Homeowners say climate change is destroying their home values

Homeowners in the US are concerned that climate change is affecting their home values ​​amid rising insurance costs across the country, driven by the increased frequency of natural disasters.

Forty percent of homeowners who have had to file insurance claims say climate change is affecting their home values, according to a survey by Insurify. Overall, 25 percent said climate change is responsible for lowering their property values, while 60 percent said the opposite.

The concern about climate change comes as homeowner insurance costs are rising across the country, especially in states like California, Texas and Florida, as weather-related outages are forcing the cost of coverage up and in some cases forcing companies to of insurance to interrupt the provision of services. .

The average annual cost of insurance rose nearly 20 percent in 2023 from two years ago, according to Insurify, to nearly $2,400. For 2024, the insurance shopping platform predicts costs will rise 6 percent to more than $2,500 by the end of the year.

Californian
Landslide along the Angeles Crest Highway on March 30 near La Cañada-Flintridge, California. The increased frequency of natural disasters has caused an insurance crisis for homeowners in the state.

David McNew/Getty Images

“Early weather forecasts predict a devastating hurricane season that would cause further rate increases in 2025,” Insurify’s Cassie Sheets wrote in the report.

Florida has been hardest hit by the crisis as the region sees storms, hurricanes and other weather-related incidents increasing in frequency and intensity. Insurance in the state costs roughly $11,000 a year and is projected to increase 7 percent this year.

“Six of the 10 most expensive cities for homeowners insurance are in Florida,” Sheets noted.

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 19 percent jump to about $1,500, followed by Michigan, where costs will rise 14 percent to more than $2,000.

“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 an increased fire risk. Nebraska, Texas and Kansas are at high risk from 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 getting more expensive.

“Severe weather hazards have long affected rates in Louisiana, but the effects of climate change are reaching states with historically lower-than-average rates, such as Maine,” Sheets said. “The Maine Climate Council projects a relative sea level rise (SLR) of 1.5 feet by 2050. Coastal storm impacts will increase 10-fold in frequency with just one foot of SLR.”

The survey found that when it comes to whether Americans believe climate change is affecting home values, one-third of Gen Z and millennials thought yes, while only 14 percent of Gen Xers agreed.

As young people enter the stage of their lives when they are starting to think about home ownership, states affected by weather-related outages may become less attractive to live in as home insurance costs become a concern.

“As more Gen Z homebuyers enter the housing market, areas with high climate resilience may become more desirable than states most affected by climate change,” Sheets added.