According to experts, as climate change threatens the U.S. with more natural disasters, it is becoming more expensive for Americans to keep their homes insured.
Jeremy Porter is the chief research officer at First Street Foundation, a non-profit that focuses on defining U.S. climate risk.
There were 20 billion-dollar disasters in the U.S. in 2021.
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Climate events and rising costs to rebuild have led to higher homeowners insurance premiums.
Pat Howard is the Managing Editor and licensed home insurance expert at Policygenius.
According to a Policygenius report, some 90% of U.S. homeowners saw premiums go up from May 2021, to May 2022, costing them an average of $134 more per year.
Surges have been higher in disaster-prone states like Arkansas, Washington and Colorado than in the rest of the country.
Water-damaged items sit outside a house in Squabble Creek, Kentucky, on July 31, 2022, after historic flooding in Eastern Kentucky.Brad Wright, a certified financial planner and managing partner of Launch Financial Planning, said erosion and rising sea levels are increasing concerns for clients interested in coastal properties.
There are always questions about flood risks when buying a home in southern Maine. They can choose to stay in another home.
It is possible for owners to purchase or own in flood prone areas. The Federal Emergency Management Agency identified 8 million properties at risk for 1-in-100-year flooding, but the First Street Foundation found nearly double that in a 2020 report.
These family houses have been around forever, and they may not have a mortgage, so flood insurance may not be required.
Standard homeowners insurance policies don't cover flooding, but protection can be obtained through FEMA or private coverage. Experts say the cost may be much higher in high-risk areas.
In October of last year, FEMA changed its program to more accurately assess flood risk, causing insurance premiums for some coastal properties to rise to $4,000 or $5,000 annually, up from just $700 or $800.
Lower-income families and retirees may not be able to afford these hikes because they are so expensive.
He said that flood insurance might not be required because the family houses have been around for a long time. They shouldn't have it anyways.
Flames burn during the McKinney Fire in the Klamath National Forest on July 31, 2022.According to Michael Barry, chief communications officer at the Insurance Information Institute, policy premiums in fire-prone areas have become more expensive due to the fact that wildfires are covered by the standard homeowners insurance coverage.
He said that the home insurer wanted to price the policy to reflect the risk.
Policygenius states that premiums rose by 10% in California from May 2021. to May 2022, with the increase in costly wildfires partially to blame.
If you move into an area that’s prone to wildfires or flooding, that cost goes up dramatically because the carrier is passing that on to the consumer.
The president and CEO of Parrott Wealth Management has seen rising premiums in high-risk regions.
If you move into an area prone to floods or wildfires, the cost will go up a lot. A lot of people spend a lot of money on that.
According to the First Street Foundation, at least 10 million properties are at risk of fire.
Barry of the Insurance Information Institute says it's important to do your homework before buying a property.
ClimateCheck or Risk Factor can be used to measure long-term climate risk for a specific property.
According to Howard from PolicyGenius, current homeowners can ask their insurance provider for discounts on storm-proofing their home.
If you bundle home and auto policies, you can save money. He said that homeowners insurance isn't a "set-it-and-forget-it" type of thing.
If you have enough emergency savings, you may want to increase your deductible.
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