Climate Change and its Effects on Insurance

Recent years have brought devastating surprises in the form of hurricanes, wildfires, a pandemic, and more. Almost every industry has been affected and insurance hasn’t been spared either. Rising temperatures and increasingly volatile weather patterns have become common. Climate is changing, all over the world. 

2018 was California’s worst year with wildfires that cost the state and insurers $400 billion. 2019 was relatively uneventful and then 2020 hit hard with nearly 10,000 homes and 4.5 acres of land burned to the ground. The 2020 Australian wildfires killed over a billion animals and was responsible for damages worth over $4 billion dollars. With rising temperatures, the oceans are boiling and have led to more hurricanes than ever. NASA warns that there are 21 percent more storms for every 1.8 degrees Fahrenheit (1 degree Celsius) increase in ocean surface temperatures. Melting glaciers and ice sheets are causing sea levels to rise, posing a severe threat to coastal properties.

Climate change related disasters are almost always severe and leave a trail of destruction which homeowners insurance companies have to grapple with. bubble Insurance companies are taking steps to come to terms with the consequences of this phenomenon by helping homeowners prevent damages like having them install sprinklers, leak detectors, and so on. When homeowners take basic care of their homes by installing tech-enabled water detecting devices, it mitigates the risk of water damage. Installing moisture sensors can help detect potential pipe bursts before they wreak havoc. These measures are small but effective ways of keeping homes and homeowners safer during the new normal that is climate change.

Homeowners are encouraged to take preventative and defensive measures to minimize the chances of property damage so they don’t have to make a claim in the first place.


If your home is in a flood prone area or if you’re building a home there, you can raise the structure on stilts to prevent or minimize floods affecting your home. Make sure your gutter runoff is pointed away from your home so water doesn’t pool in the corners. Install valves on pipes to prevent backed up flood sewage coming into your home.


According to the NFPA, most homes suffer damage from wildfires because of embers and small flames. If you live in a wildfire zone, it’s important to use Class A roofing material to minimize the effects of wildfires. Fire resistant materials like metal, asphalt shingles, concrete tiles, clay tiles, and such are great for roofs. Clear dead vegetation away from close proximity to your home. It’s also great to have the whole neighborhood be a part of a fire protection system. A neighborhood is safe only when all homes work together.


In the long run, climate change can be reduced by making small changes in our home. For instance, it takes a lot of heat and energy to treat the water we use. Water leakage detecting sensors are important in preventing water damage, the latter being one of the most common claims. If one in 100 homes use water efficient fixtures we can help avoid 80,000 tons of global warming pollution.


Heating and cooling appliances use a lot of energy. Ensure all windows, attic and draft-prone areas in your home are sealed and properly insulated. Make it a point to use only energy efficient appliances. Look for the energy star label on refrigerators, air conditioners, and other appliances.


Green patches like landscapes, lawns, green walls, and roofs help cool the home significantly and even reduce flood risk since they are equipped to absorb water. A driveway with gravel is far better than a concrete one to help with water absorption. And don’t forget to keep your trees and bushes trimmed so there are no stray branches falling off and damaging your roof and home.


With hurricanes, storms, and excessive rains becoming more frequent, your roof will take the biggest hit. Using aluminium gutters will prevent water from clogging your roof that would otherwise lead to severe water damage. Be sure to check the shingles in your roof–any gaps or damage can give way to strong winds. Reduce the rooflines so as to discourage buildup of debris and embers. Non-combustible or low-combustible materials to build your roof will be beneficial in the long run to protect your home from fires. If you’re in a storm or hurricane prone area, roof strapping is a must. Straps are made of stainless or galvanised steel designed to protect your roof from undesirable weather conditions.

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Pallavi Shastry
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