Guest essay by Linnea Lueken Originally published on Climate Realism
Yahoo News reposted an article from Realtor.Com titled “Would You Drop Insurance To Stay Put in Your Neighborhood? Most Owners Say Yes,” claims that increasing “climate risk” is forcing people to go without insurance and insurers to pull out of high risk areas. This is only partially true, insurers are pulling out or increasing rates in some areas, and some people are foregoing insurance. But, what isn’t true is increased “climate risk” as the reason. Historical data clearly shows extreme weather is not becoming more intense or frequent.
Realtor.com has their own economic research analysts, one of them claimed that “climate-related events” are increasing. The article also makes a puzzling claim, that “[m]ore than $12.7 trillion worth of U.S. real estate now faces severe or extreme climate risk, according to a recent Realtor.com Housing and Climate Risk Report.” This statement implies that these conditions are new and/or worsening.
Looking at the report cited, the risks highlighted are flooding, hurricane wind damage, and wildfires. The problem for Realtor.com is that none of those weather conditions have increased over time.
Flooding damage is not getting worse. In fact the costs of flooding in the United States have actually declined as a proportion of the U.S. GDP. (See figure below)
Studies from the Journal of Hydrology and Hydrological Sciences Journal both found only low confidence in any global flood trends, if there are any trends at all.
Similarly, hurricanes are not getting worse, and especially not in the United States, which just went more than a decade from 2005-2017 without a single major hurricane making landfall, representing an all-time record hurricane drought.
The amount of acreage burned by wildfires globally has declined, for example as illustrated in Increase in U.S. Wildfires Due to Climate Change. In the United States the earlier parts of the 20th century saw more widespread fires, and recent upticks in wildfires correspond more strongly to forest management than any increase in fire weather itself.
All available wildfire acreage burned by year in the United States, 1926 to 2019. Data from NIFC prior to disappearance in 2021.Graph by Anthony Watts
So what is causing an increase in the amount of property value at risk from these weather events?
The answer is rising property value and new construction in previously unsettled hurricane and fire prone areas.
This argument from Realtor.com is not new. Climate Realism has covered this dozens of times, including here, here, and here as examples. It is a favorite talking point that always has the same errors built in.
What is interesting in the Realtor.com piece is that they admit this in a roundabout way by saying that “insurers hope to drive broader risk mitigation: tougher building codes, retreat from fire zones and flood plains, and fewer new builds in disaster-prone regions.” They also say that “[o]nly 30% of buyers have researched natural hazard data for a home they’ve purchased or considered.”
If people are not doing their due diligence in buying homes in disaster-prone areas, that is not an indication of extreme weather getting worse, it is an indication that more people are placing themselves in risk prone areas.
As my colleague Anthony Watts said in a previous Climate Realism post on this subject, “scapegoating non-existent “climate risk” allows adjusters, insurers, and lenders justify higher premiums, interest rates, and stricter credit standards while diverting attention from the actual causes of rising mortgage costs and insurance rates and claims.” The truth is that overbuilding in coastal areas especially but also fire prone regions is leading to more costly damage when the storms do come, despite the fact that they are not increasing in frequency or severity.
On the fire issue, however, there is something of a human-caused aspect, because as more people live in fire prone areas, they increase the likelihood that a wildfire will be sparked, as humans account for the vast majority (up to 90 percent) of wildfires by not controlling campfires and grills, arson, fireworks, negligently disposing of cigarette butts, and other accidental ignitions. But this, again, does not mean that “climate hazards” are increasing and forcing insurance higher.
If Realtor.com and Yahoo wanted to be fully transparent and honest, they would honestly look at measured data and not just projections by activists when it comes to “climate hazards.” Data does not show that these conditions are becoming more frequent, and so they are not increasingly responsible for higher insurance rates and insurance companies abandoning regions.
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Some insurance companies try to take advantage of flapping about climate change to increase rates – Aaron of the Insurance Institute of Canada tried that game, a True Believer who would not listen to facts. A slippery bunch.
Certainly loses have increased sometimes because people built in unwise locations – a factor in Hurricane Helene, or did not control water – voters there rejected dams like the TVA’s, Abbotsford BC BC did not maintain dikes despite a warning two decades earlier from the same river that spilled over its banks again in 2021.
Advocates like to point out that insurance losses are increasing at rates higher than the rate of inflation which is “proof” that climate change is causing higher damages. That insurance losses are rising faster than the rate of inflation – that part is absolutely true.
However the advocates omit
A – a large part of the losses are due to increase in population ( approximate 50%-75% of the increase is due to population increase
B – Also omitted in the typical gulf coast home in the 1950’s to 1960’s was 1000-1200 square feet, Homes built since the 1990’s are 2000-3500 square feet with much nicer finish out. Adjusting for inflation, the cost of home is 2x -3x the cost of the homes from the 1950’s/60’s.
Thus the insurance losses should be 2-3x increase adjusted for inflation compared the insurance losses from the 1950’s-1970’s
What’s also up are p/c insurance company profits … up 90% from 2023 to 2024 and up 333% from 2022 to 2024.
Profits are up from a really bad year. How evil of them.
I live on the central Texas coast near where Harvey landed. FEMA consultant did a good, but a little incomplete report pointing out the obvious construction problems. They missed solar panels as I recall. There are at least three reasons why insurance is increasing. Some companies will not insure the coast and the state wind insurance plan requires statewide subsidy, increasing building with some susceptible continues, and government policies have allowed, even encouraged, increased property values along with population and industry in an area with a historically inadequate water supply. Corpus Christi area has a political problem with a decent months long drought with tropical storms not cooperating.
Pushed by the severe 1950s drought there was a Texas water plan some 6 decades ago apparently now lost to government and developer history. A similar problem is with property taxes, not the worst but enough to be a problem discriminating against home ownership. The storm barely missed the visible on Google Earth windmills, sooner or later one will hit.
Love the “climate related” tag. Pretty much covers everything since “climate” is in the background of everything on the planet. Seems that in order to gain entry to the climate temple magic words must be uttered.
As more and more people build on flood plains… flooding becomes more of a problem..
As more and more people build in, or close to, fire-prone bushland… fire becomes more of a problem.
My car insurance just went DOWN! Work that one out…
All of this is due to the climate in which we live.
In this case climate is political, not averaged weather.
In this case, humans can cause climate change, a betterment of the political environment.