States With the Most Climate Risk Today

When it comes to climate change, one significant issue homeowners face is the increased risk of damage from inclement weather and natural disasters like earthquakes, hurricanes, tornados and floods. While these hazards vary based on location, some states have more climate risk than others.

MoneyGeek analyzed the Federal Emergency Management Agency’s (FEMA) National Risk Index dataset to assess the climate risks homeowners could face in every state. Our analysis breaks down climate risk for each state by expected per capita loss, expected total loss and greatest potential climate hazard. MoneyGeek also calculated the percentage of each state’s total expected climate losses due to building losses, injury and loss of life and agricultural losses. Here’s what we found.

• Louisiana has the highest expected natural disaster losses per capita of any state, with damages estimated to cost each resident $246; property damage constitutes 67% of all estimated climate-related losses in the state.

• Texas has the highest expected losses due to injury or death caused by natural disasters at $1.1 billion annually.

• California has the highest expected losses to property damage at $4.6 billion annually, with earthquakes expected to be the most costly natural disaster in the state.

• Earthquakes pose the most annualized natural disaster risk in the United States overall. Despite occurring less frequently than tornadoes and hurricanes, their potential for damage is significantly higher.

It’s crucial that homeowners understand the climate risks that pose a threat to their area. These risks can impact personal finances, home insurance coverage and emergency preparedness plans.

To find the states with the most climate risk per capita, MoneyGeek analyzed natural disaster data gathered by FEMA and estimated the cost of climate-change-related damage for each resident. We ranked the 15 states with the most climate risk per resident below.

MoneyGeek found that earthquakes, tornadoes and riverine flooding are the top three most expensive climate risks in the United States. However, some states bear more of the cost of damages from these natural disasters than others.

The following definitions are key to understanding the risks that each type of weather emergency represents:

• State With Greatest Risk Overall: These are the states with the largest total expected losses due to each type of hazard.
• State Loss as % of National Loss: Cost of damage the state is expected to incur due to that natural disaster as a percentage of the total national cost of the natural disaster type.
• State Expected Annual Loss: Cost of damage that the natural disaster is expected to cause in the state.
• National Expected Annual Loss: Cost of damage that the natural disaster is expected to cause nationally.

After gaining a better understanding of the climate risk in their area, it’s crucial that homeowners take steps to prepare for natural disasters before they happen.

Homes considered high-risk can be more difficult to insure in the voluntary insurance market. With the Fair Access to Insurance Requirements (FAIR) Plan, people who live in the worst states for climate change can get affordable homeowners insurance coverage through their state administrators. While these plans may be more expensive than private insurance, they limit homeowners' liability and offer coverage that wouldn’t otherwise be available.

Homeowners who aren’t sure if they have adequate homeowners insurance coverage can also use Ready.gov’s Insurance Coverage Discussion Form to work with their agents to protect their homes from climate risk.

Renters who want to protect their personal belongings can also benefit from a high-quality renters insurance policy. Purchasing this coverage can mitigate possible losses in the states with the worst climate change risk.

MoneyGeek analyzed data from FEMA’s National Risk Index datasets to calculate and compare annual expected losses from climate-related disasters for each state. To calculate per capita risk, MoneyGeek utilized 2022 population estimates for each state using data from the United States Census Bureau.

MoneyGeek’s full data set provides a high-level understanding of the study results. Our state-by-state analysis paints a picture of the country’s overall climate risk and offers perspective on the states with the highest risk of natural disasters.

The table below uses the following terminology to evaluate climate risk across the country:

• Expected Loss per Capita: Total expected losses per person based on population size and greatest potential hazards.
• Annual Expected Loss (Millions): A forecast of how much natural disasters will cost each state in one year.
• Greatest Potential Hazard: The hazard that represents the largest expected loss for each state.
• % Building Loss: The percentage of the state’s Annual Expected Loss associated with building damage and destruction.
• % Life Loss: The percentage of the state’s Annual Expected Loss associated with injury and loss of life, using a FEMA-determined value of statistical life of $7.4 million.
• % Agricultural Loss: The percentage of the state’s Annual Expected Loss associated with loss of agricultural production.