Insurance prices skyrocket in disaster-prone states
The cost of insuring a home in the U.S. has surged nearly 20 percent since 2021 as insurers raise prices to hedge against mounting climate risk and other economic factors, new data shows.
It could get worse. Homeowners across the country are expected to on average see a 6 percent spike in insurance rates in 2024, with the most disaster-prone states poised for double-digit increases. Property insurance in Louisiana, for instance, could soar by 23 percent.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”