How Global Warming Increases Property Damage Risk
Global warming is one of the most pressing challenges of our time, reshaping not only the planet’s ecosystems but also our ways of life. Among its far-reaching impacts, the increased frequency and intensity of extreme weather events pose a significant risk to property owners worldwide. From coastal flooding to wildfires and urban heatwaves, climate change is amplifying the vulnerabilities of cities and regions. This article explores how global warming heightens property damage risks, examines specific examples, and provides actionable strategies to mitigate those risks.
Global Warming Is Leading to More Extreme Weather Events
Climate change, driven by rising global temperatures, is creating more frequent and severe weather events. Scientists have long warned that the accumulation of greenhouse gases in the atmosphere would destabilize weather patterns. Today, we see these predictions manifesting in devastating ways:
Rising sea levels are causing frequent coastal flooding, threatening infrastructure and communities.
Heatwaves are becoming more intense, triggering wildfires in regions previously considered safe.
Storms are intensifying, leading to flooding, mudslides, and unprecedented damage to urban areas.
The direct relationship between climate change and property damage is most visible during natural disasters. Storms now carry more water due to warmer oceans, which lead to ‘atmospheric rivers,’ while wildfires spread faster through increasingly arid landscapes. Homeowners are caught in the crossfire, with costly damages and no guarantees that it can’t happen again.
Over and Over, Current Infrastructure Fails to Protect Homes
Extreme weather events have revealed critical weaknesses in our infrastructure. Many cities, built for 20th-century climates, are ill-prepared for the challenges of a warming world. Let’s consider a few recent examples:
Southern Ontario Severe Snowstorm (2022): People in parts of southeastern Ontario, along Lake Ontario, continue to dig out after a storm with blowing snow and up to 100 km/h wind gusts walloped much of the region. Places like Hamilton and Toronto are most at risk of heavy snowfalls when winds come from the southeast and pass over Lake Ontario.
Quebec Floods (2024): Remnants of hurricane Debby dumped 173 mm of rain on Montreal and flooded homes. The floods in Quebec that hit the province in August now rank as the costliest insured event in Quebec history.
Jasper Wildfire (2024): In Canada, wildfires ravaged Jasper, Alberta, in one of the country's most visited national parks. Nearly half of the town was destroyed as hot, dry conditions created the perfect storm for flames to spread. This event illustrates the increasing risk of wildfires to communities located near forests or grasslands.
Vancouver Lower Mainland Flooding (2021): In a matter of days, extreme rain swamped rivers and farmland across southern B.C. and triggered mudslides that blocked every major highway connecting the Lower Mainland to the rest of the country.
Each of these disasters demonstrates the vulnerabilities in our existing infrastructure. As climate risks grow, the cost of maintaining and rebuilding properties in high-risk areas will escalate, leaving homeowners and governments struggling to adapt.
Property Climate Risk Scores
Climate risk ratings for homes are emerging as an essential tool for understanding how climate change could impact property values. Already being rolled out in the U.S. through platforms like ClimateCheck and Flood Factor, these tools assess risks such as flooding, wildfires, and extreme weather for specific addresses. They provide buyers and homeowners with vital information to make informed decisions and safeguard their investments.
However, these ratings could significantly influence home values—properties in high-risk areas may see declining demand and lower prices, while those in safer regions could become more desirable and expensive. As these tools expand into markets like Canada, they are expected to reshape real estate by integrating climate resilience into property valuation and decision-making processes.
Understanding the climate risk of your property is critical if you’re buying or already own a property.
How Climate Change Influences Property Ownership Decisions
For property owners, accepting the reality of climate change is not merely a philosophical shift—it’s a practical necessity. How we approach buying, selling, and maintaining real estate must evolve in response to new risks. Here are three key considerations for property owners:
Understanding Vulnerabilities: Climate risks vary significantly by region. Coastal areas may face rising seas and storm surges, while inland cities could struggle with droughts, heatwaves, or wildfires. Knowing the specific risks of an area is essential when making property decisions.
Evaluating Insurance Coverage: While insurance can provide a safety net, coverage for climate-related risks is becoming more expensive and less comprehensive. Insurers may withdraw coverage altogether from high-risk areas, leaving homeowners financially exposed.
Long-term Value: Properties in high-risk areas may lose value as buyers become wary of climate-related dangers. Conversely, homes in safer locations could see demand—and prices—rise. Whether we believe our home is vulnerable or not, the introduction of property climate risk scoring means that property values and insurance costs will undoubtedly be influenced by the risk rating agencies.
A Deep Dive on Four Canadian Cities
Canada is not immune to the impacts of global warming. While the country has historically been considered a haven due to its temperate climate, its cities are increasingly vulnerable to climate change.
Vancouver
Vancouver, located on Canada’s west coast, faces a dual threat: rising sea levels and extreme rainfall. Coastal neighbourhoods like Kitsilano and Richmond are particularly vulnerable to flooding, while the city’s mountainous terrain makes it prone to landslides during heavy rains. The region’s reliance on hydroelectric power also exposes it to reduced snowpack and glacial melt risks.
Calgary
Inland cities like Calgary are no safer. Known for its picturesque foothills and proximity to the Rocky Mountains, Calgary faces increasing risks from wildfires and flooding. The 2013 floods, which caused billions in damages, served as a wake-up call. The Bow and Elbow Rivers remain high-risk zones for property damage during heavy rains.
Toronto
Toronto, Canada’s largest city, contends with heatwaves and flash floods. Aging infrastructure, including outdated sewer systems, struggles to manage the intense rainfall that has become more frequent in recent years. Flood-prone areas like the Don Valley Parkway and waterfront neighbourhoods are particularly at risk. The lake effect might also result in fiercer winter snowstorms.
Montreal
Montreal is facing both flooding from rising waters in the St. Lawrence River and urban heatwaves exacerbating the heat island effect. Older buildings, common in this historic city, are particularly vulnerable to extreme weather. Low-income neighbourhoods are often the hardest hit, lacking the resources to adapt to changing conditions.
Overview of Strategies to Avoid Climate-Change Property Risk
While the challenges are significant, there are steps property owners can take to reduce their exposure to climate risks. Here are three key strategies:
1. Research Your Area for Vulnerabilities
The first step in protecting your property is understanding the risks. Tools like flood maps, wildfire hazard assessments, and climate projections can provide valuable insights into your area’s vulnerabilities. Local governments and insurance companies often offer resources to help homeowners evaluate risks.
2. Buy a Property Climate Risk Report
they might be hard to find these days in Canada, but they will become more common. You’re about to invest hundreds of thousands of dollars in a home, and a climate risk report could save you from significant losses in the future.
3. Avoid Vulnerable Locations
When purchasing property, prioritize locations that are less susceptible to climate-related damage. Avoid low-lying coastal areas, floodplains, and zones with high wildfire risk new wild grasslands and forests. While properties in high-risk areas may be more affordable in the short term, the long-term costs of damage and repairs can far outweigh the initial savings.
4. Weigh the Costs of Moving vs. Making Your Home Disaster-Resistant
For those already living in high-risk areas, the choice often comes down to relocating or retrofitting. Disaster-proofing measures, such as elevating homes, installing fire-resistant materials, or upgrading drainage systems, can be costly but may be more affordable than moving. However, relocation offers a long-term solution that eliminates ongoing risks.
5. Beware of Insurance Limitations
While insurance may currently cover climate-related damages, there’s no guarantee that policies will remain the same in the future. As risks increase, insurers may withdraw coverage for certain types of damage or raise premiums, leaving homeowners vulnerable. Proactively reducing your risk can help ensure continued coverage.
This has a knock-on effect on your mortgage. Your lender requires home insurance, and if your home becomes uninsurable, you might lose your ability to get a mortgage. Lenders might also start charging higher mortgage rates for properties with higher risk scores or refusing to finance properties that are at highest risk.
Your Next Steps
Global warming is reshaping the property landscape, creating challenges for homeowners, cities, and insurers alike. As extreme weather events become more frequent and severe, it is crucial for individuals to understand and adapt to these new realities.
Stay informed, make strategic decisions to protect your property investments, and take proactive measures. Property owners can reduce their exposure to climate-related risks and protect their investments in an uncertain future.
