Climate change will lead to more and more intense storms. Staffan Moberg, climate adaptation expert at Swedish Insurance, believes that it is only a matter of time before insurance companies refuse to insure houses in areas that are exposed to floods and high sea levels.
This, in turn, can lower the value of the home, increase the mortgage interest rate and make it more difficult to get a home loan – because home insurance is a requirement to get a home loan.
More difficult for the bank
According to SBAB’s chief economist Robert Boije, the banking sector is currently looking at the issue, but no bank has put its foot down.
– In order for a home to be mortgaged, it is required that it is fully insured, in order for the bank’s security for the loan to remain in place should the home burn down. If the insurance companies refuse to insure certain areas, it will be more difficult for the banks to lend, he tells Ekonomibyrån.
The floods in Gävle and Dalarna in 2021 cost the insurance companies over SEK 1.6 million in damages.
This is how homeowners can be affected – hear Robert Boije and Staffan Moberg tell more in the clip above. Don’t miss Ekonomibyrån’s latest episode Expensive weather in SVT Play.