Wildfire risk could make home insurance more expensive in Arizona
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More than 15% of Maricopa County properties are at risk of higher insurance prices or canceled policies because of wildfire risk, per climate risk firm First Street.
Why it matters: As climate change fuels increased natural disaster risk, homeowner's insurance rates nationwide could become unaffordable, potentially resulting in foreclosures of properties that aren't paid off.
- And if insurers decide to pull back altogether, states may need to step in to take on the risk — which can cost individuals more and offer less coverage.
Zoom out: Price hikes and policy cancellations due to climate hazards are even more likely in forested areas in northern and southern Arizona, per First Street's analysis.
Between the lines: Jeremy Porter, head of climate implications research for First Street, told us it's important to look at climate risks over time to anticipate how insurance prices could increase monthly housing costs in the future.
- "It becomes like a variable rate mortgage that only goes up. It won't go back down," Porter said.
What we're watching: Insurance prices are based on pooled risk — meaning everyone's rates go up when more people have to file claims, Matthew Baker of Gilbert-based Strong Tower Insurance Group told Axios last year.
- Between last year's hurricanes and this year's wildfires, home insurance premiums nationwide are likely to increase regardless of an individual property's natural disaster risk.