Environmental activists have sounded alarm bells about a climate crisis for decades. Now, home insurance companies are issuing similar warnings.

Under worldwide warming conditions, hurricanes in the United States would be not only more frequent, but more intense. That’s according to a peer-reviewed study by the global re/insurance company MS Amlin, based on an AI-powered climate model. According to their predictions, the whole country would expect an approximately 25% increase in insured losses from a given severe event, but in the Carolinas, that increase would spike to 40%.

The MS Amlin analysis shows that the impacts of hurricane damage are regionally specific, and will worsen under climate change. Their results could suggest that insurance premiums will become more expensive for consumers.

Some advocates say up-to-date building codes can help mitigate the costs for homeowners in both scenarios. But, North Carolina homes utilize energy codes from 2009, according to Kim Wooten, a senior engineer and certified building commissioning authority working on energy efficiency and sustainability.

“You wouldn’t buy a car with 2009 safety features. You wouldn’t buy an iPhone that was manufactured in 2009,” said Wooten. “Home buyers assume when they’re buying a home, they’re getting (a) safe, efficient home. They have no idea.”

Wooten says that not only are codes out of date, but the state legislature has put up blocks to prevent counties and towns from enforcing more recent standards.

Two years ago, House Bill 488 was passed in North Carolina, forbidding local governments from inspecting that new homes be built with sheathing – the structural reinforcements in walls that help them withstand strong winds and stay insulated. Such legislation makes it difficult for homebuyers to ensure that their property has up-to-date codes, according to Wooten.

In North Carolina, it can cost between $3,000-$5,000 to hire a private inspector to evaluate the resilience of your house, according to Wooten.

Wooten was on the council that tried to update sections of the state building code, a move that was eventually blocked by House Bill 488. Leading the opposition was the homebuilding industry. Builders asserted that updated codes would make homes too expensive for buyers. WFAE previously reported that the Home Builders Association asserted that the cost to build an average single family home would increase by $20,400, if building codes were to be updated.

This figure has been disputed, but it’s generally agreed that higher standards come with higher front-end construction costs. However, advocates for higher standards say having updated building codes can have downstream financial benefits for homeowners.

A home is often a person’s largest investment, and insurance is its frontline protection in the case of disaster. There is precedent for how updated codes have resulted in lower insurance rates in places like Alabama, where insurance companies paid for at-risk homes to install fortified roofs.

That’s according to Gregory Characklis, a professor in the Department of Environmental Sciences and Engineering at UNC-Chapel Hill, and the director of the UNC Institute for Risk Management and Insurance Innovation. He was not involved with the MS Amlin study or the Building Code Council.

Speaking about roof fortification programs, Characklis said, “There’s a strong case to be made that the cost of the reinforcement is actually lower than the higher insurance premiums that they (homeowners) would pay.”

In Alabama, those who updated their roofs reported 56% less damage; of the damage that was reported, it was less costly to repair.

Characklis also said that some of the findings in the MS Amlin study could point to how insurance premiums would rise as climate change-induced hurricanes become more frequent and severe.

The study found that if the earth warmed by 0.9 degrees Celsius more than the temperatures today, then hurricanes would increase in severity and intensity. In that scenario, the researchers suggest that the expected cost of damage to insured property nationwide will increase by 40%. And, in a 200-year storm scenario, insurance companies will have to have 26% more funds in order to cover their policy holders.

These two indicators are called Average Annual Losses and Aggregate Exceedance Probability, respectively. Characklis says that these indicators are often used by re/insurance companies to determine premiums. For example, an increase in the dollar amount of AAL due to property damage means that an insurer would need more capital to cover the losses, which they could get by raising premiums.

That said, the figures from the MS Amlin study should not be interpreted as deterministic of future hikes in insurance premiums. Other human geography factors such as changes in population size and density also impact those figures, according to Characklis.

At its core, the study shows that climate change will exacerbate property damage. The authors recommend adopting better building codes in the most affected areas, such as the codes adopted in Gulf states.

The study also attempted to model the impacts of weather events by region. They found that the Northeast will suffer the greatest changes in average annual losses relative to current insured losses. States like Rhode Island, Massachusetts, and New Hampshire would experience damages that are over 70% more costly in the climate change scenarios that MS Amlin built.

In North Carolina, Wooten recommends that homebuyers explicitly ask for their homes to be built to more up-to-date residential codes. She named IECC 2021 specifically.

“You have an immediate financial benefit,” she said, because the energy codes within are more efficient than the 2009 standards. It will also have better thermal comfort and mold protection.