Insurance Expert Analyzes Impact of Climate Risks on Homeowners

MINNEAPOLIS, Minn. — Chris Schafer, a seasoned writer and editor in the insurance industry, recently shared insights on the evolving landscape of home insurance amid climate change. As the managing editor at Insurify, Schafer discussed these trends during an interview with MortgagePoint.

With over two decades of experience, Schafer explained how the insurance industry is experiencing significant shifts due to an increase in extreme weather events. ‘The insurance industry is undergoing dramatic change,’ he said. ‘The rating models are shifting to better adapt to the realities of climate risks.’

Schafer highlighted the growing frequency of severe storms, especially in places like the Midwest, where convective storms are increasing in intensity, leading to higher insurance rates. ‘Housing values are connected to desirable locations, but with climate risks, those values could become problematic,’ he warned.

Drawing attention to affordability issues, Schafer suggested that market corrections, such as more policies moving to government Fair Access to Insurance Requirements (FAIR) plans, could be potential solutions. ‘There are many possible market corrections that could help amend the affordability crisis,’ he stated.

In his conversation about government actions, Schafer expressed skepticism. ‘I do not think the government is doing enough to protect homeowners right now,’ he said. ‘Both California and Florida are currently facing insurance crises, showcasing a lack of effective solutions from policymakers.’

Looking ahead, Schafer predicted that home insurance rates would continue to climb. ‘In 2025, insurers will increase rates to align with localized climate risks, and coverage offerings will evolve accordingly,’ he noted.

Schafer concluded with advice for homeowners: ‘Seek out your state’s FAIR plan for coverage. If you are unable to secure insurance, pursuing a FAIR plan policy is crucial. Do not go without insurance; you will pay for it in the end.’