Everyone’s in the same storm but not in the same boat

Many of us enjoyed a long holiday weekend but thousands of families across Florida, Georgia, South Carolina and North Carolina struggled forward without electricity, running water or cell service, with lives and property in shambles following hurricanes Helene and Milton.?For every homeowner, this is a crisis.?But for homeowners with low-incomes – where their home may be their only asset – these storms could have just wiped out a generation of wealth.? Insurance – the thing that millions of us pay for each month – is often not the safety net that we imagined.?

The availability and affordability of insurance is no longer a given.?Governor Ron DeSantis said that Florida’s insurance program, Citizens, is reaching the limits of its solvency.?Across the U.S., insurers are retreating from climate-vulnerable areas, raising premiums to account for the increased risk and reducing coverage.?Many families that can get coverage at all are choosing policies with higher deductibles, which reduce their premiums but provide much less coverage. This may seem like a logical choice until a Helene or Milton blows through and they are faced with thousands of dollars in out-of-pocket costs.?

Flood, fire and wind levy their fury equally on 1%-ers and the very poor, but recovery is a very different story. ?Some homeowners have pathways to rebuild though savings, steady jobs and comprehensive insurance.?Some will become a new breed of migrants who just pack up what they have left and move elsewhere. Some may have just lost the only asset they have, and it will be hard – if not impossible – to rebuild.?Especially for Black and Hispanic homeowners, groups that nationally lag White homeownership by about 20 percent and 30 percent, respectively - this could affect not just this generation, but the next as well.?

The The Wall Street Journal reported recently about the growing number of communities floating bonds – taking out loans – to pay for climate-related damage to infrastructure.?Those loans will be repaid by taxpayers.?In the meantime, municipalities may have to make cuts to essentials like education, public health, and safety to make room for the new debt service and balance the budget.?These cuts are often felt most by those who need these services most - people with low-incomes.

Borrowing to pay off climate-related damage without doing anything to prevent future damage is like borrowing to pay off gambling debts but continuing to gamble.?Additionally, this type of borrowing does not address the impact of these climate disasters on individual homeowners whose homes have been destroyed.?

But there are other options. States, including Alabama, California, Florida, Louisiana, North Carolina, South Carolina and others, are flipping the script and investing in resiliency to avoid the expensive, heartbreaking aftermath of climate disasters; we need to accelerate and incentivize this approach at scale nationwide.?These states are funding the strengthening of homes and communities against hurricanes and wildfires, raising the standards for building codes and mandating commensurate reductions in premiums.?These are all measures that will save money, lives and businesses and accelerate the return to normalcy: businesses reopen more quickly, tourists return, kids go back to school and parents go back to work. Moreover, these investments pay for themselves over time.?

As the next weeks unfold, the national media coverage will fade but the long term health and wealth impacts of these storms will become more clear.? As Good Morning America reported this weekend, the human toll of big storms include “thousands of extra deaths” over time, linked to infectious diseases and the long-lasting effects on chronic health conditions like?heart disease and mental stress.?

?When we invest early in resilience it is not only the cost-effective thing to do, but also the right thing to do for health, wealth and community.

Follow Impact Investments at RWJF for information about how we're working with partners across sectors looking for solutions to ensure the availability and affordability of insurance for homeowners with low incomes.

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