to 329,700 by 2050.

Heavy rain can cause flash flooding in Michigan, including in Detroit which has an aging sewer system.

Minnesota

Annual precipitation is projected to increase in Minnesota as a result of climate change, raising the risk of flooding.

215,600 properties are at substantial risk of flooding in Minnesota, and that number will rise 2% by 2050 to 219,100.

Mississippi

Increased precipitation leading to flooding along the Mississippi River and sea level rise due to climate change pose risks for homes in Mississippi.

Homes along the Gulf Coast of Mississippi, such as those in major population centers like Gulfport and Biloxi, are at particular risk of rising sea levels due to barrier islands off the coast eroding. The erosion of barrier islands also amplifies the risk of storm surge damaging homes on the coast, particularly during hurricane season.

255,700 properties currently face substantial flood risk in Mississippi, and that number will grow 10% by 2050 to 280,700, according to the First Street Foundation.

The Mississippi Insurance Commissioner recently predicted that rates could increase by about 6%.

Missouri

River flooding represents a significant risk to homes in Missouri, and will pose an even larger one due to climate change increasing precipitation in the state and in those upstream of Missouri.

The Mississippi, Missouri, and Ohio rivers have caused significant flooding damage to homes and other property in the past, and more frequent and severe precipitation in Missouri and states upstream pose a risk to homes along those rivers.

Currently, 280,200 properties face substantial flood risk, and that number is projected to increase by 2% by 2050 to 285,400 properties, according to the First Street Foundation.

Montana

Climate change may spur more frequent and severe wildfires in Montana as higher temperatures create drier conditions in the summer.

Increased precipitation and more rapid snowmelt as a result of climate change may cause rivers to flood throughout Montana.

The First Street Foundation projects that 122,600 properties are currently at substantial flood risk, and that number will rise 5% by 2050 to 128,300.

Nebraska

Homes along Nebraska’s numerous rivers will be at higher risk of flooding due to increased precipitation as a result of climate change in coming decades.

In March 2019, warm weather triggered snowmelt and river ice melt to oversaturate land after a wetter than normal fall, leading to flooding along the Big Blue, Elkhorn, Loup, Missouri, and Platte rivers. The flooding impacted residential areas and was one of the most expensive inland flooding events in U.S. history, costing a total of $11 billion with impacts felt across multiple states.

102,000 properties in Nebraska are at substantial flood risk. That number will not change over the next three decades, according to the First Street Foundation.

Nevada

Climate change may increase the severity and frequency of wildfires in Nevada, although its impact on homeowners may be blunted given that the majority of the state’s residents live in the Las Vegas and Reno-Sparks areas.

Still, 6% of homes in Nevada, about 67,000 properties, are currently at risk from wildfires, per the Insurance Information Institute.

44,600 properties in the state are at substantial flood risk, and that number is projected to rise 6% by 2050 to 47,300 properties, according to the First Street Foundation. Flash flooding occurs throughout Nevada. Urban areas at low elevation are at particular risk.

New Hampshire

Like other coastal New England states, New Hampshire homes face increasing flood risks as a result of climate change driving more precipitation and sea level rise.

New Hampshire may see extreme precipitation events double in frequency over the century if greenhouse gas emissions remain near current levels, an outcome that could increase flooding.

Between 2015 and 2020, New Hampshire was the fourth-highest ranked state for catastrophe due to weather related water peril, per LexisNexis.

The First Street Foundation projects that 64,900 properties in New Hampshire face substantial flood risk, and that number will climb 5% by 2050 to 67,900. Property on the coast as well as along inland rivers are at risk, with coastal cities like Portsmouth most vulnerable.

New Jersey

Coastal and inland flooding may become an elevated risk for homeowners in New Jersey due to climate change.

New Jersey has seen an increase in coastal storms over the past two decades, including the notable example of Superstorm Sandy in 2012, which damaged nearly 350,000 homes in the state.

Climate change is projected to increase precipitation in New Jersey and bring with it increased flood risks for homeowners throughout the state.

Sea level rise in New Jersey has outpaced the global average and the number of flood events in the state that risk damage to homes and other properties has been on the rise.

385,400 properties in New Jersey face substantial flood risk, and that number is projected to rise 19% by 2050 to 459,000, according to the First Street Foundation. Properties along the Jersey Shore face higher tides and flooding from storms. Inland, properties along the Raritan River face risks from increased precipitation causing the river to overflow.

New Mexico

Wildfires may pose a greater risk to homeowners in New Mexico as climate change creates warmer and drier conditions in coming decades.

Fifteen percent of the homes in New Mexico, roughly 132,000 properties, are at risk from wildfires, according to the Insurance Information Institute.

128,800 properties in New Mexico face substantial flood risk, and that number is projected to rise 0.7% by 2050 to 129,700, per the First Street Foundation. Flash flooding is a risk for lower elevations.

New York

Climate change may drive coastal flooding along New York’s densely populated coast as a result of rising sea levels and more intense and frequent precipitation, including during hurricanes and tropical storms.

Sea level rise along New York’s coastline is occurring at a faster rate than the global average and the number of flood events that have the potential to damage homes and other infrastructure has increased in recent years.

615,500 properties in New York are at substantial flood risk, and that number is projected to rise 12% by 2050 to 688,800.

Urbanization poses challenges to flood mitigation in New York City and the surrounding area.

North Carolina

A significant chunk of North Carolina’s coast is at risk of rising sea levels and more severe and frequent hurricane rainfall and storm intensity as a result of climate change.

North Carolina is already experiencing an increase in flooding that can damage homes and other buildings , including in Wilmington which is home to over 120,000 people. More frequent flooding is predicted due to climate change.

A large part of North Carolina’s coast is at low elevation and suffers from sinking, which may create major flood challenges for homeowners.

The First Street Foundation estimates that 538,900 properties in North Carolina face substantial flood risk, and that number will increase 12% by 2050 to 604,000.

North Dakota

The Red River Valley in North Dakota, in which Fargo and Grand Forks sit, is prone to flooding and may experience more frequent flooding due to climate change.

56,400 properties in the states face substantial flood risk, and that number is projected to rise 2.4% by 2050 to 57,700.

Wildfires may become more common as climate change spurs more severe droughts in the state.

Ohio

Ohio’s rivers may be more prone to flooding as a result of more frequent extreme precipitation events driven by climate change.

493,000 properties in Ohio face substantial flood risk, and that number will rise by 5% to 519,700 by 2050.

Oklahoma

Warmer temperatures and drier conditions driven by climate change may make wildfires in Oklahoma more severe and frequent in the future.

Nine percent of homes in Oklahoma, about 153,000 structures, are currently at wildfire risk, per the Insurance Information Institute.

Oregon

Oregon homeowners face two growing threats from climate change: more frequent and severe wildfires and rising sea levels.

Climate change will cause drier summers and higher temperatures in Oregon, which may increase wildfire risk for homeowners. The results may already be in motion. Oregon experienced its largest wildfire since the 1800s in 2012, while fires ongoing during Labor Day 2020 were larger in combination and burned over 2,000 buildings.

Between 2015 and 2020, Oregon was the fourth-highest ranked state for catastrophe due to fire and lightning, per LexisNexis.

The state passed legislation in 2021 that requires property owners to mitigate wildfire risk by creating defensible space, which is a gap between vegetation and buildings on property.

Nine percent of the homes in Oregon, about 148,000 buildings, are currently at wildfire risk, according to the Insurance Information Institute.

On the coast, sea level rise may impact thousands of homes in the latter half of the century.

268,000 properties in Oregon face substantial flood risk, and that number is projected to rise 6% by 2050 to 284,600. Portland, Salem, and Eugene sit in the Willamette Valley which may be vulnerable to springtime flooding from rapid snowmelt in the surrounding mountains.

Pennsylvania

Homes in Pennsylvania are at risk of greater flooding and sea level rise due to climate change.

Precipitation is expected to increase in Pennsylvania and snowmelt is projected to occur earlier in the spring, which may create conditions for more frequent and intense flooding.

On the coast and up the Delaware Estuary, sea level rise presents a risk for homeowners. Philadelphia, where 1.5 million people live, has seen sea level rise over the global average. Communities along the Allegheny and Monongahela rivers may also experience flooding. Floods that have the potential to damage homes and buildings have increased over the last decade.

Rhode Island

Coastal homes in Rhode Island are at risk of flooding from more frequent extreme precipitation and rising sea levels, both driven by global warming. Inland rivers flooded in 2010 following above average precipitation.

Between 2015 to 2020, Rhode Island was the second highest-ranked state for catastrophe due to weather related water peril, per LexisNexis.

26,500 properties are at substantial flood risk, and that number is projected to rise 15% by 2050 to 30,400.

South Carolina

Sea level rise and corresponding coastal flooding may be a major challenge for South Carolina.

The rate of sea level rise at Charleston, where 135,000 alone live, is double the global rate.

Eight hundred square miles around Charleston sit on relatively low ground and are also vulnerable to rising sea levels.

South Carolina has already seen higher rates of flooding that can damage infrastructure and homes.

Areas inland, including around Columbia, have flooded after heavy rain.

271,500 properties face substantial flood risk in South Carolina, and that number is projected to rise 17% by 2050, to 316,900.

South Dakota

2019 was a record-setting year for flooding in South Dakota, and more frequent extreme precipitation events may increase flooding risks around the numerous rivers in the state. Communities along the Big Sioux, Missouri, and Rapid Creek rivers are vulnerable to flooding.

62,600 properties in the state are at substantial flood risk. That number is projected to rise 0.6% by 2050 to 63,000.

Tennessee

Flooding is the most pressing climate risk for Tennessee. 383,200 properties are at substantial flood risk, and that number will rise 3% by 2050 to 395,600.

Texas

The Texas coastline faces flooding risks due to climate change causing more intense hurricanes and rainfall, as well as rising sea levels. Houston, Corpus Christi, and Port Arthur are at particular risk.

West Texas, including El Paso, may experience heavier rains during the state’s monsoon season.

1.15 million properties in Texas are at substantial flood risk. That number is projected to increase by 16% to 1.33 million by 2050.

Drier conditions brought about by climate change will increase wildfire risks in the state.

Currently, 7% of the homes in Texas, about 718,000 structures, are at risk from wildfires, according to the Insurance Information Institute.

Utah

Warmer and drier conditions driven by global warming may increase the frequency and severity of wildfires in Utah.

Fourteen percent of the homes in Utah, 136,000 properties, are at risk from wildfires, per the Insurance Information Institute.

Some 113,100 properties in Utah are at substantial flood risk. That number is projected to increase by 7% to 120,900 properties by 2050. Communities in the Salt Lake Valley may be at risk of rapid snowmelt and precipitation raising the level of Utah Lake and the Jordan River.

Vermont

Vermont is projected to receive above average precipitation due to climate change, which may increase the risk of flooding.

39,700 properties in Vermont are at substantial flood risk, and that number is projected to increase by 2% to 40,600 by 2050.

Virginia

Virginia homeowners on the coast face sea levels rising at a rate faster than the global average. Norfolk, home to nearly 250,000 people, is at particular risk from flooding.

Flooding that can damage homes and other buildings has become more frequent over the past two decades. Areas inland, particularly along the James River, are at risk of flooding from more intense precipitation.

344,400 properties in Virginia are at substantial flood risk. That number will grow 13% by 2050 to 389,700.

A 2013 report found rising insurance premiums on Virginia’s shoreline. The study warned that more expensive private and flood insurance threaten to hollow out some communities on the coast and gentrify others by pricing residents out.

Washington

Washington may face more frequent and severe wildfires as well as sea level rise impacting homes on the coast, including in Seattle, due to climate change.

Hotter and drier summers in addition to less snowpack that melts earlier in the season may result in wildfires that are more frequent and destructive.

Five percent of the homes in Washington, about 156,000 properties, are at wildfire risk, according to the Insurance Information Institute.

Rising sea levels may create flood risk for Seattle and communities along the Puget Sound, such as Tacoma.

362,600 properties face substantial flood risk in Washington. That number will grow 6% by 2050 to 384,400.

West Virginia

Flooding is already the most costly natural disaster in West Virginia, and increasing precipitation due to climate change may increase flood risk in the state. Huntington and Charleston are at risk of the Kanawha and Ohio rivers flooding.

326,600 properties are at substantial flood risk. That will grow by 1% to 331,500 properties by 2050.

Wisconsin

Wisconsin homeowners face relatively little risk from climate change.

273,400 properties are currently at substantial flood risk. That number will increase by 3% to 281,100 by 2050.

Wyoming

Wyoming faces both flood and wildfire risks due to climate change.

Warmer weather may cause snow to shift to rain, while climate change is projected to increase precipitation in the state, which may generate flood risk.

Warmer temperatures and less available snowmelt in the summer may ripen conditions for more severe and frequent wildfires.

Currently, 14% of homes, some 36,800 properties, in Wyoming are at wildfire risk, according to the Insurance Information Institute.

Heavy precipitation may increase chances of flash flooding throughout the state. 35,200 properties face substantial flood risk, and that number will grow 6% by 2050 to 37,200.

How to reduce homeowners insurance premium increases due to climate change

Homeowners insurance providers may offer discounts for policyholders that take steps to mitigate damage to their homes from extreme weather events, including those that may become more severe and frequent as a result of climate change.

In areas vulnerable to storms, new, weather-resistant windows could result in lower premiums.

In areas prone to wildfires, homeowners can mitigate risk and potentially lower premiums by creating a “defensible space.” This can be done by establishing a gap between structures and vegetation and other flammable material.

Homeowners can also use fireproof or resistant materials and designs for walls and roofs.

A more costly mitigation step is to install sprinkler systems designed to prevent fire from spreading on the property.

Some states offer incentives for homeowners to modify their homes to meet the “Fortified” building standard or make similar improvements. These improvements make homes more resistant to extreme weather, including wind, rain, and hail. Incentives include insurance discounts, grants, or tax credits to offset the costs of home improvements.

States that offer incentives for homes that meet Fortified standards are: Alabama, Georgia, Mississippi, North Carolina, Oklahoma, and South Carolina.

States that offer incentives for homes that make upgrades similar to what is required by Fortified standards are: Connecticut, Florida, Louisiana, Maryland, New Jersey, New York, Rhode Island, and Texas.

How to reduce flood insurance premium increases due to climate change

In areas prone to flooding, homeowners have multiple options to reduce premiums.

If they have a policy with the National Flood Insurance Program, policyholders can elevate their property, machinery and equipment above the lowest floor, and install flood openings below the Base Flood Elevation to receive mitigation credits. The BFE is the level floodwater is projected to reach during a once-in-100-years flood. The BFE can be found in Flood Insurance Rate Maps and can be provided by floodplain managers.

Policyholders can receive discounts based on mitigation actions undertaken by their community as well.

What parts of your homeowners insurance policy should be reviewed because of climate change?

Homeowners may want to take a close look at their policies in light of the threats climate change poses.

Some homeowners insurance policies exclude “named storms,” which may put policyholders in a financially vulnerable position if their property is in a location that is expected to face more severe and frequent hurricanes and tropical storms.

Insurance providers may also increase deductibles or shift policyholders to percentage deductibles in areas prone to extreme weather fueled by climate change.

Insurance companies may also set out separate, higher deductibles for weather perils that are likely to become more frequent and damaging in particular areas.

It is also worth checking how robust your policy is when it comes to paying out “reasonable and customary costs” for “additional living expenses.” This part of your policy covers expenses insurers are required to pay when a covered event causes a policyholder to no longer be able to live in their home. In the wake of recent wildfires, some policyholders have complained that their insurance did not cover hotel stays for a sufficient period of time for their homes to be rebuilt.

What should homeowners insurance policyholders do to prepare for climate change?

Recognizing that climate change may impact your homeowners insurance policy is a crucial first step towards preparing for the future.

To position yourself for how climate change may impact homeowners insurance, policyholders can take the following additional steps:

• Determine if climate change will amplify existing weather risks to your home or create new ones, like flooding, wildfires, or intense storms.
• Review your homeowners insurance policy to determine which perils are covered and which aren’t. Then decide if you should purchase additional insurance, like flood insurance.
• Reach out to your homeowners insurance provider to determine if there are discounts you can receive for making your home more resilient to the effects of climate change. Research if your state provides incentives for taking similar measures.

Sources

• AECOM (2013). “The Impact of Climate Change and Population Growth on the National Flood Insurance Program Through 2100.”
• Aon (2022). “2021 Weather, Climate and Catastrophe Insight.”
• Bloomberg (2019). “Louisiana Unveils Ambitious Plan to Help People Get Out of the Way of Climate Change.”
• California Legislative Analysts Office.“Climate Change Impacts Across California Housing.”
• Denver Post (2019). “As wildfire risk increases in Colorado and the West, home insurance grows harder to find.”
• Environmental Protection Agency (2017). “Climate Change Impacts by State.”
• The Federal Reserve Bank of Chicago (2021). “Homeowners insurance and climate change.”
• FEMA (2021). “Risk Rating 2.0: Equity in Action.”
• Fortified. “Financial Incentives.”
• Insurance Information Institute. “Facts + Statistics: Hurricanes.”
• Insurance Information Institute. “Facts + Statistics: Hail.”
• LexisNexis (2021). “2021 LexisNexis® Home Insurance Trends Report.”
• New York Times (2021). “With Extreme Weather, Home Insurance Will Cost More. If You Can Get It.”
• New York Times (2022). “Extreme Weather and Rising Insurance Rates Squeeze Retirees.”
• Next City (2018). “What Alabama Can Teach You about Storm Resilience.”
• NOAA (2022). “State Climate Summaries.”
• Pew (2020). “Financially Stretched Homeowners Might Skimp on Insurance. And Hurricane Season is Here.
• Reuters (2021). “Florida consumers 'flabbergasted' as property insurers push for double-digit rate hikes.”
• Swiss Re Institute (2021). “More risk: the changing nature of P&C insurance opportunities to 2040.”
• WCBI (2022). “How Mississippi insurance companies can adapt to the rise in severe weather.”
• Wetlands Watch (2013). “Homeowners Insurance Changes in Coastal Virginia
• Causes and consequences for shoreline communities.”
• The White House (2021). “A Roadmap to Build a Climate-Resilient Economy.”