Nearly 10 million people living in 5.4 million homes have a high risk from rising sea levels and will be adversely impacted by climate change, according to a new report that takes data from U.S. Census tracts near the ocean and offers a narrower focus on at-risk properties.
The report was issued by vHome Insurance and released after President Trump’s official Paris climate treaty withdrawal last month.
New York-based vHome is owned by GridLex, a data analytics company focused on insurance, healthcare and other industry verticals.
vHome makes money through lead generation. The firm analyzes data on homes through the lens of climate change, energy conservation, sustainability and other trends that impact the home insurance industry, and then makes that data available to the public. When someone keys a web search and is brought to the firm’s website, they see a lead form to fill out or are prompted to seek an insurance quote.
Several agents are paying for leads through quoting forms on the site. The firm also works with carriers via advertising exchanges. Quotes are delivered from an advertiser, and users can contact carriers or agents.
The vHome climate report uses sources including Census data and sea-level rise data from the National Oceanic and Atmospheric Administration.
According to Nikhilesh Rao, CEO and founder of GridLex, currently the only publicly available data to shed light on the direct impact of rising sea levels on U.S. communities is a Census designation that determines whether counties are considered to be coastal.
However, just because a county is designated as coastal does not mean that all places within the county are adjacent to the coast and that they could be impacted by rising sea levels. The report’s authors studied the Census tracts within these designated coastal counties and analyzed which tracts were adjacent to the coast or ocean and what places those tracts belonged to. They further mapped the population and housing units on those census tracts.
“There are 2,800 or 3,000 counties in America, and some portion of them are designated coastal counties,” Rao said. “From those coastal counties, we applied a bunch of algorithms to figure out what was actually close to the ocean and what was adjacent to the ocean. From there, we did a manual review to say, ‘OK, this is generally related to the coast, adjacent to the ocean or not.”
Another step authors of the report took was to eliminate false positives, such as properties adjacent to a lake or a river and not directly in the path of sea-level rise.
“We manually coded some of them to be really next to an ocean. Then we said, ‘If another Census tract is not next to a Census tract which is next to an ocean, then it’s a lower probability of it being next to an ocean,’” Rao said.
The report shows there are 9.7 million people living in 5.4 million homes in these 2,592 census tracts.
Rao was surprised by how many homes were at risk.
“We didn’t realize the density of population within those counties,” he said.
Rao said he doesn’t believe insurers realize precisely how much risk is out there from the threat of sea-level rise.
“The catastrophic risk that should be priced in with the rising sea levels, my intuition tells me it’s not being priced into home insurance,” Rao said.
The report shows that the top U.S. state with Census tracts next to the ocean is Florida, with 547 tracts and 1.9 million people living in 1.2 million homes. That is followed by California (325 tracts, 1.3 million people in 635,571 homes). The next three states on the list are Washington (190 tracts, 798,461 people in 391,979 homes); New York (198 tracts, 756,890 people in 352,047 homes); and Maryland (130 tracts, 531,959 people in 268,476 homes).
Cities that top the list with populations next to the ocean include New York, N.Y. (362,520); Seattle, Wash. (100,776); San Francisco, Calif. (80,971); Corpus Christi, Texas (77,985); and St. Petersburg, Fla. (72,993).
Rao thinks the takeaway for Joe Public, if he were to understand the actual risk, should be shock and possible action.
“I’m surprised they’re not out on the streets and protesting,” he said. “This is the front line. This is the war zone. I’m surprised that people are not making such a big deal of it. This is their lives. This is their homes. This is their livelihood. This is a neighborhood. This is the communities.”
He added: “There are almost 10 million people that are totally adjacent to the ocean, the front line,” he said. “Ten, 20 years from now, this could be bigger than the subprime market.”