Does the average homeowner’s perception of weather risks match reality?

Does the average homeowner’s perception of weather risks match reality?

By Anita Byer, Setnor Byer Insurance & Risk

When it comes to protecting our homes against weather and climate disasters, our perception of weather risks must match the current reality, which is constantly changing. For instance, the reason it seems like damaging weather events are happening more often is because they are. According to NOAA, the United States is experiencing billion-dollar weather and climate events more often than before. Of all the billion-dollar events that have taken place since 1980, nearly 30 percent occurred within the past five years. So, as the reality of weather risks changes, the question becomes whether our perceptions are changing too. Fortunately, the Insurance Information Institute, together with Munich Re, recently conducted a nationwide survey of homeowners to find the answer.

The Homeowners Perception of Weather Risks 2023Q2 Consumer Survey sought to gauge homeowners’ current perceptions of climate events and weather risks. The reported results reveal a fascinating divergence of views among homeowners nationwide. Some are positive, others are promising and a few are concerning. For example, homeowners were asked when they think their residences might be impacted by climate risks/weather events in the future.

  • 59 percent believe their residence will be impacted within the next 10 years (positive).
  • 13 percent believe their residence will be impacted within the next 30 years (promising).
  • 25 percent do not believe their residence will ever be impacted (concerning).

Prior Experiences. Interestingly, a homeowner’s prior experience seems to significantly affect their current perception of weather risks. Ninety-two percent of those who experienced a weather event in the last five years believe their residence will be impacted by another weather event in the next 10 years. Whereas 36 percent of the homeowners who did not experience a weather event in the last five years do not believe their residence will ever be impacted by a weather event.

Top Weather Risk. Participants were asked to identify the type of weather event most likely to cause severe damage to their home. Fifty-four percent selected thunderstorms, making it the number one concern nationwide. According to the survey report, this perception aligns with data that thunderstorms are the most common and most damaging type of natural catastrophe in the U.S. (For purposes of the survey, thunderstorms include flooding and tornadoes since these events commonly occur concurrently.)

Not surprisingly, perceptions of weather risks vary by region. In the south, homeowners are most concerned about hurricanes. In the northeast, snowstorms and flooding top the list of concerns. Tornadoes are the primary concern for those living in the Midwest. Earthquakes and wildfires are the most common concerns of those living in the west.

Flood Risk. Sixty-four percent of homeowners responded that their homes were not at risk of flooding, and 14 percent were unsure of their home’s flood risk. This is concerning because recent weather events have made it abundantly clear that there is no such thing as a no-flood zone. The good news is that 78 percent of homeowners who believe they have a flood risk purchased flood insurance.

The survey demonstrates the need to educate homeowners about their actual weather risks as damaging climate events continue to increase in frequency and severity. Homeowners will not be as motivated to act (insurance, resiliency, preparations, etc.) if the perceived risk is less than the actual risk. Their perception must align with reality.

Contact our team of experienced and responsive insurance and risk management professionals to find affordable options to protect your home and your business against weather risks.