Before buying a home, check this hidden financial risk

• The climate crisis is an often hidden financial risk when buying a home.
• Some online tools can help you assess this risk and potential costs per address.

If you’re buying a home, you’re probably thinking and planning for your future.

Here’s the thing though: at the end of a 30-year mortgage, you’ll be living on a pretty different planet.

Even if companies and governments around the world make some drastic changes—and that’s a big “if”—humanity’s carbon emissions are already locked into further warming for decades to come. This means more intense and sometimes more frequent floods, wildfires, hurricanes, winter storms and other forms of extreme weather.

You and your home could suffer everything from headaches and decreased property values ​​to giant bills and life-threatening events.

That’s why it’s important to take stock of the climate risks your home faces in the coming decades.

It’s impossible to know exactly what will happen, but some online tools can give you an idea of ​​the risks, as well as the costs you might incur and what you can do about it, depending on the home you buy.

Know the possible damages

America’s most popular real estate website, Zillow, has a new feature to look at the future climate potential of each listing.

The new ‘climate risks’ tool shows how many days of extreme heat and unhealthy air quality a property is expected to see over the next 30 years, assuming humanity is on track to stabilize climate change for 2100 The tool also shows the likelihood of more destructive events: floods, wildfires and windstorms.

Those assessments come from First Street, a former nonprofit that this year became a for-profit company, which uses computer models to quantify certain weather and climate risks for individual properties. First Street says it incorporates the specific structural features of a building as well as local infrastructure such as roads and utilities.

“If you don’t take stock of climate risk specifically, you could be in over your head,” Jeremy Porter, head of climate implications research at First Street, told Business Insider.

For example, if the cost of flood or wildfire insurance rises as it already has in places like Florida and California, “all of a sudden the family budget doesn’t make sense for the property you bought “, he said.

The new Zillow tool also makes insurance recommendations based on First Street’s analysis.

To dig even deeper, you can go to First Street’s website and get a free trial of their paid service, which shows estimates of how much a flood or fire could cost you, expected cooling costs, and price projections for insurance You can also change certain renewals to see how they affect these costs.

Remember that these estimates are not a crystal ball

However, climate science experts outside the company have some reservations about First Street’s flood and wildfire estimates.

Michael Wara, a senior research fellow at the Stanford Woods Institute for the Environment, told Heatmap News to take First Street’s calculations with “many grains of salt.”

Heatmap reported that First Street likely underestimates wildfire risk in wildfire-prone areas and that flood risk is very difficult to accurately model. You can try to cross-check the flood risk with other sources, such as whether the city or town has flood maps available.

“All we offer are probabilistic estimates of risk,” Porter said.

“I think in general the models give you a good indication of which properties are riskier than other properties,” he added.

Next, check your local building codes…

Once you know the climate risks, you can assess how well a property is built to withstand them.

A good indicator of this is the local building code and whether the home is built to their standards. The Federal Alliance for Safe Homes has a tool to check at inspecttoprotect.org.

FLASH not only rates the local building code, but the tool also displays information about the area’s past natural disasters and suggests improvements.

… and consider reforms

In the FLASH tool, you can select the year a house was built to see which renovations would make it stronger against different natural disasters. Each upgrade has a cost and impact rating.

Taking matters into your own hands could make a big difference because, according to the Federal Emergency Management Agency, only about a third of US jurisdictions have adopted updated codes to match their natural hazards.

Even then, building codes are often designed to protect the lives of people inside the home, but not necessarily to avoid costly property damage.

“You have to have at least a good building code, but this is a starting point. It’s not your gold standard, it’s your minimum,” Leslie Chapman-Henderson, president and CEO of FLASH, told BI.

In some cases, renovations and improvements can even help lower insurance costs.