{"id":9329,"date":"2021-05-29T13:13:33","date_gmt":"2021-05-29T20:13:33","guid":{"rendered":"https:\/\/www.movoto.com\/blog\/?p=9329"},"modified":"2021-05-29T13:13:33","modified_gmt":"2021-05-29T20:13:33","slug":"no-one-wins-with-climate-change-rising-temperatures-rising-premiums","status":"publish","type":"post","link":"https:\/\/www.movoto.com\/blog\/no-one-wins-with-climate-change-rising-temperatures-rising-premiums\/","title":{"rendered":"No one wins with climate change: rising temperatures, rising premiums"},"content":{"rendered":"

<\/a><\/p>\n

Click your state for more information on how climate change affects home values.<\/h3>\n

Here at Movoto Real Estate<\/a>, we\u2019ve all been astonished by the havoc of Superstorm Sandy<\/a>–at least one of the reports pins damage estimates between $30 and $50 billion. Cue the once-again heated chatter about global climate change.
\nSure, there are still many who have yet to be swayed by the myths of climate change<\/a>. But whether you believe it or not, the Earth\u2019s climate is indeed changing unusually fast. Unfortunately such changes are affecting us in more and more ways–even the price we pay for our homes.
\nThe Movoto bloggers spent a week crunching numbers and found that a temperature rise of one-fourth of a degree Fahrenheit leads to a one percent increase in insurance premiums that year. It may not seem like much, but these price hikes are what experts would call a negative externality.<\/p>\n

The Proof is in the Atmosphere<\/h2>\n

In economics the theory known as negative externality<\/a> says that use of a specific product by consumers has an unintended consequence for a third party.
\nOne well-known example of this is global climate change: As greenhouse gas emissions increase from burned coal, gas, and oil, they adversely affect the climate of the Earth, and thus all the people living on it.
\nThe same then can be said of the upward trend of insurance premiums. It functions as a negative cost of gas emissions, because homeowners (the third party) are forced to compensate for the subsequent rise in weather-related damages.<\/p>\n

Why Climate Change Affects You, the Homeowner<\/h2>\n

\"\"
\nThe spike in weather-related damages means more insurance claims, causing the insurance industry to cough up more dough than ever before to divvy up among homeowners with ruined properties.
\nOf course, because insurance companies are spending more, they need to make more to cover growing expenses. Here\u2019s where you, the homeowner, come in.
\nConsider your own premiums for home insurance (assuming you find it worthwhile to protect the investment you\u2019ve poured hundreds of thousands of dollars into). Odds are, your rates have gone up considerably in the past few years alone.
\nToday the national average for homeowner insurance premiums is $1,004<\/a>. That\u2019s a 5 percent increase since 2011, and 22 percent higher than premiums in 2007. While the cost of natural disasters isn\u2019t entirely to blame for the larger numbers, many are arguing<\/a> it is a key culprit.
\nIntrigued, we did our own research to see just how directly climate change is impacting the cost of premiums for Americans.<\/p>\n

Climate v. Premiums: Stateside<\/h2>\n

\"\"<\/a>
\nTo find the correlation between changes in temperature and insurance premiums, we had to do some digging.
\nFirst, we looked up homeowner insurance premium rates by state, using HomeInsurance.com<\/a> for today\u2019s prices and a survey by the Insurance Information Institute<\/a> to compare rates in 2009.
\nWe used the National Climate Data Center<\/a> to find the average yearly temperatures for each state, from 2009 to 2012 (for 2012, we used available data from January through October).
\nWe also gathered data on the projected temperature increases<\/a> by the end of this century. The smaller numbers are based on a lower emissions scenario, while the larger ones take into consideration higher emissions for the century.
\nMost regions show a projected increase average of around 5\u00b0 Fahrenheit by 2090:<\/p>\n