By comparison, North Carolina’s insurance market seems pretty good. No insurer has left the state since 2008, while homeowners pay an average of $2,100 a year, a high figure, but avoiding the very high rates of states like Florida, California and Texas.
“What has traditionally happened is that there is a rate increase every few years of 8 to 9 percent for home insurance,” Hornstein says. “This has kept the market stable, especially as it relates to the coast.”
But as natural disasters of all kinds increase, it’s hard to see a path forward for the insurance business to continue as usual. The NFIP is undergoing a series of changes to update the way it calculates flood insurance rates, but faces political minefields in potentially expanding the number of homeowners required to purchase policies. What’s more, many homeowners are seeing the Flood Insurance Prices Go Up as the NFIP adjusts its rates for existing floodplains using new climate models.
Many experts agree that the private market must somehow reflect the true cost of living in a disaster-prone area: in other words, ought It will be more expensive for people to move to a city where a storm is more likely to wipe their house off the map. The cost of climate change does not appear to be a deterrent in Florida, one of the fastest-growing states in the country, where coastal regions such as Panama City, Jacksonville and Port St. Lucie are booming. (Some investigation suggests that the mere existence of the NFIP protected policyholders from the true costs of living in flood-prone areas).
Asheville, in the heart of Buncombe County, was once hailed as a climate paradise safe from disasters; the city is now staggering after Helene. For many homeowners, small business owners and renters in Western North Carolina, the damage caused by Helene will be life-changing. FEMA payments can represent, at best, only a fraction of what a home would be worth. Car insurance typically covers all types of damage, including flooding—a small relief, but not enough to offset the loss of a family’s biggest asset.
“The people on the coast, sometime after the umpteenth storm, they start to get the message,” says Hornstein. “But for people in the western part of the state, this is simply Armageddon. And they can certainly be forgiven for not having appreciated the fine details of these impenetrable contracts sooner.”
Marlett says there are insurance models that are designed to better withstand the challenges of climate change. New Zealand, for example, offers policies that cover all types of damage that may occur to your home; While these policies are increasingly tailored in price to different types of risk, there is no chance that a homeowner will experience a weather disaster that is not covered by their existing policies. But it’s difficult, he says, to see the U.S. system getting the overall overhaul it needs, given how long the fragmented system has been in place.
“I sound very pessimistic,” he said. “I’m normally an optimistic person.”