How Climate Change Is Increasing Rates

A growing number of policymakers, advocates and experts predict that extreme weather may lead to higher costs for home and flood insurance.

Some analysts are even predicting that the effects of climate change may make home insurance and flood insurance unaffordable for many Americans.

Home insurance companies charge higher premiums to cover property associated with higher risks. Added insurance costs could lead to lower home prices.

“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,” predicts Donna Childs, author of the book “Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses.”

“The insurance premiums and property taxes for these properties become higher,” Childs said.