How can that be? Consider this:
The U.S. has sustained 403 weather and climate disasters since 1980 where overall damages/costs reached or exceeded $1 billion (including CPI adjustment to 2024). The total cost of these 403 events exceeds $2.915 trillion.
These are the data for all US disastrous weather related events from 2024 as compiled by NOAA.
Note that many of the 2024 billion dollar disasters have been in the mid-west parts of the country, both north and south. This year has started quite differently.
And these are the data from all disasters from 1980-2024:
The year 2017-18 stands out as catastrophic for many different categories of disasters. The total cost of such disasters reached $400 billion.
There is a trend
The trend in $billion disasters over the last 25 years is clearly increasing:
Billion-dollar winter disasters more than doubled over the past 20 years. From 1985 to 2004, there were 31 billion-dollar winter disasters. From 2005 to 2024, there were 73 — a jump of 135.5%.
So, I found it amazing that only in the last several years, after all of these disasters, that insurance protection is only now becoming a crisis.
As the compounding impacts of climate-driven disasters take effect, we are seeing home insurance prices spike around the country, pushing up the costs of owning a home. In some cases, insurance companies are pulling out of towns altogether.
I think a significant part of the cause is this.
And many of the presumably climate change related insurance claims over the last few decades have been water/wind related and causing hundreds of $billions in damages- These are the data for "Flooding, Severe Storm and Tropical Cyclone" related disasters compliled by NOAA.
Do please have a look at this website (https://www.ncei.noaa.gov/access/billions/) and see how the numbers for different kinds of disasters can be observed.
The figure below isolates disasters from only flooding, severe storms and tropical cyclones:
In 2024, there were 27 confirmed weather/climate disaster events with losses exceeding $1 billion each to affect United States. These events included 1 drought event, 1 flooding event, 17 severe storm events, 5 tropical cyclone events, 1 wildfire event, and 2 winter storm events
And crop loss disasters are funded and covered separately, again, by the Federal government, and are categorized in a more complicated manner. But it is also well into the billions.
The ERP 2022 handbook also includes antiquated definitions for “related conditions” that limit eligibility in ways that overlook common disaster sequences. According to the handbook, "related conditions" must occur directly due to a qualifying disaster event. For example, if a wildfire in September 2022 was followed by rains in November, a resulting mudslide that destroyed crops would not be considered a related condition of the wildfire, rendering the crop loss ineligible. This overlooks the well-known link between wildfires and subsequent mudslides or debris flows, as wildfires often strip away vegetation critical for soil stability..
Wildfires
Until recently, wildfires, as severe as they are, have been relatively less destructive than flooding and severe storms, causing damages "only" in the $30 billion range. These are the data for wildfire related disasters in the same time period, 1980-2024, again, compiled by NOAA.
The crucial point is that the insurance companies want no part of that "maybe".
So, what´s the significance of these costs and its relationship with climate change?
As usual, the response has been to either dismiss climate change as the cause of the disasters or to simply shrug it off as in "There´s nothing we can do about it " or clamor for action to minimize climate change by reducing the burning of fossil fuels and releases of methane.
The Executive Branch is threatening getting rid of FEMA (though to still contribute to the states´ efforts).
But, deaths and injuries are separate from all of these data on disasters.
But then, there´s also this: "Fossil-fuel combustion by-products are the world’s most significant threat to children’s health..."
"Children, and especially the poor, bear a disproportionate burden of disease and developmental impairment from both environmental pollution and climate change due to the combustion of coal, oil, gasoline, diesel and natural gas."
How does one estimate the value of health and the effect of burning fossil fuels? Perhaps from the cost of health care?
Obviously, the increasing costs can be attributed to various reasons, including an aging population, technology, etc. But it is safe to suggest that, while far from the only reason, deteriorating air quality plays a significant role, especially for the poor.
The Executive seems to be oblivious to all of this and insists on "Drill Baby Drill". It is curious, and a separate issue, that the fossil fuel interests are not wholly onboard with that and here.
Perhaps we should consider this:
Homeownership is the bedrock of America’s economy. Residential real estate in the United States is worth nearly $50 trillion — nearly double the size of the entire gross domestic product.
(United States Government debt accounted for 122.3% of the country's Nominal GDP)
The First Street researchers found that climate pressures are the main factor driving up insurance costs. Average premiums have risen 31 percent across the country since 2019, and are steeper in high-risk climate zones. Over the next 30 years, if insurance prices are unhindered, they will, on average, leap another 29 percent, according to First Street. Rates in Miami could quadruple. In Sacramento, Calif., they could double.
And that’s where the systemic economic risk comes in. Not long ago, insurance premiums were a modest cost of owning a home, amounting to about 8 percent of an average mortgage payment. But insurance costs today are about one-fifth the size of a typical payment, outpacing inflation and even the rate of appreciation on the homes themselves. That makes owning property, on paper anyway, a bad investment.
No one is abandoning Los Angeles. ..Its wealth, density and government support make it far more resilient than places like Paradise, Calif., the New Jersey shore or Florida.
... Altadena may prove to be the true harbinger ⎯ of a future in which no one but the rich owns their own homes, where insurance is a luxury good, and where renters pay a monthly toll to large private equity landowners who may be better suited to manage that risk.
Why isn´t Wall Street sounding the alarm to the massive risk?
Financial markets, if left to their own devices, would naturally force Americans to confront the ugly realities of our changing climate and deter them from flocking to places where human habitation is increasingly untenable. Unfortunately, this basic system of supply and demand has been stymied by regional and federal policies — policies supported by both Democratic and Republican lawmakers in both blue and red states who buckle under the short-term political pressure to keep home insurance premiums artificially low.
The result is a highly distorted market. It endangers our economy by sending scarce resources into the path of natural disasters and will likely devastate still more lives.
Is the party over?
Something has got to give. Will it be FEMA, the National Flood Insurance Act, The Inflation Reduction Act (to build more renewables and burn less fossil fuel)? Costs of close to $400 billion in a year for disaster relief may be either an outlier or a harbinger of worse to come. I cannot believe that the US will roll the dice on that.
A lot comes down to who will it hurt more and who less, and when? It is hurting a lot of people now.
Personally, I am tired of subsidizing people who insist on building on flood plains and in storm surge/sea level rise impacted beach fronts. Without action, there will be no end to it. Nor am I prepared to watch fire and flood disasters occur while a poorly funded government does little to save lives and property.
Nor do I think it sensible to wait for 100 years or more and see if the climate skeptics were right after all, that the observed correlation between fossil fuel emissions and increased temperatures, the greenhouse effect, is not really a case of causation. It may be that the year-on-year increases in air and sea temperatures may be transitory or part of a much longer cycle like solar activity, and not related to greenhouse gas emissions. But the chance that the cause really is because of our greenhouse gas emissions over the last 150 years, is not worth the dystopia that may have resulted in the meantime. It is not worth the risk. The direct health effects alone of continuing to burn fossil fuels should be enough to make the transition as soon as possible.
I am quite prepared to pay more for electricity and to build out a resilient grid, car charging infrastructure and renewable sources of power, battery storage, energy conservation measures, requirements and enforcement for utilizing available measurement technology for reporting emissions, phased in emissions reduction measures, and even direct CO2 capture and sequestration, as expensive and limited as that is. At this point, even nuclear may play a larger role, provided it is resilient, proven technology, manages its waste safely and in the long term, and even remotely close to cost competitive.
It would be well worth the price to see the end of headlines such as this.
Global Temperatures Shattered Records in January
Earth’s prolonged streak of abnormal heat continued into 2025 despite the arrival of La Niña ocean conditions, which typically bring cooler temperatures."
and data such as this:
and this:
Yes, $250 Billion disasters may well change a lot of minds. $400 billion in total disasters per year may be just the beginning.
It may be that the LA fires and other disasters in 2025 represent an inflection point upward in the trend of disasters in the US. and their associated costs. They may also be outliers. Please take a look at the data at https://www.ncei.noaa.gov/access/billions/
Risk
Nothing is certain. The real issue is the degree of risk - but, in the case of home ownership for most people, it´s not the risk that we perceive, but the risk that insurance companies perceive. After all, most people have mortgages, and most mortgage providers require insurance.
So, it's only the most affluent of home owners who get to manage the risk of disaster by themselves. It seems like it should be very hard to again lapse into complacency about the effects of climate change. But, what are the options?
This is not an argument amount "wokism", DEI, left vs. right, elitism or Democrats vs. Republicans. It is the management of the risk to the country and its people as a whole. What is quite obvious, is that we cannot spend the next four years going backwards. But early indications are that that is where we are headed.