When home insurance costs an average of 3,700 euros per year – This is how climate change affects housing costs

A hurricane or tropical cyclone is born in warm sea areas. When it lands on the mainland, it unfortunately often sows destruction and death.

At the end of September, Hurricane Helene wreaked havoc in the southeastern United States. This week Milton made landfall on the west coast of the state of Florida near the city of Tampa

Between 1980 and 2023, hurricanes caused a total of 1,300 billion dollars or 1,200 billion euros in economic damage in the United States, counts NOAA, the federal climate and ocean monitoring authority.

As seawater warms more than before as a result of global warming, the number and strength of hurricanes and the destruction they cause will increase. It shows in home insurance rates in hurricane-prone Florida.

The average price of home insurance for a single-family house in Florida is 4,060 dollars, or 3,710 euros per year, according to a professor at the University of Pennsylvania by Benjamin Keys information collected. In Finland, extensive home insurance for a detached house can cost 300–800 euros per year.

From 2019 to 2023, the cost of home insurance has increased by an average of 57 percent in Florida. At the same time, many private insurance companies have withdrawn from the market because the increase in compensation expenses has made insurance unprofitable.

In Florida, the state sells home insurance

So Florida’s largest seller of home insurance is now an insurance company chartered by the state. If the company runs out of money, if necessary, it can pass on its costs to all Florida policyholders.

The public power has therefore decided to force all Floridians to bear the costs and risks caused by hurricanes, because private capital has begun to avoid them.

The increase in the number of hurricanes and the subsequent change in the insurance market in Florida reflect the chain of causes and effects that determine the price of global warming.

The Florida example comes with an ironic footnote. In Florida, with natural gas, i.e. fossil fuel that causes carbon dioxide emissions 74 percent are produced of the electrical energy used by the state.

Wind power does not produce electricity in Florida. The main reason for the lack of wind power is bad wind conditions, but in general, Florida’s legislators have taken a cautious approach to renewable energy.

Electricity in Florida is affordable and reliable. On the other hand, conservatively estimated, hurricanes cause damages of tens of billions of euros per year on average. This equation is the sum of political choices.

The author is the editorial manager responsible for data and information.