The danger from extreme weather is growing, and so are insurance costs. Here’s what to know.
Climate stress affects the cost of home insurance. The amount of money that households paid for insurance rose faster than inflation between 2014 and 2023, according to data compiled by Benjamin Keys, a professor of real estate at the University of Pennsylvania’s Wharton School, and Philip Mulder, a professor at the University of Wisconsin School of Business.
Rather than think in binary terms like risky or safe, prospective home buyers should get comfortable with idea of degrees, Dr. Keys said.
If you’re looking at a place facing an existential risk from sea-level rise, like the Florida Keys or the Outer Banks of North Carolina, “you need to go in really cleareyed,” Dr. Keys said. “These assets are not there for the long haul.”
As for other places, Dr. Keys offered this rule of thumb: Find out how much insurance costs now. Then, consider whether you could still afford your monthly costs if those insurance premiums doubled or tripled.
If the answer is no, then maybe don’t buy the house.
Photo by Susan Stava for the New York Times
