A different kind of perfect storm had hit the Pelleys: volatile weather, a country failing to keep up with rising flood risk and a mortgage industry writing loans without considering the future of the environment around the home. Homeowners in Florida and California have already been trying to reconcile their mortgage duration and dwindling insurance options with neighborhoods that may not live to see 30 years. In a nation where long-term loans are the gateway to homeownership for most families, climate change is rewriting the basic assumptions about risk.
The lending industry relies on insurance to absorb some of the risk of mortgages failing. And the insurance industry is largely predicated on the idea that if a home is damaged or destroyed, a comparable structure should be rebuilt on the same spot. This model will have trouble accommodating land changed beyond recognition, no longer able to host a dwelling.