How to Lower Home Insurance Rates When Climate Change Increases Costs
The weather is causing so much damage home insurance companies are struggling to keep up. To demonstrate, the wildfires in California caused more than $250 billion in damages.
It’s created a situation where some insurance companies like State Farm had to drop coverage in more risk prone areas of Los Angeles.
And according to insurance expert Günther Thallinger, a board member with Allianz SE, this is a preview of coming attractions. “We are fast approaching temperature levels – 1.5C, 2C, 3C – where insurers will no longer be able to offer coverage for many of these risks,” he told The Guardian.
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This would have an effect on other financial sectors as well. “This applies not only to housing, but to infrastructure, transportation, agriculture, and industry,” he remarked.
The good news is solutions are available that can slow climate change’s speed, like zero-emission options. The bad news is it’s slow to adoption in some countries, and in others, it’s not an on the table consideration.
How the U.S. fails to address climate change threats
Since taking office, president Donald Trump has worked to undo many of the efforts his predecessors set up to combat climate change while calling it “a hoax.” He withdrew the U.S. from the Paris Agreement, which is an international treaty, where countries pledge to work together to limit climate warming to less than 2 degrees Celsius.
On top of this, members of his cabinet are dismantling other agencies that aid in assisting those impacted by climate change.
Homeland Security Secretary Kristi Noem said she supports the dismantling or severe reduction of the Federal Emergency Management Agency (FEMA). While the dismantling hasn’t happen yet, the new administration changed the way it works.
Recently FEMA announced the discontinuation of Building Resilient Infrastructure and Communities program, which was responsible for helping communities prepare for climate change events like flooding and wildfires. The program ended due to efforts to remove “fraud, waste and abuse.”
So if you feel like you’re on your own with all of this, you would be accurate. However, there are still some things you can do to lower costs and protect your home.
(Image credit: Getty Images)
How to save when home insurance rates rise
The average cost of home insurance on a $300,000 dwelling is $2,267 annually, according to Bankrate.
That said, your costs can vary based on a variety of factors, such as the age of your home, its size, claims history, weather in your area and other variables will create a more accurate depiction of what you’ll pay for home insurance.
The easiest and most effective way to save when home insurance prices surge is to receive a fresh quote on your property.
Using this tool from Bankrate can show you an idea of what it takes to insure your property:
Last year, we received a policy renewal that was going to add a hundred dollars per month to our home insurance premium. We didn’t file any claims, but others in the area did due to hail damage.
Conducting a quick quote allowed us to save not only on our home insurance but our auto too. So it does pay to shop around for home insurance.
Improvements to make your home more climate-resistant
Doing some of the following improvements can help your home better withstand the rigors of inclement weather, and they might save you money on your homeowners insurance:
- Install a metal roof: If you have an older roof, you’re probably paying a little more for home insurance. By replacing it with a metal roof, you shelter your home from hail and winter weather and you might earn a discount from it.
- Add storm shutters: Storm shutters can protect your windows from hail damage, and in some instances, it could earn you a small discount on your insurance.
- Install a security system: Security systems can lower your home insurance because it can prevent crimes of opportunity from happening. What’s more, some home security systems come with excellent detection tools like fire and water sensors, which can alert you to problems quicker.
Make sure to notify your insurance carrier of any home improvements you do so they can reflect this in your premiums.
In the case of metal roofs, it might not lower your insurance costs, but it will lower the costs incurred by storm damages.
Metal roofs also last 40-70 years on average, meaning your replacement costs would be minimal for the life of ownership.
The bottom line
The damage wrought by climate change creates a situation where some locations are too risky for insurance companies, and in other areas, it’s raising rates for many homeowners.
One of the best ways to lower rates is to shop around before your policy renews. Doing so can save you hundreds of dollars annually. Also, by making some improvements to your home, you can help it become more climate-resistant while lowering home insurance costs.
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