The Climate Insurance Crisis Is Crushing Black Homeownership

Willy Blackmore, Word in Black

As climate change intensifies storms, Black homeowners in the Southeast are more likely to face soaring insurance premiums.

In recent years, homeowners’ insurance costs have skyrocketed in parts of the country facing the most acute climate risks, such as the hurricane-prone Southeast. While that’s put a serious dent in home values in those areas across the board, a new study has found the insurance crisis has hit particularly hard in ZIP codes with higher percentages of Black and brown homeowners. 

The study, published by the National Bureau of Economic Research, found that the ZIP codes most affected by the climate change-driven insurance crisis stretch along the Gulf Coast, from western Florida to southern Texas — a region that is not only routinely beset by hurricanes but is also home to around half of all Black Americans.

Insurance premium increases “are capitalized into home values, reducing home price growth by over $40,000 in the most exposed ZIP codes,” according to the study. “The premium and home price effects are larger in areas facing rising climate risk.”

Homeownership in Harm’s Way

There are, of course, plenty of people who live in the Southeast who are not Black. But the numbers are uniquely stacked against Black residents, in terms of actual risk of major storms — and the financial hit that they’re taking because of that risk. 

Black communities in the Southeast are nearly twice as likely to be hit by hurricanes as other communities in the same part of the country. That’s not only a dramatically higher risk even within states that are routinely hit by hurricanes, but also speaks to how redlining and other racist housing practices have put Black people in harm’s way. 

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Many Black folks are forced to live in specific areas that have environmental and other drawbacks due to redlining.

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