Extreme weather is driving up homeowners' insurance rates and making it more likely people will become delinquent on their mortgages.
What's happening?
A new study links a $500 rise in annual insurance premiums to a 20% increase in mortgage delinquency rate, according to a report by Floodlight via Mother Jones.
Since the rising global temperature is causing extreme weather events such as wildfires and floods to happen more frequently and become more severe, insurance companies are pulling out of areas around the United States and otherwise raising rates. Floodlight detailed examples, and it reported 30% of losses from natural disasters in 2023 went uninsured.
"The research adds to a growing body of scientific literature proving that the climate crisis is also a housing crisis," the outlet stated.
Why is this important?
Floodlight said part of the problem is reinsurers, who cover insurance companies and raised rates around the world by 37% last year. Homeowners are left to foot the bill.
"The insurance industry will leverage climate change into pricing strength," industry analyst Cathy Seifert said.
This "further constricts an already tight supply of housing," according to Floodlight. "Researchers have also found that higher insurance rates affect the availability of affordable housing. It turns out, housing markets might be more sensitive to premium spikes than many thought."
This isn't the first direct consequence of the changing climate for many people across the United States, but taxpayers could pay for delinquencies "because more than two-thirds of mortgages are backed by the federal government."
"I think it is going to get a lot worse," land use attorney Wayne Pathman said.
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What's being done about the nationwide insurance crisis?
Though Floodlight highlighted Florida, Louisiana, Texas, and California as disaster-prone areas, this problem affects people everywhere. Nevadans and Iowans are among those who have been unable to find or afford insurance.
What we can do is focus on the things we can control: lowering pollution to slow the rapid warming of the climate that is driving extreme weather and subsequent insurance issues.
Start by ditching plastic water bottles for a reusable one, walking and biking instead of driving, and shopping secondhand. These small steps will also save you money, and then you can move on to bigger, more impactful changes.
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