Climate-driven floods, hurricanes, wildfires and heat waves cause billions of dollars of damage every year in the United States. Federal scientists hope that better access to climate data will help one industry adapt: property insurers.
Insurance companies are on the hook to pay for repairs after disasters, and even to rebuild entire homes and businesses that are destroyed. The growing cost to insurers was on full display last year, when Hurricane Ian caused more than $100 billion of damage in Florida, at least half of which was insured.
As climate-driven extreme weather gets more common, insurance companies nationwide raise prices, or cancel policies altogether, leaving homeowners in the lurch. Florida, North Carolina, Louisiana, Colorado, Oregon and California have all seen insurers fold, cancel policies or leave the state after repeated floods, hurricanes and wildfires.
"More and more Americans are frankly having mother nature barge through their front door," says Roy Wright, who leads the Insurance Institute for Business and Home Safety, an insurance industry-backed research group. "That change in climate comes at a price."
Now, two federal science agencies are trying to help. The National Oceanic and Atmospheric Administration (NOAA) and the National Science Foundation (NSF) say they will create a research center that focuses on bringing climate change data to the insurance industry.
The goal is to help insurers understand how often and how severe floods, fires, heat waves and other climate-driven disasters will be in the future, so that companies can adjust their businesses to cope with that risk.
It's not that insurance companies aren't already considering climate change. "Insurers are incredibly sophisticated around trying to understand physical climate risk," says Sarah Kapnick, NOAA's chief scientist.
But, Kapnick says, the methods that insurers currently use to figure out how much to charge for a property insurance policy don't typically include detailed, long-term projections about how the climate will change in the future. Instead, companies rely on information about what has happened in the past: how frequently hurricanes have caused flooding, for example, or how hot the weather gets in August.
The problem is that the future, and even the present, no longer look like the past. Large hurricanes that used to be infrequent are getting more common. The hottest days are often beyond what anyone has ever experienced.
"What we knew about rain and wind and wildfire in 1990, and what we knew in 2010, is useful information, but it's insufficient to understand the risks that befall us come 2025, come 2030," Wright says. "NOAA, and the data they provide, is some of the most powerful data available anywhere in the world."
Kapnick says she has heard from insurance companies that are increasingly concerned that they don't have sufficient information to accurately assess what the future holds.
"In the last few months they've really come to us saying, 'We need better information on understanding climate change and its effects on extreme [weather],'" Kapnick explains.
The industry group the American Property Casualty Insurance Association says the new research center will be "extremely beneficial" to property insurers.
"Climate change is a significant concern to the property casualty insurance industry as our nation faces the prospect of increased frequency and severity of major natural disasters including hurricanes, wildfires, and floods," Karen Collins, a vice president at the trade group, wrote in an email to NPR. "Insurers strongly support increased investments that help advance the latest science."
The goal of the new research center will be to make detailed federal climate data available to insurance companies so they can use climate science to look into the future.
In the coming months, the National Science Foundation will choose one or more universities to lead the center. Academic researchers, graduate students and federal scientists will work with insurers and reinsurers to make scientific information about climate change accessible to insurance companies, NOAA says.
This type of collaboration between universities, government scientists and companies is not limited to climate science. The NSF oversees more than 70 such centers, including in agriculture, materials science and transportation.