Survey: Americans Not Persuaded to Buy Disaster Insurance
October 30, 2019
Climate-related risks are increasingly on Americans’ radars, but they aren’t as concerned that it will affect their properties.
Fifty-five percent of Americans recently surveyed say that climate change is increasing the severity and frequency of natural disasters. But 32% of Americans are not afraid of their property being damaged, according to a new survey from The Simple Dollar, a personal finance website. Researchers surveyed more than 2,700 Americans aged 18 and older to learn if they felt threatened by climate change and how well they were insured against natural disasters.
Climate change has been blamed for a rise in natural disasters. The federal National Centers for Environmental Information reported that, over nearly the past four decades, the U.S. has faced 250 weather and climate disasters. The cost of those disasters has surpassed $1.7 trillion.
According to the survey, 61 percent of women and 50% of men believe that climate change is increasing the severity and frequency of natural disasters.
While Americans are concerned, they are not purchasing insurance to protect against potential disasters at an equal rate. Forty-seven percent of Americans surveyed said they had purchased rental or home insurance to cover them in the event of a natural disaster. Thirty percent of those surveyed didn’t know if they were insured. The 18- to 24-year-old group was the most likely to say this, but nearly one in three Americans up to age 44 didn’t know if they were insured.
Older age groups tended to be more cautious than younger age groups about insuring their property, the survey found.
Some homeowners may lack the knowledge about the different forms of insurance to protect them against a natural disaster, or what all is available. Basic policies don’t cover all the damages from a natural disaster such as flooding.
The Simple Dollar offers the following overview on home insurance policies and what they typically cover:
Dwelling coverage: Dwelling coverage is the most standard home insurance offered. It will vary by state on what is covered. Generally, this type of coverage offers protection from fire and smoke damage, lightning strikes, windstorms, hail, explosions, vandalism, theft, damage from snow or ice, falling objects, and damage from an aircraft or a vehicle.
Contents coverage: This includes the items that are contained in a home, such as electronics, furniture, jewelry, and other valuable items.
Personal liability: Personal liability insurance covers bodily injury in case a guest is injured on your property.
Optional coverage: Many insurance coverage that protects against natural disasters tends to be optional. Insurance for floods, earthquakes, water backup from sewers, and unattached structures on a property usually require a separate home insurance policy. Homeowners should check what optional coverage is recommended in their area.
“55% of Americans Fear Climate Change Will Increase Natural Disasters, But 32% Don’t Believe Their Home Is at Risk,” The Simple Dollar (Oct. 23, 2019)
Updated: October 23, 2020