Climate change isn’t just disrupting the temperatures and weather. Many insurance policy carriers are also under the impact of extreme weather associated with the change in the climate. Their losses are rising significantly because of the resulting damages, which is why they are also increasing their costs for homeowners’ insurance.
Some experts have even predicted that this climate shift will make homeowners’ insurance unaffordable for many U.S. residents. Not only this, but it will also affect the real state. Home insurance providers tend to increase premiums for properties with higher risks of damage. The additional insurance costs can lead to a reduction in sale prices for such properties.
According to the author of the book“Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses,” Donna Childs,
“As insurance rates rise commensurate with increasing risk related to weather hazards and property taxes rise to cover the costs of climate mitigation and adaptation, real estate values for properties in vulnerable areas will fall.”
Climate Change Is a Major Concern for Insurers
According to experts, climate change will result in higher costs for homeowners’ insurance policies. This is because insurance companies base their costs on the risks associated with the property. The higher the risk, the more premium will be charged. This won’t just increase the insurance costs, it will also make insurance companies more particular about who they give coverage to. According to news published on October 26, 2019, insurance companies are pulling back their coverage from risky wildfire areas and thousands of homeowners are suffering from it.
Wildfires Are Becoming More Common
According to the Center for Climate and Energy Solutions, climate change is leading to early snowmelts, which result in higher temperatures, drier weather and more incidents of wildfires in the summer season. As forecasted by the U.S. Department of Forest Service, on average, 1°C increase in temperature annually will increase the wildfire damage up to 600% in some forests.
According to the National Interagency Fire Center, 58,083 incidents of wildfire occurred in the United States in the year 2018, and nearly 8.8 million acres of land came down to ashes.
Homeowners insurance companies provide coverage for wildfire damage. However, they may exclude it if your home is located in an area that is prone to frequent wildfires. It’s important to read the exclusion section before you invest in an insurance policy for your home.
What You Can Do About It
While an increase in wildfire, floods, tornadoes, and hurricanes due to climate change have resulted in major changes in homeowners’ insurance policies, it’s not entirely impossible to combat the situation. Here’s what you need to do before you purchase an insurance policy;
- Find out what’s covered and what’s not covered.
- Communicate your additional coverage needs and see if they agree to them or not.
- Check the materials being used to build your new home. It will allow you to take some precautionary measures to protect your home in case of a natural disaster. This could lead to lower premiums and insurance cost for your home.
If you are looking for homeowners insurance in Bradenton, FL, get in touch with Manatee Insurance Services, Inc.! It offers reliable house and vehicle insurance in Bradenton, FL. Call at 941-747-7283 for an insurance quote for your boat.