New Year, New Climate: Time to Reassess Your Homeowner’s Coverage?

As climate change worsens, severe weather events are on the rise. Depending on when you bought your home, your weather-related risk exposures may have changed.

The new year is a great opportunity to reassess your risk exposure to determine whether you should update your homeowner’s insurance coverage. The right kind of coverage can help provide adequate protection in case of severe weather.

Here, we’ll look at three worsening weather events – flooding, wildfires, and hurricanes – and outline the steps you can take to mitigate damage.

Worse Flooding Requires Specialty Flood Insurance

Years ago, conventional wisdom held that flood insurance mattered most for people in floodplains or coastal areas. But climate change has caused a shift. Now, FEMA’s official stance on flooding is “Anywhere it can rain, it can flood.”

That change makes sense when looking at current flooding patterns. According to the EPA, floods are growing larger in the Midwest and Northeast. The Northeast is also flooding more frequently – and so are the Pacific Northwest and northern Great Plains.

Another effect of climate change: the cost of flood damage is rising as precipitation levels reach historic highs.

Flooding can happen anywhere, so flood insurance is important to protect your home and valuables. Note, however, that flood insurance is a specialty, standalone coverage – standard homeowner’s insurance policies don’t cover flood damage.

Here’s how to secure a flood insurance policy:

1. Identify your flood risk using not-for-profit tools like Flood Factor – official flood maps are often outdated.
2. Check to see whether your expected premiums might have changed based on FEMA’s Risk Rating 2.0 rollout.
3. Talk with an agent about your flood insurance needs.
4. Make sure your policy has adequate coverage limits with a deductible you can afford – and revisit your limits and deductible if you already have flood insurance.

As Wildfires Spread, Consider Wildfire-specific Coverage

Climate change has caused wildfires to burn land in historic amounts. There’s been a sharp increase in wildfires in the Southwest, and in the West, more acres are burning every month.

Wildfire season isn’t what it used to be, either. While August was once the worst month for wildfires, the season is now peaking in July.

With wildfires more destructive than ever, they’re also becoming more costly: 2020 was the third most expensive wildfire season on record, with $16.5 billion in losses.

If you live in an at-risk state, it’s important to know that standard homeowner’s insurance doesn’t typically cover wildfire damage. That means you’ll likely need specialty coverage.

Wondering how to gauge your wildfire coverage needs? Follow these steps:

1. Identify your wildfire risk using the US Forest Service’s interactive tool or a state-specific solution.
2. Talk with an agent about your wildfire insurance needs.
3. Confirm that your policy’s coverage limits are adequate and its deductibles are affordable – and revisit these if you already have wildfire insurance.

With Intensifying Hurricanes, Check Your Wind Coverage

Hurricanes thrive on warm water. And as rising global temperatures warm the ocean, hurricanes are growing more intense. They’re developing stronger winds and growing more quickly. They’re also causing heavier rainfall – which means stronger storm surges.

You might have noticed that hurricanes are affecting areas further inland than normal. That’s because hurricanes are also covering more area. Over time, they may reach higher latitudes in the United States than just the Gulf Coast.

Like other natural disasters, hurricane damage is growing more expensive, but the costs are becoming more concentrated. The top five most expensive hurricanes have all occurred since 2005. Hurricane Ida, the seventh-costliest hurricane since 2000, cost $95 billion in 2021. And by 2075, the Congressional Budget Office expects the annual cost of hurricane damage to jump from $27 billion to $39 billion.

Hurricane damage comes from both wind and water. If you have homeowner’s insurance, your policy will likely cover the cost of wind damage, but it may omit wind insurance if you live in an at-risk state. And if there’s a risk of water damage due to storm surges or heavy rains, you may need flood insurance.

Consider getting specialty coverage to mitigate your risk – just one inch of water can cost $25,000 in damage. Here’s how you can get that coverage:

1. Check whether you’re in an at-risk area for hurricane damage.
2. Confirm what kind of wind damage your homeowner's policy covers.
3. Determine your home’s flood risk.
4. Talk with an agent about your wind and flood insurance needs.
5. See if your policies have adequate coverage limits and affordable deductibles, or revisit these if you already have wind and flood insurance.

Mitigate the Risk of Severe Weather Damage with Adequate Insurance

Severe weather events are intensifying, and they’ll continue to get worse before they get better. But homeowners can prepare their homes for weather damage – and insurance is a key part of disaster preparedness. When damage happens, the right insurance policy can help you recover as quickly as possible.

With several carriers to choose from, WE can help you find a policy that works for you. Interested? Speak to one of our agents today.