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Insured losses for Hurricane Helene are now estimated at over $6 billion, with the uninsured losses surpassing that amount. The majority of homes affected by the storm, particularly in North Carolina, were not covered by flood insurance.
To address this issue for the future, new risk-assessment technology has been developed. In North Carolina, most homeowners do not have flood insurance because they are not located in FEMA-designated flood zones. However, a climate risk firm called First Street, which considers the impact of climate change, indicates that nearly 12% of homes in the state are at risk of flooding, compared to just 4% in FEMA flood zones.
First Street recently introduced a suite of climate risk data for every property listed for sale on Zillow. This data aims to provide buyers and sellers with property-specific climate information to make informed decisions. The tool also helps real estate agents advise their clients on climate risk, insurance, and long-term affordability.
Each Zillow listing now includes First Street risk scores for flood, fire, wind, air, and heat, as well as projections for these risks 15 and 30 years into the future. The data also offers recommendations on flood insurance and links to estimate insurance costs.
A survey by Zillow revealed that over 80% of homebuyers now consider climate risk when purchasing a property, with flood risk being their top concern, followed by fire risk. Recent data shows that a higher percentage of homes listed for sale are at major climate risk compared to five years ago, with an increase in wildfire and flooding risks.
As consumers increasingly factor in climate risks when buying homes, the impact on property values is expected to grow. The cost of insurance is already influencing home prices, and as insurance costs rise, particularly in high-risk areas, property values may decrease.
The inclusion of risk scores that quantify potential hazards in real estate may have a direct impact on property values. This impact could be influenced by the amount of insurance required to protect homes in at-risk areas.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.
