Climate change is a pressing issue that poses financial risks to various states in the United States due to a range of environmental events such as tornadoes, wildfires, hurricanes, flooding, landslides, lightning, and drought. These events can lead to significant damage to infrastructure, agriculture, and individuals. It is crucial for residents and business owners to consider these risks when planning financially, including factoring in historic and projected losses from environmental events.

SmartAsset recently conducted a study to identify the states that face the highest financial risks from weather-related events. The ranking was based on the total expected annual financial losses per person across all major environmental events, using data from the Federal Emergency Management Agency (FEMA).

Key Findings

• Louisiana tops the list with an expected annual loss of $556 per resident due to environmental damages. This is over 20% higher than the second-ranked state, South Dakota, where residents may face $456 in damages per person. Louisiana’s projected losses are primarily attributed to riverine flooding, coastal flooding, and hurricanes.
• Ohio and New York State are projected to experience the lowest financial damages from environmental events. Residents in Ohio may see as little as $64 in damages per person, while in New York State, the figure is $69. New York’s main risk factors include drought and heat waves.
• New Jersey has the highest risk of damage from coastal flooding per person, with residents potentially facing $68 in damages annually. Delaware follows closely behind with an estimated $23 in damages per person.
• The Dakotas face harsh winters, with South Dakota and North Dakota ranking second and sixth for the most projected damages per person. This is largely due to high projected damages from cold freezes, hail, ice storms, and strong winds. South Dakota also leads in projected damages from tornadoes.
• California residents are particularly vulnerable to drought and earthquake damage, with an expected loss of $335 per person due to droughts. Additionally, the state ranks sixth in projected damages per person from wildfires.
• Nebraska is projected to endure nearly double the hail damage compared to the second-ranked state, with residents potentially experiencing around $91 in damages per person.

These findings underscore the importance of being prepared for the financial impacts of climate change and extreme weather events. By understanding the specific risks faced by each state, residents and policymakers can take proactive measures to mitigate potential losses and build resilience against environmental challenges.