Natural disasters devastated large swaths of the U.S. in 2021, from wildfires in California to snowstorms in Texas and hurricanes in Louisiana, Florida and elsewhere. Severe weather proved deadly around the country and took an economic toll, displacing jobs and causing billions of dollars in damages to single-family and multifamily homes.
These disasters are increasing in frequency and severity, according to CoreLogic. The property analytics company releases an annual report that offers a snapshot of the largest weather-related disasters each year. The goal is to better understand how communities are impacted by climate change in the short and long term so that they can not only prepare for these disasters but also recover.
“How do we make sure that a community can bounce back?” said Tom Larsen, CoreLogic’s principal of industry solutions. “At the end of the day, the community is thousands and thousands of individual decisions. A lot of it is the financial piece.”
Larsen spoke to Scotsman Guide about CoreLogic’s 2021 Climate Change Catastrophe Report. He explained why the company does the report, how it’s attempting to quantify these disasters and what to expect in the future.
How long has CoreLogic produced this report and why is it a priority?
The report has been evolving, but CoreLogic has been producing this report in its current framework for about five years. A key aspect of climate is weather. The expectation from weather informs our building codes, insurance pricing and availability, your mortgage rates and how a community organizes itself.
Can you summarize what you found last year?
We focused on the biggest events from last year, what NOAA (National Oceanic and Atmospheric Administration) called the billion-dollar catastrophes. About 10% of the homes in the country were impacted by a form of a natural catastrophe last year — not every home was destroyed, not every home was damaged, but the 10% figure, that’s a lot.
We should be expecting that these billion-dollar events are here to stay.
You also found $56.92 billion in damages from these catastrophes. How does this compare to previous years?
We hadn’t done this type of tally in the past, except informally. Last year was a modestly bad one. It certainly was not record-breaking, but it was an exceptional year. It’s certainly above the median.
This was the first year that you produced a total dollar figure?
Yeah. The arc of data analysis and home-risk analytics is toward finer and finer, more granular, more complete information on homes. And we try to keep the report evolving. We intend to keep tracking this number going forward.
Has there been any pushback with the use of the term ‘climate change’?
Yes, it’s becoming easier to use that term, but we want to get more specific, and less vague and scary. That’s what we’re hoping to do with this report.
You found evidence that homeowners are unable to afford mortgages or rebuild after these events, correct?
‘Unable’ is a bit strong. We certainly have seen those challenges to homeowners as they’re trying to recover. We’ve seen indications with mortgage issuers and servicers that there were a lot more deferred mortgage payments in the data signals.
CoreLogic noted these disasters are increasing in frequency. Can you quantify that?
That statement there is why we want to start putting out more data. The same event that hits the same community, if there are more of us, it’s going to be a bigger dollar amount. Let’s say a tornado 25 or 50 years ago hit an empty field. If it were to reoccur in the same place, [there’s a greater likelihood it’s] going to hit a home. We expect that. We’re trying to put really hard numbers on it. We expect that upward slope; we’d like to add some clarity to it. Is it very steep or is it a moderate slope?
There had been a yearly streak of 10 or more weather and climate events surpassing $1 billion in losses. Did that continue in 2021?
It’s about 15 or 18. So, it’s much higher than 10. That seems to be the pattern. We should be expecting that these billion-dollar events are here to stay. ●
