Miami Beach, Florida, laptop screen showing Radar of Hurricane Ian, category 4 storm, eye and feeder … [+] bands in Gulf of Mexico approaching landfall. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images)
Jeffrey Greenberg/Universal Images Group via Getty Images
When you’re on the brink of one of life’s biggest milestones—buying a home—it’s natural to focus on the excitement of the moment. The backyard barbecues, family dinners, and memories you’ll make. But just like couples at the altar don’t want to think about the possibility of divorce, homebuyers, and renters often resist thinking about catastrophic natural disasters when committing to purchase a home. However, in the era of climate change, failing to research climate risks, insurance coverage, and insurance costs is like getting married without learning about your partner’s finances or goals in life.
Climate disasters—floods, fires, hurricanes—are outside of any one individual’s control. However, homebuyers can control how prepared they are with information.
Natural Disasters: The Uncomfortable Truth We Can’t Ignore
No one likes thinking about worst-case scenarios. After all, who wants to imagine their future home submerged in floodwaters or threatened by wildfires? Yet the risks are real, and they’re growing.
As climate change drives up the frequency and severity of natural disasters, homeowners face significant financial and emotional stakes. Financially, homebuyers must grapple with how a changing climate makes homes more costly to insure and maintain. Both insurance costs and maintenance costs are increasing faster than the overall inflation rate. Consumer prices increased 3% in 2023. Meanwhile, average home insurance rates increased 10%, and home maintenance costs increased 8% in 2023. Climate change also makes it more expensive for communities and governments to maintain their infrastructure and properties, which results in higher property taxes. Emotionally, residents must endure disruptive evacuations and the loss of personal property that can carry sentimental value.
Facing The Facts: Ignorance Is No Longer Bliss
Just as a prenuptial agreement isn’t about planning for failure but preparing for the unforeseen, climate risk scores aren’t meant to scare buyers out of a home. They’re tools to ensure that if the worst happens, you’re ready.
In the past, homebuyers didn’t need to worry about how a changing climate might affect a home for sale. Without easy access to comprehensive data, homebuyers often assumed that “it won’t happen here.” For example, unless a buyer’s lender required FEMA flood insurance or the home sellers had disclosed damage, a homebuyer might not have thought to research the current or projected risk of flooding. In the past, that information might have been in the local library, but unless a homebuyer knew where to look and what to look for, knowledge about disaster risk was effectively inaccessible. But those days are long gone. The information is now available right on a home’s listing page on apps like Redfin. Just scroll down past property details. The climate scores are situated right above the Redfin estimate history.
Climate scores allow buyers to see what risks they face—flooding, wildfire, extreme heat, wind, or air quality. There’s no excuse not to look. Ignoring the information doesn’t make the risk go away. The data is easily accessible, and homebuyers owe it to themselves to take it seriously. Homebuyers are often eager to research neighborhood characteristics like access to shopping, school quality, or crime rates because these factors impact liveability, desirability, and safety, and the same logic should apply to researching climate risks.
For instance, flood risk scores can show buyers exactly how vulnerable a specific property is in flood-prone areas that are well known for their risks, like the Gulf Coast, and lesser-known but equally risky places, like Appalachia or Sacramento (surprisingly, Sacramento has a higher share of homes at risk of severe flooding than Houston.) Two homes on the same block can have widely different flood risk scores depending on their elevation or proximity to a waterway. Users who saw flood risk data on Redfin when it was first launched were significantly less likely to make offers on properties with high flood risks, showing that once the information is in front of you, it can guide better decisions.
How To Use Redfin’s Climate Risk Data
You don’t need to have advanced degrees in meteorology to do your homework on climate risks. Climate research companies like First Street have done the heavy lifting for you, distilling complex models down to property-level scores on a 1-10 scale. And via real estate portals like Redfin, homebuyers can find the scores for any home with just a few clicks.
Climate Risk Scores on Redfin Listing
Redfin
Flood Factor Climate Risk Score on Redfin Listing
Redfin
What should you do with this information? First, take it seriously. If a property has a high flood risk, consider whether you’re prepared for insurance costs, repairs, and possible evacuation. If wildfire risk is flagged, consider what mitigation strategies you’d need—like installing a metal, fire-resistant roof or an air filtration system to combat smoke.
Second, don’t just think short-term. Climate risks are projected to worsen over the coming decades. That beautiful house with a 30-year mortgage could face increased threats long before you’ve paid it off. And future homebuyers may be priced out or scared off as insurance costs rise alongside disasters that increase in frequency and intensity, impacting home values in the near term.
Ensure the home’s climate resilience is part of your overall affordability calculation. Whether you are a homeowner or a renter, make an evacuation plan that includes money for travel and lodging. Homeowners need to budget for ongoing costs like rising home insurance premiums and emergency costs like insurance deductibles and uncovered repairs. Renters need not worry about damage to their house or apartment, but would be responsible for insuring their own personal property. And although renters have the flexibility to move when their lease is up, that flexibility isn’t free. Moving is expensive.
Finally, be proactive. If the property you’re eyeing has high climate risks, ask about mitigation measures already in place or what you can do to better protect your home. Many homes can be fortified against climate risks, but this often requires additional investments in materials, landscaping, or structural changes. When comparing two homes that are priced similarly, consider the climate risks. The riskier home will likely cost more in the long run, making the less risky home relatively more valuable.
Preparation Is A Prerequisite For Peace Of Mind
Climate change is a planetary problem, but individuals must still educate themselves about their financial risks. Like any major life decision, being prepared is the key to peace of mind. Homebuyers and renters alike can make smarter, more informed decisions by researching climate risk scores. Think of it as the prenup for your home—an uncomfortable conversation today that could save you heartache (and a lot of money) tomorrow.
So, as you begin your search for a new place to live, remember to research, check the scores, and prepare accordingly. Your future self will thank you.