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What Climate Change is Costing Homeowners

We reveal the ways in which the increase in natural disasters in the U.S. is financially affecting homeowners as we face the ongoing crisis of climate change.

According to CoreLogic’s Climate Change Catastrophe Report, over 14 million U.S. homes were impacted by natural disasters in 2021. This means almost one in 10 homes in the U.S. incurred damage from either hurricanes, winter storms, severe weather or wildfires.

Data from the National Centers for Environmental Information shows that the frequency of these natural disasters is on the rise as they reported that a total of 20 billion dollar disasters occurred in 2021 alone. The NCEI refer to billion dollar disasters being climate events “where overall damages/costs reached or exceeded $1 billion”, which brought overall damage costs to $152.6 billion last year.

In this article we’ll explore what this increase in severe weather and climate events is costing homeowners, including property damage and home insurance costs, as well as a decline in home value. While natural disasters may be caused by a variety of different factors, their frequency and intensity are likely due to a crisis we have been facing for decades: Climate change.


An Increasing Number of Billion Dollar Disasters


A bar chart highlighting the increase in billion dollar disasters from 1981 to 2021.

In the above graph we can see the steady increase of billion dollar disasters occuring in 5 year periods from 1981 to 2021. It shows that the number of billion dollar disasters reached a total of 104 between 2016 and 2021, as opposed to just 21 disasters between 1981 and 1986. Although this data only shows the climate events which had the greatest economic impact, it’s a good indication as to the increase of natural disasters over the past 40 years.

The rise in billion dollar disasters has not gone unnoticed in recent years, with an increase of 68.2% in combined costs over the past decade alone. Natural disasters can have a huge impact on homeowners’ lives, and with climate change being an ongoing crisis, these climate events are likely to continue to increase in both frequency and severity. So what does this mean for homeowners?


Huge Cost Impact on Properties From Disasters in 2021


A voronoi diagram of the total property damage costs caused by natural disasters in 2021.

According to CoreLogic’s Climate Change Catastrophe Report, a total of $56.92 Billion of property damage costs were incurred due to natural disasters in 2021. The above chart breaks down these costs by type of major climate event. CoreLogic’s figures represent the estimated cost of reconstruction for single and multi-family buildings impacted by natural disasters in 2021.

This data shows that hurricanes were the most costly climate event at $33 billion, accounting for 58% of the total property damage costs in 2021. Winter storms and severe weather were also one of the most expensive natural disasters, costing $15 billion and $7.46 billion respectively. On the other hand, wildfires caused the least amount of damage, costing $1.46 billion and accounting for just 2.6% of the total costs in 2021.

The damage caused by the intensity of these natural disasters means that homeowners across the country are facing costly repairs.

Cost of the Most Common Projects After a Disaster

Most homeowners report several different types of damage caused by natural disasters. Below are the most commonly reported types of damage, and the average cost of repairs.

Water Damage

Water damage can occur during many different natural disasters. Hurricanes and heavy rainfall can bring flooding, and some degree of water damage may also occur after wildfires, if water was used to combat the flames. The average cost to repair mild to moderate water damage is $1,200 to $5,000. Insurance can pay for water damage in some instances, but unless you have flood insurance, flooding is often not covered under most plans.

Roof Replacement

Roof replacements are very common as many different types of natural disasters can damage your roof beyond repair. The cost to replace a damaged roof averages $9,500 to $20,000 depending on size, scope, and material. Many insurance companies do pay for roof replacement after a storm, but keep in mind that if your roof has been damaged by storms in the past, your insurance agent may not cover repeat damage unless you have taken steps to mitigate it, such as using hail or wind resistant shingles.

Foundation Repair

Foundation repair can be an overlooked issue after major climate events. But wildfires, severe storms, hurricanes and flooding can all do significant damage to your home’s foundation. The average cost to repair your foundation is $5,000 to $10,000. Because most foundations are damaged by water, your repair may not be covered unless you have flood insurance.

Siding Repair

Another area of the home that is likely to be damaged during a storm is the siding. Siding repairs can run from $100 to $1,700, depending on the type of siding and the damage it has sustained. Most types of siding damage will be covered by insurance. However, if you live in an area that is prone to certain types of disasters, you may want to upgrade to siding types that can withstand these issues, such as fiber cement and steel.

Flooring Repair

If water has infiltrated your home during a storm, you are likely going to need some flooring repairs. The average cost of flooring repair can run between $1,500 and $8,000. Because most flooring repairs are needed due to flood, this is not often covered by insurance unless you specifically purchased flood insurance.

Not only are natural disasters costing thousands of dollars in repairs, but homeowners are now facing the added cost of increased home insurance premiums.


Increased Home Insurance Costs


The NCEI’s data shows that the state of Texas saw the most billion dollar disasters in the country in 2021. According to Policygenius, Texas also saw one the highest increases in home insurance costs in 2022, with an increase of 16% over the course of just 12 months. This could mean that insurance companies are raising their premiums as the climate situation in the U.S worsens, and more homes are at risk of property damage due to natural disasters.

Although the increasing cost of home insurance could be due to several factors, such as high inflation and construction costs, the current frequency of natural disasters in the U.S. is an increasingly likely cause of these rising premium costs.

Climate change is not only becoming a financial burden for homeowners, but the increasing number of major climate events could also mean a decrease in home values in the long run.


Increasing Number of Disasters Threatens Home Values


As natural disasters become more prominent, home buyers are paying more attention to whether or not a property is in a high risk area. In a survey conducted by Redfin, almost 80% of respondents said they would be hesitant to buy a home in an area with increased flood risk frequency or intensity of natural disasters. It was also found that around 75% of respondents would be hesitant to buy a home in an area “with extreme temperatures and/or rising sea levels.”

What’s more, the Center for Climate and Energy Solutions stated that “frequent tidal flooding caused by sea level rise has resulted in a $15.9 billion dollar loss in home value appreciation in just the past 12 years.”

As the frequency of natural disasters is on the rise, homeowners could face declining home values which are only set to get worse as the severity of these climate events increases. This loss in value is yet another cost for homeowners to take into account on top of costly repairs and insurance premiums in the face of climate change.

Homeowners vs Climate Change: What Can Be Done?

Unfortunately, there is little to be done in terms of reversing the effects of climate change at this point. However, taking the right measures to limit greenhouse gas emissions could reduce the increasing effects of this crisis as we learn to live with a changing climate.

According to the UN Environment Programme’s latest Emissions Gap Report, the recent Inflation Reduction Act is set to reduce greenhouse gas emissions by 1 Gigatonne by making major investments in clean energy technologies such as solar and other energy-efficient upgrades for U.S. homes.

So not only is solar energy becoming more accessible for homeowners, but those installing solar panels between 2022 and 2032 are now eligible for a 30% tax credit. This is just one of the few steps homeowners can take to reduce their carbon footprint at home, and contribute to the fight against climate change for a more secure and sustainable future.

About the Author

Charlotte Granville

Charlotte is a researcher and author at Fixr.com. With a Bachelor’s degree in Visual Communications, she analyses industry data to provide homeowners with the best advice and visual representations of the home improvement sector. She is passionate about promoting sustainability within the home, and with a personal interest in interior design, she is always up to date about the latest home remodeling trends.

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