Newsletter

Homeowners insurance and climate change

Abstract: Over the past 25 years, the U.S. has experienced a sharp increase in climate-related disasters totaling billions of dollars in damages. For those whose homes are destroyed, the financial impact can be devastating. Fortunately, many have some of their losses covered by homeowners insurance. In 2017—a particularly costly year in terms of weather-related damages— insurers reported around $68 billion in losses from homeowners insurance claims. Still, with the number and intensity of climate-related disasters on the rise, it is important for us to understand the degree to which homes are underinsured, either through having no coverage or not enough coverage.

Keywords: household analysis; housing supply and markets; insurance;

JEL Classification: G52; R2; R31;

Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Chicago Fed Letter

Publication Date: 2021-09-08

Issue: 460

Pages: 6