Exploring the Link Between Housing and Healthcare Costs and Weather Events

According to Financial Health Pulse® data collected by the Financial Health Network from April through June 2024, an estimated 9.47 million U.S. households reported that they experienced a natural disaster or severe weather event in the past year, such as a wildfire, hurricane, flood, extreme temperatures, or other natural event.^{1, 2, 3}

Over half (57%) of those who experienced a weather event in the past year reported that their household expenses increased in the past 12 months, compared with 40% of households that had not experienced a disaster in the past year, even when we controlled for a number of background characteristics, including household income, net worth, residential insurance coverage, race and ethnicity, region, urbanicity, and age.⁵ 

Household expenses can increase because of financial shocks, which include unexpected expenses like moving costs or an unanticipated medical bill, that a household has to manage in addition to its regular budget.⁶ Sometimes, these financial shocks can be triggered by a natural disaster or weather event.^{7, 8, 9, 10}

When asked about five different types of housing-related financial shocks, households that had lived through a weather event in the past year more often reported experiencing each of these five shocks, even when controlling for household income, net worth, residential insurance coverage, race and ethnicity, region, urbanicity, and age (Figure 1). Although our data isn’t causal, our findings confirm prior research showing that households that experienced a natural disaster can face property damage or may need to move to a new home, apartment, or residence.¹¹ 

Figure 1. Households that experienced a weather event in the past year more often experience a housing-related financial shock.
Percentage of households that experienced a housing-related financial shock, by whether they experienced a weather event in the past year.

Note: * Statistically significant relative to those who did not experience a disaster (at p < 0.05). All findings are significant when we control for household income, net worth, residential insurance coverage, race and ethnicity, region, urbanicity, and age. Data from 2024 Financial Health Pulse® survey.
(1): N = 6,669, comprising households for whom we have complete information on race, age, net worth, income, residential insurance coverage, census region, and county or Metropolitan Statistical Area (MSA) of residence, and who responded to the eight financial health indicator questions.
(2): For our analysis of the cost of homeowners insurance coverage, we further limit the sample to homeowners with homeowners insurance, which has a sample size of 4,306.

We also investigate additional housing-related shocks that are not as commonly studied, but can still generate costs for households. For instance, utility disruptions or boil water notices can generate expenses such as needing to purchase bottled water or replace spoiled food. These shocks were more commonly reported by households who had experienced a weather event in the past year, with over half (54%) indicating that they lost power, running water, or heat in their home for six or more hours. While being told to boil water for public health reasons was less common, those who had experienced a natural disaster in the past year reported this housing-related shock four times as often as households that had not experienced a weather event (16% vs. 4%).

In addition, insurance providers may increase the cost of coverage for those who experienced a recent weather event.¹² Our findings confirm that an increase in the cost of homeowners insurance coverage was more commonly reported by households that had experienced a weather event in the past year (28% vs. 21%). This raises concerns that consumers may drop their insurance or seek out lower-cost plans with less coverage in an attempt to manage household expenses, especially since prior Financial Health Network research shows that cost may be a barrier to carrying residential insurance.¹³

Housing shocks are not the only type of unexpected expense that households face in the aftermath of a disaster. Unanticipated health-related costs are also cause for concern. Previous work has hypothesized that weather events – including hurricanes, extreme heat, flooding, and wildfires – can exacerbate existing health issues and lead to new injuries, physical and mental health concerns, or even death.^{14, 15, 16} Other work has estimated the considerable health-related costs that can be attributed to specific weather events.¹⁷ 

Pulse data indicated that three specific health-related shocks were reported at least twice as often by those who also experienced a weather event in the last 12 months, even after taking into account household income, net worth, residential insurance coverage, race and ethnicity, region, urbanicity, and age (Figure 2).

Figure 2. Households that experienced a weather event in the past year experienced three health-related financial shocks at least twice as often as other households.
Percentage of households that experienced a health-related financial shock, by whether they experienced a weather event in the past year.

Note: * Statistically significant relative to those who did not experience a disaster (at p <0.05). All findings are significant when we control for household income, net worth, residential insurance coverage, race and ethnicity, region, urbanicity, and age. Data from 2024 Financial Health Pulse® survey. N = 6,669 respondents for whom we have complete information on race, age, net worth, income, residential insurance coverage, census region, and county or Metropolitan Statistical Area (MSA) of residence, and who responded to the eight financial health indicator questions.

Having an unexpected out-of-pocket medical expense or a major change in health or physical ability that limits daily activities was reported by over a quarter of households that lived through a weather event in the past year (30% and 27%, respectively). And while rare, households that experienced a disaster in the past year reported a death in their households over twice as often as households that had not experienced a disaster (7% vs 3%).

Since 2018, the Financial Health Network has conducted the Financial Health Pulse® research initiative. The Financial Health Pulse combines probability-based, longitudinal survey data with administrative data, with the goal of providing regular updates and actionable insights about the financial lives of Americans.

To see more of our Financial Health Pulse research, please visit our Pulse Research page.