As climate-driven hazards accelerate, a dangerous structural misalignment has emerged: What building codes deem legally permissible to construct is increasingly at odds with what catastrophic risk models deem financially viable to insure.
As long as building codes lag behind climate realities, private insurance markets will continue to dictate local safety standards by default. Resiliency Codes offer a clear, actionable strategy to change this dynamic.
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In this edition:
- Feature: We explore the implications of a household’s adaptive capacity, or the ability to plan for and respond to the impacts of extreme weather. - In the news: How are utilities preparing for a ‘historic’ El Niño? - From the archive: How resilience districts give local governments a new financing mechanism to fund climate adaptation.
As insurance premiums rise nationwide, the households bearing the largest increases aren't necessarily the most vulnerable. The ones most at risk are the ones with the fewest options when things go wrong.
On paper, wealthy homeowners bear the heaviest insurance burden. Between 2018 and 2022, average annual premiums in high-wealth, high-risk ZIP codes increased by over 10%, or $204—nearly four times the increase in the most economically vulnerable communities.
But a new Brookings Institution analysis suggests that it's the wrong number to watch. The households absorbing the largest dollar increases are also the most able to respond: by fireproofing, relocating, or upgrading to better insurance coverage.
In communities where incomes and home values are lower, households that are absorbing smaller increases tend to have fewer options. When insurance gets too expensive, they go without. And going without insurance, in a time when disasters are getting more frequent and destructive, can widen the nation’s wealth gap.
A household's ability to respond matters as much as its exposure
Using Treasury Department data on homeowners’ insurance from 2018 to 2022—combined with FEMA's National Risk Index and Census Bureau data on income, home values, and race—Brookings researchers mapped which zip codes are bearing the heaviest burden from rising premiums and nonrenewal rates.
Their research centers on a concept called adaptive capacity, or the ability of a household or community to plan for and respond to the impacts of extreme weather.
Brookings sorted U.S. zip codes into four categories based on climate exposure and the resources households have to respond. Eight percent are low-risk and well-resourced. Eighteen percent are "adaptable"—high exposure, but with the financial capacity to respond. Another 18% are "vulnerable"—high exposure, low resources.
But the most policy-relevant finding is the largest group: the 54% of zip codes classified as simply "at risk." These households span a wide range of incomes and hazard exposures, but they are at risk of quietly going uninsured.
Insurance market instability is a function of a community’s adaptive capacity, its exposure to hazards, and underlying disparities in access to homeownership. Consider California: the communities throughout the state at greatest financial risk from the insurance market's retreat are often the same ones that have historically faced barriers to homeownership. Housing resiliency and housing affordability converge in the same zip codes, which means the policy response should as well.
The maps where adaptive capacity is lowest and where the consequences of going uninsured are highest largely overlap, pointing toward policies such as strengthening federal infrastructure programs like FEMA’s Building Resilient Infrastructure and Communities (BRIC), requiring parcel-level climate risk disclosure so households can make informed decisions, updating land use rules to reduce future hazard exposure, and building pricing mechanisms that link risk mitigation to insurance premiums.
How Are Utilities Preparing for a ‘Historic’ El Niño? | Latitude Media | With forecasters warning that a potentially record-strength El Niño could emerge this year, U.S. utilities are shifting into scenario-planning mode. Rather than preparing for a single hazard, companies are bracing for overlapping risks: heat waves, wildfire conditions, coastal flooding, and strained power demand.
Firefighting Departments Close in Some US States Amid Lack of Volunteers | The Guardian | Volunteer firefighters still make up roughly two-thirds of the U.S. fire service, but shrinking participation is forcing departments to shut down. In New York, fire officials think that providing “nominal compensation” to volunteers could turn the trend around.
Read more about resilient public infrastructure and government solutions on The Epicenter here.
The Huge, Untapped Potential of Planting Rooftop Gardens in Cities | Grist | According to Grist, buildings around the world are overlooking a tool for both resilience and adaptation: rooftops. A new report argues that green roofs and living walls can cool urban heat islands, absorb stormwater, and boost biodiversity.
Read more about resilient real estate on The Epicenter here.
Private Investment
Backing the Builders: Announcing Elemental’s First Investments of 2026 | Elemental Impact | Elemental’s latest investment cohort includes wildfire-prevention firm BurnBot, which uses robotics to clear vegetation and conduct controlled burns that reduce hazardous fuel loads and help communities lower wildfire risk. Their equipment can remove vegetation far more quickly than manual crews while costing about half as much.
How Aligning Financial Strategies With Climate Finance Can Drive Resilient Growth | World Bank Blog | A World Bank analysis argues that financial inclusion and climate adaptation should be planned together. By aligning national financial inclusion, green finance, and disaster risk strategies, governments can expand tools like microinsurance, climate-smart lending, and social protection.
Read more about private investment on The Epicenter here.
Resilience Districts: Unlocking Tax-Increment Finance for Climate Adaptation | Matt Posner | Resilience districts give local governments a new financing mechanism to fund climate adaptation, but their success depends on applying a forward-looking, risk-informed approach rather than defaulting to traditional bond financing logic.
Beyond the Rainy Day Fund: A New Model for a Fiscally Stressed Nation | Alexis Pelosi | States are seeing their emergency reserves shrink for the first time since the Great Recession. The path forward is a new, two-pronged pro-growth, pro-resilience model that expands the state’s economic base while simultaneously modernizing the financial tools used to protect it.
Should Wood Be a Public Utility? | The Epicenter Editors | Treating wood as a public utility, rather than a waste product, could reduce fire risk, support insurer re-entry, and unlock economic value that currently goes up in smoke.
The Statistic of the Week
100%
Between 2014 and 2024, 100% of the 100 worst power outages in the central U.S. were caused by extreme weather. Source: Union of Concerned Scientists
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The Epicenter helps decision makers understand climate risks and discover viable resilience solutions. The Epicenter is an affiliated publication of The Resiliency Company, a 501(c)3 nonprofit dedicated to inspiring and empowering humanity to adapt to the accelerating challenges of the next 100+ years.
As climate-driven hazards accelerate, a dangerous structural misalignment has emerged: What building codes deem legally permissible to construct is increasingly at odds with what catastrophic risk models deem financially viable to insure.
As long as building codes lag behind climate realities, private insurance markets will continue to dictate local safety standards by default. Resiliency Codes offer a clear, actionable strategy to change this dynamic.
RSG 3-D's non-combustible panel system offers a financially competitive alternative to conventional construction that delivers wildfire, earthquake, and hurricane resilience.
The housing affordability crisis and the wildfire crisis aren't distinct challenges. They're a self-reinforcing cycle that requires investing in resilience to break.
