Kristy Jiayi Xu got an unwelcome surprise this New Year’s Eve: The roof of her garage was leaking during a severe rainstorm in San Francisco. Delays in getting a contractor to fix the roof have brought unexpected costs to keep things dry, including a dehumidifier.
“My husband and I are both from the East Coast, so we always think the rain here lasts for a day,” says Xu, certified financial planner and CEO of the firm Global Wealth Harbor.
In September 2022, she and her husband faced a heat wave — another weather incident they weren’t expecting.
“We have air conditioning, but the bill was so high,” she says.
For over a decade, scientific reports have shown how climate change will likely make extreme weather events more frequent. And this trend might affect your wallet.
Let’s break it down.
Higher insurance deductibles and additional policies
More storms typically mean more risk of damage to your home or car. And getting enough home and other insurance — at a reasonable cost — can be its own challenge.
Competition among insurers is shrinking in areas most vulnerable to climate change, which means higher prices for consumers, especially higher deductibles, says Amy Bach, executive director of United Policyholders, a nonprofit that advocates for insurance consumers. A deductible is the amount you pay before an insurer covers damages.
In hurricane-prone states, some insurers offer home insurance policies with separate hurricane deductibles. And insurers’ policy language keeps changing to limit what they pay for, Bach says.
Climate change contributes to rising insurance costs, but pricing risks is what insurers are equipped to do, said Jeff Brewer, department vice president of public affairs for the American Property Casualty Insurance Association, in an email. However, legal system abuse, claims fraud and regulatory interference contribute to growing market instability in several states, he said.
If you live in an area prone to floods or earthquakes, you’d want extra insurance since most homeowners and renters insurance policies don’t cover damages caused by those disasters.
“The toughest thing is, so many households now are on a tight budget. It’s hard to tell people to buy three separate insurance policies,” Bach says.
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As the effects of climate change are increasingly felt, here’s how they might affect your emergency fund and how you can divvy up your savings to prepare.
Higher food and energy costs
Extreme temperatures have become more frequent, which can affect crop production and household energy usage. In turn, your grocery and energy bills may increase.
“Higher temperatures over recent decades have played an increasingly non-negligible role in driving price developments,” according to a 2021 report by the European Central Bank that analyzed temperature data and price indicators in 48 countries, including the U.S. “Food price inflation could be explained by a negative effect of hot summers on food production, resulting in supply shortages.”
Home heating prices this winter are expected to reach the highest level in 10 years, according to the National Energy Assistance Directors Association. And last summer, NEADA found that cooling costs also increased.
Indirect hits on investments
“Climate change is going to impact the long-term valuations of both stocks and bonds,” Zach Stein, co-founder of Carbon Collective — an investment advisory firm focused on creating portfolios that fight climate change — said in an email.
Some industries’ performance may hurt your investment portfolio returns. Stein predicts that we’ll see the most volatility in upcoming decades in agriculture, insurance and real estate.
Rising sea levels will likely affect coastal real estate. For example, Florida homes exposed to flooding could lose 15% to 35% of their value by 2050, according to a 2020 report by the global consulting firm McKinsey.
What you can do now
Compare home insurance options. Get quotes from multiple insurers. In areas where insurance is hard to get, Bach recommends getting help from an independent agent or broker. She suggests the website TrustedChoice.com as one option.
Expand your emergency fund. Experts generally recommend setting aside three to six months’ worth of living expenses in a savings account. Since disasters can have more unpredictable costs than job loss, CFP Xu recommends aiming closer to the six months’ figure.
Consider banking and investing that support environmental causes. A handful of banks and credit unions have third-party certifications to prove that their customers’ deposits don’t support the fossil fuel industry. For investing, look into mutual funds or robo-advisors that use environmental, social and governance factors.
“Storm-proof” your property. Try reducing potential damage before the next big weather event. In case of flooding, have sandbags available and clear your gutters. In case of a wildfire, look into fire-resistant vents and roof materials. In case of a hurricane, cover windows with plywood or metal storm shutters.
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Skinny robot documents forces eroding Doomsday Glacier
MIND AND I // Shutterstock
Climate anxiety and climate-related trauma are mental health concerns rooted in real experiences, such as natural disasters, and existential worry for the future.
Roughly half of young people—those who will inherit the consequences of climate change complacency and live through the most severe effects of extreme weather—report that climate change negatively affects their daily lives, according to a global survey of 10,000 people between the ages of 16 and 25. The majority of respondents said that in the context of climate change, they are frightened of the years ahead.
This concern is prevalent in the United States as well, with more than half of Americans stating climate change is the single most important issue facing society today. Large swaths of the U.S. are facing climate-related flood risks due to rising sea and freshwater levels and increased rainfall. Roughly 80% of the country is experiencing unusually dry conditions, most notably the Western U.S., which has been gripped by a megadrought. Cities are getting hotter, while wildfires are growing in frequency and intensity. At present, virtually every bit of the U.S. is impacted by climate change.
And yet, most people have done little, or nothing at all, to change their behavior to mitigate their own impact on the environment. When facing a problem so extensive, it can be overwhelming even to attempt to find a manageable solution. But starting small—and starting at all, really—is one of the most important things you can do.
Westfield compiled a list of eight ways people can prepare their communities for the impacts of climate change. Building climate resilience, or the ability to prepare for and respond to climate-related events, may also help ease climate anxiety, improving both the environment and one's quality of life.
MIND AND I // Shutterstock
Climate anxiety and climate-related trauma are mental health concerns rooted in real experiences, such as natural disasters, and existential worry for the future.
Roughly half of young people—those who will inherit the consequences of climate change complacency and live through the most severe effects of extreme weather—report that climate change negatively affects their daily lives, according to a global survey of 10,000 people between the ages of 16 and 25. The majority of respondents said that in the context of climate change, they are frightened of the years ahead.
This concern is prevalent in the United States as well, with more than half of Americans stating climate change is the single most important issue facing society today. Large swaths of the U.S. are facing climate-related flood risks due to rising sea and freshwater levels and increased rainfall. Roughly 80% of the country is experiencing unusually dry conditions, most notably the Western U.S., which has been gripped by a megadrought. Cities are getting hotter, while wildfires are growing in frequency and intensity. At present, virtually every bit of the U.S. is impacted by climate change.
And yet, most people have done little, or nothing at all, to change their behavior to mitigate their own impact on the environment. When facing a problem so extensive, it can be overwhelming even to attempt to find a manageable solution. But starting small—and starting at all, really—is one of the most important things you can do.
Westfield compiled a list of eight ways people can prepare their communities for the impacts of climate change. Building climate resilience, or the ability to prepare for and respond to climate-related events, may also help ease climate anxiety, improving both the environment and one's quality of life.
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Skinny robot documents forces eroding Doomsday Glacier
Richard Pratt // Shutterstock
Rain gardens can help prevent erosion, absorb standing water, redirect and filter polluted runoff, and recharge groundwater supplies. A single rain garden can treat 25,000 gallons of water each year. In regions of the county like the Northeast, where climate change is predicted to lead to more heavy downpours and flooding, rain gardens can mitigate those issues. In severely drought-prone areas, a rain garden won't be effective, but a rain barrel can help collect water.
Richard Pratt // Shutterstock
Rain gardens can help prevent erosion, absorb standing water, redirect and filter polluted runoff, and recharge groundwater supplies. A single rain garden can treat 25,000 gallons of water each year. In regions of the county like the Northeast, where climate change is predicted to lead to more heavy downpours and flooding, rain gardens can mitigate those issues. In severely drought-prone areas, a rain garden won't be effective, but a rain barrel can help collect water.
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Skinny robot documents forces eroding Doomsday Glacier
Ray Geiger // Shutterstock
Invasive species often thrive under the extreme conditions of climate change. Plants grow larger and faster when higher carbon dioxide levels—a key consequence of climate change—are present. Research suggests invasive species are more effective at utilizing higher CO2 concentrations. As they grow larger and more prolific, they outcompete native species for space, water, light, and nutrient resources. Removing invasive species cancels this competition and allows native species to thrive.
Ray Geiger // Shutterstock
Invasive species often thrive under the extreme conditions of climate change. Plants grow larger and faster when higher carbon dioxide levels—a key consequence of climate change—are present. Research suggests invasive species are more effective at utilizing higher CO2 concentrations. As they grow larger and more prolific, they outcompete native species for space, water, light, and nutrient resources. Removing invasive species cancels this competition and allows native species to thrive.
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Skinny robot documents forces eroding Doomsday Glacier
PT Hamilton // Shutterstock
According to the Environmental Protection Agency, Americans use a combined 8 billion gallons of water every day for lawn and garden irrigation, some of which is lost to evaporation and runoff. The majority of household water usage is diverted to outdoor purposes. This is a hugely wasteful use of scarce water resources in severely drought-ridden areas like the American West, and as a result, nonfunctional turf grass is banned in many places. Climate-friendly alternatives include no-mow lawns, turf lawns allowed to grow wild, lawns comprised of drought-tolerant native plants that thrive under local conditions, usually requiring less water, or xeriscaping.
PT Hamilton // Shutterstock
According to the Environmental Protection Agency, Americans use a combined 8 billion gallons of water every day for lawn and garden irrigation, some of which is lost to evaporation and runoff. The majority of household water usage is diverted to outdoor purposes. This is a hugely wasteful use of scarce water resources in severely drought-ridden areas like the American West, and as a result, nonfunctional turf grass is banned in many places. Climate-friendly alternatives include no-mow lawns, turf lawns allowed to grow wild, lawns comprised of drought-tolerant native plants that thrive under local conditions, usually requiring less water, or xeriscaping.
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Skinny robot documents forces eroding Doomsday Glacier
AlyoshinE // Shutterstock
Some households have the option to choose the source and supplier of their electricity. Where wind or solar is available and compatible, customers may opt for these cleaner sources compared to fossil-fuel-generated electricity. Alternatively, getting set up with solar panels and other renewable energy sources will provide greater energy independence in the face of power outages from natural disasters.
AlyoshinE // Shutterstock
Some households have the option to choose the source and supplier of their electricity. Where wind or solar is available and compatible, customers may opt for these cleaner sources compared to fossil-fuel-generated electricity. Alternatively, getting set up with solar panels and other renewable energy sources will provide greater energy independence in the face of power outages from natural disasters.
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Skinny robot documents forces eroding Doomsday Glacier
Gaston Cerliani // Shutterstock
Climate change has already prolonged mosquito season by more than a month, with more mosquito days expected in the future. Mosquitoes thrive in temperatures between 50-95 degrees Fahrenheit and relative humidity of 42% or higher. An analysis of 239 sites across the U.S. revealed these conditions are becoming more common due to climate change. These changes bring an increased risk for the spread of mosquito-borne illnesses like West Nile virus. Some natural ways to repel mosquitoes as mosquito days increase include essential oils, witch hazel, and citronella.
Gaston Cerliani // Shutterstock
Climate change has already prolonged mosquito season by more than a month, with more mosquito days expected in the future. Mosquitoes thrive in temperatures between 50-95 degrees Fahrenheit and relative humidity of 42% or higher. An analysis of 239 sites across the U.S. revealed these conditions are becoming more common due to climate change. These changes bring an increased risk for the spread of mosquito-borne illnesses like West Nile virus. Some natural ways to repel mosquitoes as mosquito days increase include essential oils, witch hazel, and citronella.
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Skinny robot documents forces eroding Doomsday Glacier
A3pfamily // Shutterstock
Trees are stalwart defenders against climate change, particularly in urban heat islands, which often lose trees to housing and infrastructure development. Trees can mitigate the impacts of extreme heat by releasing water vapor and cooling the air around them, as well as shading the ground beneath them. Their absorbent roots reduce flooding and prevent soil erosion. Residents can seek out community planting or beautification organizations that plant and maintain trees in public spaces.
A3pfamily // Shutterstock
Trees are stalwart defenders against climate change, particularly in urban heat islands, which often lose trees to housing and infrastructure development. Trees can mitigate the impacts of extreme heat by releasing water vapor and cooling the air around them, as well as shading the ground beneath them. Their absorbent roots reduce flooding and prevent soil erosion. Residents can seek out community planting or beautification organizations that plant and maintain trees in public spaces.
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Skinny robot documents forces eroding Doomsday Glacier
AYA images // Shutterstock
Farmers are facing less reliable growing seasons due to climate change. Some have been forced to fallow fields because there isn't enough water to sustain their crops. In other parts of the country, too much rain is drowning young plants. Invasive species which thrive under extreme conditions are decimating the crops that do succeed. Supporting local farmers contending with these variables will not only keep the cost to consumers down but will also ensure growers stay in business. Community-supported agriculture groups exist across the country, and many communities and local co-ops sponsor regular farmers markets, where local farmers have direct access to the buying public.
AYA images // Shutterstock
Farmers are facing less reliable growing seasons due to climate change. Some have been forced to fallow fields because there isn't enough water to sustain their crops. In other parts of the country, too much rain is drowning young plants. Invasive species which thrive under extreme conditions are decimating the crops that do succeed. Supporting local farmers contending with these variables will not only keep the cost to consumers down but will also ensure growers stay in business. Community-supported agriculture groups exist across the country, and many communities and local co-ops sponsor regular farmers markets, where local farmers have direct access to the buying public.
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Skinny robot documents forces eroding Doomsday Glacier
Atstock Productions // Shutterstock
Getting involved at a hyper-local level through a homeowner or neighborhood association can position you to effect small but impactful immediate changes, initiate climate-centric conversations, and find a group of people working towards the same goal. HOAs often provide access to volunteering opportunities, as well as standardized maintenance protocols, which can mitigate the overuse of water and other resources.
This story originally appeared on Westfield and was produced and distributed in partnership with Stacker Studio.
Atstock Productions // Shutterstock
Getting involved at a hyper-local level through a homeowner or neighborhood association can position you to effect small but impactful immediate changes, initiate climate-centric conversations, and find a group of people working towards the same goal. HOAs often provide access to volunteering opportunities, as well as standardized maintenance protocols, which can mitigate the overuse of water and other resources.
This story originally appeared on Westfield and was produced and distributed in partnership with Stacker Studio.
