Can you Make Your own Insurance Policy for Climate Change?
“What happens when there’s no more water?”
My friend asked it casually, almost offhandedly, during a playdate at our neighborhood park. Our kids were climbing, chasing, laughing — unaware that we were both watching the clear skies in a different way. It was 2014, and California was only beginning to realize that what we’d been calling “an unusually dry stretch” was in fact a years-long megadrought gripping the entire western U.S.
Stories were surfacing about towns whose wells had already run dry, and the state was trucking in water. Other communities were placed on 90-day warnings, and everyone in California was asked to conserve. Showers were skipped, cars stayed dirty, and front lawns were sacrificed to the sun. Every other Thursday, I’d wake up and immediately check the latest updated U.S. Drought Monitor map, hoping to see a break. But instead, the red stain of “exceptional drought” only deepened and spread from south to north.
My daughter had just turned three, with no real experience of rain, and wouldn’t until after she turned five.
U.S. Drought Monitor, between February 4, 2014 and August 26, 2014. Map authored by David Simeral, Western Regional Climate Center. Source: National Drought Mitigation Center (NDMC), U.S. Department of Agriculture (USDA), and National Oceanic and Atmospheric Administration (NOAA).
Accessed via: https://droughtmonitor.unl.edu
Reframing Risk: Climate Through a Financial Lens
My friend didn’t ask the question — “What happens when there’s no more water?” — expecting an answer, but the question stuck with me, buzzing in the back of my mind. As a financial advisor, I spend my days helping people think practically and non-emotionally about risk. We talk about how to buffer volatility — through cash reserves, through diversification, through long-term perspective. And I started to wonder: could those same principles be applied to climate change? Could we build a strategy that acts like an insurance policy for a future that’s becoming harder to predict?
I believe we can.
Real Estate Was My First Lever
Diversification is one of the most powerful tools we have. Think of your primary residence as a concentrated investment in a single asset — one property, one location, one climate exposure. By expanding into other forms of real estate, whether through buying investment properties or investing in Real Estate Investment Trusts (REITs), you can spread that risk across multiple holdings. It’s an immediate step toward insulating your financial life from the growing volatility of one place.
I grew up in a family where real estate was the family business. After my father passed away when I was very young, my mother took the small amount of money she had and bought a handful of houses near the University of Michigan where my dad had been a professor. She fixed them up and rented them to students. “I knew I could take care of a house,” she used to say— and she did. My brother and I tagged along, helping in the ways that kids can: pulling weeds, trimming bushes, painting, cleaning, repairing screens, and caulking woodwork. At the time, my mom wasn’t much older than the tenants she rented to, and it wasn’t unusual for her to invite them over for dinner. When a kitchen fire damaged one of the homes, the four students living there moved in with us and stayed until their lease ended. That’s just how it worked.
When my stepdad came into the picture, they expanded the business together — managing additional properties, taking on large-scale renovations, and renting to hundreds of students per year. Every fall and spring, groups of students would cycle through our living room to sign leases, the rhythm of the business woven into the seasons. I spent my summers working on the houses — there was always something under renovation — and it was good, honest, exhausting work.
So it’s no surprise that establishing rental properties in a climate-safe haven felt like the natural next step toward diversifying my real estate holdings. This investment serves multiple purposes: because these properties are located in a different region than where I now live, they help spread the risk of acute climate hazards—like floods or wildfires—across my total real estate portfolio. And if my California home were to decline in value due to prolonged drought, persistent smoke, or the erosion of insurance coverage, it’s possible that my Midwest holdings could appreciate, precisely because those risks are significantly less prevalent there.
Building a Multi-Layered Plan
But those properties are only one part of a broader strategy.
I have collaborated with a Natural Resources Economist from Montana State to build science-based strategies for mitigating risk, and to pinpoint optimal regions across the US to invest in. At the same time, I am also working with best-in-class portfolio managers who eat, sleep, and breathe sustainable investing. Together we’ve created a comprehensive financial strategy that includes:
Fortifying your primary residence with things like solar panels, a heat pump, battery backup, air scrubbers and energy-efficient windows and doors
Ensuring adequate insurance coverage that reflects today’s rebuild costs.
Reinforcing vulnerable structures to better withstand earthquakes and securing comprehensive earthquake insurance coverage to match the risk.
Reducing carbon exposure in portfolios to avoid stranded assets as the world moves away from fossil fuels.
Proactively investing in climate adaptation through clean energy, global water solutions, and next-generation building materials.
Directing charitable and impact investment dollars toward strengthening the diverse communities and ecosystems surrounding your real estate investments.
A Framework for Action
Taken together, these strategies offer peace of mind in a time of uncertainty—and more importantly, they provide a framework for action. Climate change isn’t something we can opt out of, but we can face it with intention. By aligning our financial lives with resilience, adaptability, and impact, we build more than just security—we build a future we can live with.
If you’re ready to start shaping your own climate resilience strategy—through real estate, investments, and practical financial planning—I’d love to help.
DISCLOSURE: The foregoing content reflects the opinions of Insight Personal Finance, LLC and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct.
All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful.
