Insured losses due to Hurricane Helen are now estimated at more than $6 billion, but uninsured losses are much higher. This is because the vast majority of homes affected by the storm, especially in hard-hit North Carolina, did not have flood insurance.
New risk assessment technology has been designed to help change this in the future.
Most homeowners in North Carolina do not have flood insurance, because they are not in flood zones designated by the Federal Emergency Management Agency. Government-backed mortgages require flood insurance in those specific areas.
Only 4% of North Carolina homes are in a Federal Emergency Management Agency (FEMA) flood zone. But climate risk firm First Street, which incorporates the impacts of climate change into its real estate risk scores, shows that nearly 12% of homes in the state are at risk of flooding.
First Street has just launched a set of climate risk data for every property for sale it lists Zillow.
“Climate risk is now a critical factor in home buying decisions,” Skyler Olsen, chief economist at Zillow, said in a press release. “We provide buyers and sellers with clear, property-specific climate data so they can make informed decisions. With growing concerns about floods, extreme temperatures, and wildfires, this tool also helps agents inform their clients about discussing climate risks, insurance, and climate change. And affordability over the long term. “The long one.”
A house along the Broad River in the aftermath of Hurricane Helen on October 1, 2024 in Bat Cave, North Carolina.
Sean Raiford | Getty Images
Every for-sale listing on Zillow now displays First Street risk scores for flood, fire, wind, air and heat. They also show the same estimated risk ratios for 15 years and 30 years in the future — standard lengths for fixed-rate mortgages.
For properties that have some risk now, the risks are often shown to rise over time, with First Street including the impacts of climate change. This is especially true for flood risk, because climate change is already intensifying the intensity of precipitation, even in minor storms.
The data also includes a recommendation on whether a homeowner should have flood insurance and a link to the First Street website, which will help estimate insurance costs.
“Many people think they are safe from flooding if they are not in a FEMA flood zone, and that is certainly not true. Heavy rains can affect many people across the country, and there is no indication of a flood zone.” “This poses a risk to you,” said Ed Kearns, First Street's chief science officer. “We've created these new flood maps that take that into account, which will allow consumers to make that informed choice about whether.” “They needed flood insurance.”
More than 80% of buyers now consider climate risks when buying a home, according to a Zillow survey. Survey respondents ranked flood risks as their biggest concern, followed by fires.
A Zillow analysis of August listings found that more homes across the country were exposed to significant climate risks than those listed for sale five years earlier. The analysis found that this applies to all five climate risk categories. For new listings in August, 16.7% are at risk of major wildfire and 12.8% show high risk of flooding, according to Zillow and First Street data.
As more consumers consider these climate outcomes in their purchasing decisions, the impact on home values is sure to increase. Insurance costs have already been factored into housing prices, and as insurance becomes more expensive and necessary, home values in the hardest-hit areas will decline.
“I think the most direct impact of having results on homes identifying risks is that there may be some direct impact on property values, but a lot of that will pass through the amount of insurance needed to cover that,” Kearns added.
