Addressing Insurance Needs as Climate Risks Increase
An increasing number of homes and communities throughout the country are at risk as wildfires, floods, and other natural disasters continue to set records.
As a result of these growing risks, many insurance companies are providing fewer options, drastically increasing premiums or dropping out of certain markets. This is creating a ripple effect on the housing market for builders, buyers, and home owners looking to repair/rebuild after an event. There is also a growing gap between insured and uninsured losses, leading to increased needs and higher competition for limited resources
NAHB created a Climate Change Insurance Task Force in 2021 to study these issues and provide a recommended roadmap for the home building industry. The task force focused on identifying gaps and challenges in current insurance products available to home owners to cover losses from wildfires, flooding, earthquakes, extreme heat and other climate-related losses. It also identified alternatives and recommended next steps to ensure our members and their customers have access to appropriate insurance products.
The Task Force completed its work and a final report was transmitted to the Senior Officers in mid-April. Highlights include facilitating the expansion of new options for multi-state insurance and exploring the possibility of Congress creating an all-disaster reinsurance policy that would be backed by the federal government.
NAHB staff have been directed to begin conversations with insurance trade groups and others to assess the feasibility of pursuing NAHB’s high priority recommendations. Staff will also begin to develop resources and an update will be provided to members at the Spring Leadership Meetings next month.
Resolving these insurance challenges is part of NAHB’s broader support for a comprehensive approach to addressing natural disasters and their effects on the entire housing stock of the United States. NAHB will continue to explore all options to address these growing concerns at the local, state and federal government levels.
Members can access additional NAHB resources for preparation and response, and resilient construction related to natural disasters.
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