Last year, 14.5M properties suffered damages from natural disasters to the tune of $56.9B, according to CoreLogic.
14.5M Properties Cost $56.9B Due to Natural Disasters in 2021
CoreLogic just released its 2021 Climate Change Catastrophe Report. This report estimated that one in ten US homes, or roughly 14.5M properties, were touched by hurricane, wildfire, winter storm and/or severe weather events in 2021. These varied natural disasters caused approximately $56.9B in property damage.
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Entire Communities & Economies Affected by Natural Disasters
Homeowners, of course, are not the only ones affected by impacts of natural disasters on their properties. Mortgage lenders and insurers are also directly affected.
Let’s also not forget potential homebuyers who must also factor in climate risks, along with rising mortgage rates and rising home prices, to their calculations of where and what to purchase a primary, second/third, vacation rental home. In fact, a recent survey done by Realtor.com found that 78% of buyers are now considering natural disaster risk when looking for a home.
And these days, with climate disasters rising with increasing frequency and intensity, appointed/elected city/county/regional/state/federal officials and departments have to take the lead in developing mitigation, prevention, rezoning, funding and legislative efforts to deal with the wide-ranging impacts of natural disasters.
CoreLogic’s Estimated Property Damage Caused by Natural Disasters in 2021
- Wildfires – $1.46B
- Severe Weather (including tornadoes and hailstorms) – $7.46B
- Hurricanes – $33B
- Winter Storms – $15B
Long-Term Impacts of Natural Disasters
CoreLogic repeatedly emphasized in this 2021 Climate Change Catastrophe Report that direct costs from natural disasters swallowed by homeowners and insurers are just the tip of the iceberg when climate disasters hit.
This report stated that natural catastrophes “often leave communities with significant long-term impacts,” and recovery can continue “long after rebuilding is complete.” Additionally, the report stated, “A significant portion of the population may not wait for physical infrastructure to be rebuilt, instead choosing to relocate. This can leave the area with less human capital available to sustain its local economy…in addition, job displacement and the destruction of real estate assets can leave many community members unable to pay their mortgages or afford reconstruction costs. This is especially true in low-income areas, where underinsurance rates are high, and savings rates are low.”
Likewise, reconstruction costs are now at least 19% higher now than they were pre-pandemic due to escalating material costs, labor shortages and supply chain disruptions.
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CoreLogic’s Advice to Multiple Stakeholders
CoreLogic suggests in this 2021 Climate Change Catastrophe Report the following advice;
- Mortgage servicers – create better risk assessment tools & educational programs on proactive hazard mitigation
- Local/state/federal governments – create/enact policies based on latest research on impacts of natural disasters
- Insurers – improve underwriting accuracy, claims management efficiency and homeowner education based on data and analytics
Thanks to CoreLogic and Inman.