Climate change is altering the pace of hurricane season 2022
From Texas to Maine, millions of homes stand in the path of a potentially devastating hurricane. As the 2022 Atlantic hurricane season enters its most active months, the challenge remains predicting which storms will blow over and which ones will result in billions of dollars of repairs.
With 31 million homes at risk of wind damage and 7.5 million facing surge damage — which are the two main causes of loss from these storms according to CoreLogic data— it is important to understand overall property risk to minimize damage and accelerate recovery.
NOAA says Atlantic hurricane season is above-normal
The National Oceanic and Atmospheric Administration (NOAA) released an update on Aug. 4 through the National Weather Service stating that the agency expects this year to be an above-normal Atlantic hurricane season. Forecasters did announce that the likelihood of an above-normal season was slightly decreased from its initial prediction in May, sinking from a 65% chance to a 60% chance.
During an average season, the Atlantic Basin will see 14 named storms, of which seven become hurricanes. As of Sept. 20, 2022, there were six named storms in this region.
Climate Change and its influence on weather patterns
However, the Atlantic Ocean is not the only North American body of water to experience hurricanes. The Eastern Pacific Basin also sees significant tropical storm activity annually.
Although hurricane season traditionally runs from June through November, the 2022 season began early when Hurricane Agatha made landfall in Mexico on May 30, 2022. This is the earliest Category 2 storm to make landfall along Mexico’s Pacific Coast.
However, the intensification of storms is a trend that has been brewing for several years. Ocean temperatures are rising, causing scientists to predict that we should expect more frequent and destructive tropical cyclone activity. With increased storms, property losses will continue to mount.
Climate change confronts us with a future that doesn’t look like the past and forces a re-appraisal of our current practices. However, anticipating natural catastrophes to translate them from an unknown quantity into something that is manageable, foreseeable and avoidable requires an active reliance on science, data and analytics to help understand what is coming.
“Climate change equates to stronger winds and more flooding from tropical storms. However, predicting the effects of climate change on property can be difficult without accurate and up-to-date property data and analytics. Insight through data is the key to help mitigate the damage and hasten our recovery from tropical storms — enabling us to continue our progress toward more resilient communities,” said Tom Larsen, an expert in catastrophe risk management and insurance solutions at CoreLogic.
Preparedness is key in active hurricane months
Last year’s hurricane season saw $80 billion in damage from 21 named storms, making it the third-most active season on record, according to CoreLogic’s 2022 Hurricane Report.
The billions of dollars in property damage is far more than simple repairs and a bill. Many homeowners who weather a hurricane experience ongoing financial trauma, including an inability to pay mortgages, limited access to shelter or even an overall depreciation in home prices if the damage to a community is widespread.
As climate change is leading to more severe hurricane seasons, understanding how damage can affect communities is critical to creating a resiliency plan.
Hurricane Ida is a prime case study for the necessity of a plan. The Category 4 cyclone made landfall on Aug. 29, 2021 and became one of the costliest insured hurricane losses ever. Not only did it result in $25 billion in damages, with a substantial portion of the loss due to flooding, but the aftermath has had long-term consequences.
Ida led to a spike in home mortgage delinquency in Lafourche Parish, which is part of the Houma metro area. In the month following the hurricane, the percentage of borrowers in Houma who were at least three months behind on payments jumped by 50%, rising from 4.4% in September to 6.6% in November even though serious delinquency rates declined 16% nationwide during that same period.
Although prices did eventually begin to recover, they increased at less than one-half the national rise recorded in the CoreLogic Home Price Insights.
The U.S. government is taking this threat of climate change on properties seriously, and the U.S. Securities and Exchange Commission released guidance on how publicly traded companies should disclose ways in which climate change can affect their businesses.
“Right now, in loan origination, if a property is in a Special Flood Hazard Area as defined by FEMA — so a 100-year flood zone, specifically known as a Special Flood Hazard Area (SFHA) —it is required to have flood insurance if it has a federally-backed loan,” said CoreLogic Principal Account Executive George Gallagher. “Here is the issue: this does not account for graduated risk. Since Hurricane Harvey, the concept of graduated risk — risk outside the Special Flood Hazard Area — has really caught hold and captured the attention of investors, as well as lenders and insurers.”
Qualified, comprehensive information for property at the parcel level is what enables the anticipation of a risky future and a controlled path forward in the face of increasingly unpredictable natural phenomena. With data analysis, we can manage how financially prepared we are, how strong our buildings are and how quickly claims adjusters can get people back on their feet.
For more in-depth analysis of housing vulnerability and well as insight into how data can drive resilience within communities, visit HazardHQ.com.