How Rising Temperatures Across the U.S. Can Affect Your Insurance Policies

Average temperatures are on the rise throughout the entire country, which could result in property damage, adverse health effects and potentially even higher insurance premiums. As a result, it’s a good idea to take several steps to protect your home, car and health heading into the hot summer months.

Continue reading for a comprehensive overview of rising temperatures and insurance including what states are most affected by heat waves and what types of property damage can be caused by climate change.

Where Have Heat Waves and Higher Temperatures Been on the Rise?

Multiday extreme heat events have become increasingly more common and have lasted increasingly longer in every decade since the 1960s, with this trend being especially pronounced in California and southern states like Florida, Georgia, Louisiana and Texas.^[1] Meanwhile, average temperatures are getting consistently higher nearly across the board, as temperatures are expected to be higher than normal in at least a portion of 49 states during the summer of 2024.^[2][3]

North Dakota is currently the only state that is considered to have an equal chance of experiencing lower-than-normal and higher-than-normal temperatures across the entire state this summer, while a small portion of western Alaska is the only part of the country that is considered more likely to have lower-than-normal temperatures than higher-than-normal temperatures.^[2]

What Type of Impact Do Heat Waves Have on Your Insurance?

In general, if you file a claim for heat-related damage that is covered by your home or auto insurance policy, your premiums can go up. Even if you don’t personally file any claims, your insurer could raise your rates if a large number of people in your area file claims. As a result, steadily rising temperatures have the potential to cause home and auto insurance prices to increase more rapidly in affected regions.

See the below sections for examples of the types of heat wave damage that are likely to be covered by insurance to get a better understanding of how climate change could impact the insurance industry.

Home Insurance

Most homeowners insurance policies cover the structure of your home on an open peril basis, meaning damage that is directly caused by a heat wave such as cracked windows may be covered unless your policy specifically excludes coverage for heat waves. Conversely, your belongings are usually insured on a named peril basis and heat waves are not among the perils that are typically covered.

Your policy may also cover damage that is indirectly caused by record-breaking heat. For example, warm air near the surface of the earth contributes to the formation of thunderstorms and your homeowners insurance should cover damage from numerous storm-related perils including lightning, wind, hail and falling objects like trees.^[4]

You should note that, as a general rule, homeowners insurance only covers unexpected losses. So while your policy may cover sudden damage due to a heat wave, it likely won’t cover progressive damage caused by temperatures going up over time.

Car Insurance

Your car insurance policy may cover damage to your vehicle caused by extreme heat if it includes comprehensive coverage, which is a type of car insurance that covers most types of sudden vehicle damage from sources other than collisions. For example, your comprehensive insurance should pay for repairs if your car is burned by a wildfire.

However, heat-related damage that occurs gradually or could have been prevented with proper care generally isn’t covered. For example, you likely won’t be covered if your engine catches on fire because you forgot to refill your coolant before taking a summer road trip.

Health Insurance

Heat waves can lead to numerous adverse effects on human health that may require medical attention, from triggering deadly conditions like heat stroke to worsening existing conditions like heart disease, respiratory disease and diabetes.^[5]

That said, you should note that Marketplace health insurance functions differently from other types of insurance in that carriers cannot take your medical history into account when setting your premiums, which means that receiving medical care for heat-related ailments may not cause your insurance prices to go up in the same way that filing a home or auto insurance claim would.^[6]

Nevertheless, most life and health insurers require you to cover a portion of your own health care costs by paying copays or coinsurance even after meeting your annual deductible, so you will still end up spending more on health care if you need to receive medical services due to extreme heat more frequently.

How To Prepare for Heat Waves

To avoid spending more on insurance premiums and medical bills, you should take the steps outlined below in preparation for high temperatures and other climate-related risks this summer.

Your Home

Some of the steps you can take to keep the inside of your home cool during a heat wave include covering your windows with curtains or blinds, applying weatherstrips to the edges of your windows and doors and installing window reflectors that can keep heat out of your house.^[7] In addition, you should focus on your roof, attic and windows to prevent heat damage to your home, according to Marco Picano, co-owner of Picano Landscaping.

“To mitigate heat-related damage to your home, start by inspecting and retrofitting your roof and attic with reflective materials and proper ventilation,” Picano said in a message to SmartFinancial. “These areas are highly susceptible to heat buildup, which can warp shingles and deteriorate insulation. Adding heat-resistant window films and upgrading to energy-efficient windows can also reduce indoor temperatures and lessen the strain on your HVAC system.”

If your yard is big enough, another long-term strategy you could consider is planting trees that can limit the amount of sunlight that reaches your house and reduce urban heat through a process known as evaporative cooling.^[8]

Your Car

Regularly washing and waxing your car, purchasing seat covers and periodically testing your battery and checking your tire pressure can help protect your car from heat-related damage.^[9] Additionally, Picano recommends practicing basic car maintenance and taking steps to keep your car cool while it’s parked.

“Simple steps like using sunshades and parking in shaded or indoor areas can protect your car’s interior from direct sunlight,” Picano said. “High temperatures can damage dashboard materials and upholstery. Regularly check and maintain fluid levels, including coolant and motor oil, to prevent overheating.”

Your Health

Finally, to keep yourself safe from heat-related illness and lower the number of heat-related deaths, you should drink lots of fluids, seek shade if you’re outside and avoid high-energy activities or outdoor work that could cause you to sweat excessively during a heat wave.^[7] 

In addition, you should remember that fans merely circulate air rather than producing cool air, so it may be better to rely on your air conditioning system or take a cold shower or bath if you feel yourself overheating.^[7]