Climate Driven Premium Spikes Hit Black Households Hardest

In recent years, the expense of homeowners’ insurance has surged dramatically, particularly in regions vulnerable to climate threats, such as the hurricane-riddled Southeast. This spike has notably impacted home values, especially in areas predominantly inhabited by Black and brown homeowners. A study from the National Bureau of Economic Research highlights that the ZIP codes most affected by this climate-induced insurance crisis run along the Gulf Coast, from western Florida to southern Texas—territory that not only faces frequent hurricanes but also houses nearly 50% of Black Americans. Elevated insurance premiums are affecting home values, with reductions exceeding $40,000 in the hardest-hit areas. Black households are disproportionately exposed to the vulnerabilities associated with hurricane risks, largely due to historical discriminatory practices like redlining. Additionally, the average credit score for Black Americans falls nearly 100 points below that of their white counterparts, leading to significantly higher insurance costs. As such, many families in regions like these find themselves gambling with their financial future, often forced to navigate expensive premiums simply to secure homeownership.