Rising Home Insurance Costs Amid Increasing Natural Disasters
Home insurance is becoming increasingly expensive as climate change fuels more intense hurricanes, wildfires, and severe storms. In response, states are developing new strategies to help homeowners protect their properties. One approach involves encouraging homeowners to retrofit their homes against disasters in exchange for insurance discounts.
In Alabama, a pioneering program has been successful in promoting ‘fortified roofs’ that are designed to withstand hurricane-force winds. Homeowners like Ron Watson in Spanish Fort have benefited from this initiative. Watson’s roof was strengthened with a waterproof layer and special wind-resistant nails, reducing his insurance premium by 20-35%. The program, which has been adopted by over 50,000 homeowners in Alabama, offers grants of up to $10,000 to help cover the cost of such upgrades.
Other states, including Louisiana and Mississippi, have followed Alabama’s lead by launching their own insurance discount programs. However, the adoption of similar programs in states prone to different types of natural disasters, such as California, has been slower. In California, where wildfires are a major concern, insurance discounts for fire-resistant home upgrades are typically lower, ranging from 8-15%.
Homeowner Elizabeth Stage in Oakland, California, has taken steps to make her home more resistant to wildfires by using fire-resistant materials for her deck, siding, and roof. While she received a discount on her insurance premium, it was limited to 15%. Experts suggest that one challenge in promoting such upgrades is that the benefits of fire-hardening a home can be diminished if neighboring properties are not similarly protected.
As insurance companies continue to raise premiums due to increasing climate-related risks, state lawmakers are being urged to consider regulations that would incentivize insurers to reward homeowners for taking disaster mitigation measures. The current system leaves many homeowners vulnerable to losing their insurance coverage altogether, with nearly 2 million people nationwide losing their insurance between 2018 and 2023.
While insurance discounts can provide some motivation, many homeowners are driven more by the need to protect their homes and ensure they can maintain insurance coverage. As the climate continues to change, finding effective solutions to make homes and communities more resilient will be crucial.
