How Will Climate Change Affect Your Homeowners Insurance?

Climate change and global warming are undeniably hot topics. They’ve been making headlines more now than ever, thanks in part to a proposed White House budget that would slash “many climate-related programs at agencies like NASA and the National Oceanic and Atmospheric Administration,” as the Washington Post reports.

On a practical level, many homeowners may be wondering how climate change will affect their property, and by extension, their homeowners insurance rates. For example, coastal dwellers have likely already seen the damage that rising sea levels and turbulent storm systems can wreak.

Wondering how climate change could affect you and how to get the best homeowners insurance? Keep reading to learn more.

Climate Change May Affect Where People Buy

For a long time, beachfront property was the epitome of luxury and relaxation. Imagine stepping out your back door and feeling sand between your toes! Beach or not, 39 percent of the U.S. population lived directly on the shoreline. That number is expected to increase by 8 percent by 2020.

But certain areas have been feeling the climate change-related pinch. The New York Times chronicles the difficulties for one couple trying to sell their home in Siesta Key, Fla. Though they had a stream of interested buyers, many backed out when they learned the annual premium for flood insurance would be a whopping $7,000.

One thing is clear: Flooding (and the risk of other natural disasters) is changing the real estate market as we know it. Many coastal property owners may be heading for higher ground soon as we experience a worsening pattern of storm-related incidents.

More Natural Disasters Equals Higher Premiums

U.S. News & World Report quotes one insurance industry manager on how rising weather records could drive up premiums across the board: “Increases in damages result in an increase in claims, which, for insurance companies, means higher losses and, for homeowners, may mean higher insurance rates.” Seeing as the National Flood Insurance Program is over $20 billion in debt, flood premiums will almost surely leap.

Going Green Can Help

Some insurers incentivize homeowners to go green—like those who generate their own geothermal, solar or wind power and even sell their surplus energy. Other policies help homeowners make green repairs or, in the event of an unfortunate disaster or accident, allow them to rebuild to even greener standards. If you’re interested in greening your homeowners insurance policy, it’s worthwhile to compare options.

The best homeowners insurance policy for your needs depends on where you live and the specifics of your property. But, knowing what you know now, you can take care to factor in climate change before you buy a new property or enroll in a new policy.

Compare your coverage options with CoverHound today.