Extreme weather could cause insurance rates across North Carolina to spike
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Nearly 13% of properties in the Raleigh metro could be facing higher insurance premiums or policy non-renewals due to the risk of high winds and flooding.
- Just east of Raleigh, however, a much larger percentage of homes are at risk.
Driving the news: Insurers are changing how they factor climate and extreme weather risks into premiums. Others are suspending coverage altogether.
By the numbers: Nearly 24 million U.S. properties may face higher premiums because of the risk of potential wind damage, about 12 million because of the risk of flooding, and about 4.4 million due to wildfire risk.
What's happening: When it comes to wildfire and wind damage, some private insurers are dropping policyholders as the risk of those threats grows, says Jeremy Porter, First Street's head of climate implications research.
Meanwhile, FEMA recently updated its flood insurance pricing model for the first time since the 1970s, leading to higher premiums that are more reflective of today's flooding risks, Porter says.
- The intrigue: 8 million households are in FEMA flood zones, but only 4.7 million have active flood insurance policies.
Of note: Climate and extreme weather risks — and the associated financial costs — are starting to influence where people choose to live, Porter says, but only to a slight degree.
Zoom in: Close to 30% of homes across North Carolina are at risk of rate hikes or non-renewals.
- That number is 97% in Wilmington because of wind or flooding, though more properties could see rate increases due to wind.
- In Fayetteville, more than 51% of properties could see higher insurance premiums or policy non-renewals because of wind, wildfires, flooding or all three.
- Of North Carolina areas mentioned in the report, Jacksonville has the highest number of homes that could see non-renewals or rate hikes, at 99.9%, most due to wind risk.