States With the Most (And Least) Climate Risk Today

When it comes to climate change, one significant issue homeowners face is the risk of natural disasters. While hazards vary based on location, some states are more likely to be impacted by these destructive events than others.

MoneyGeek analyzed Federal Emergency Management Agency (FEMA) data on climate risk to illustrate the current climate risks that homeowners face and determine the states most and least impacted by natural disasters today.

• California has the largest annual natural disaster risk, with annual expected losses of $6.8 billion. Populous states Texas and Florida had the second and third-highest annualized risk, respectively.
• South Dakota has the highest per capita risk, with an annual expected loss of $271 per person. Comparably, the lowest risk per capita state — Rhode Island — has annualized expected losses of $15 per person.
• Louisiana has the fourth-highest annualized risk despite having the 25th largest population, driven by significant hurricane risk.
• Earthquakes pose the most annualized natural disaster risk in the United States. Despite lower frequency 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, insurance coverage and emergency preparedness plans.

To find the states with the most and least climate risk, MoneyGeek analyzed natural disaster data gathered by FEMA. We assessed annual expected losses, expected loss per capita and the greatest potential hazards in each state.

Known for earthquakes — and more recently, wildfires — California has the most climate risk of any state. California's expected annual loss per capita is $183, but the state’s expected annual losses are $6.8 billion. Trailing after are Texas and Florida, both with hurricanes as their most significant climate risk.

Rhode Island is at the top of the list of states with low climate risk, with $16 million in total expected losses and $15 lost per capita. Next on the list is Washington, D.C., where strong winds are expected to cause $28 in losses to each resident and $17 million to the state. In third place is Vermont, whose riverine floodings are expected to result in $40 in annual losses per person and $25 million for the state.

>> MORE: U.S. CITES WITH THE MOST CLIMATE RISK TODAY

MoneyGeek found that earthquakes, tornadoes and riverine flooding are the top three climate risks in the United States. California and Texas have the greatest overall risk of these hazards. However, Alaska (earthquakes), South Dakota (tornadoes) and Louisiana (riverine flooding) have more risk per capita.

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 With Greatest Risk Per Capita: Based on population size and greatest potential hazards, these are the states with the largest risk per person.
• # of States Greatest Risk: The number of states where this hazard is the greatest risk.
• % of National Risk: Each hazard’s expected national losses as a percentage of total expected losses.

As homeowners learn more about climate risks in their area, it’s important that they take steps to prepare for the possibility of natural disasters.

Homes that are 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 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 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 renters insurance. Purchasing this coverage can mitigate possible losses in the states with the worst climate change risk.

MoneyGeek's full data set provides a high-level understanding of the study results. Its state-by-state analysis paints a picture of the country’s overall climate risk. It also offers perspective on the states with the highest and lowest 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 Losses: A forecast of how much natural disasters will cost each state in one year.
• Greatest Potential Hazard: The hazards that represent the largest expected loss for each state.
• % Building Losses: The percentage of the Annual Expected Losses associated with building damage and destruction.
• % Life Lost: The percentage of the Annual Expected Losses associated with injury and loss of life, using a FEMA-determined value of statistical life of $7.4 million.
• % Agricultural: The percentage of the Annual Expected Losses associated with loss of agricultural production.

MoneyGeek utilized data from FEMA’s National Risk Index datasets to calculate and compare the annual expected losses for each state. To calculate per capita risk, MoneyGeek utilized the population as of 2016.