---
title: UMD Risk Study Helps Maryland Homeowners Prepare for Weather Extremes
date: 2023-05-09T05:30:00-04:00
author: University of Maryland
canonical_url: "https://today.umd.edu/umd-risk-study-helps-maryland-homeowners-prepare-for-weather-extremes"
section: Articles
---
# UMD Risk Study Helps Maryland Homeowners Prepare for Weather Extremes

*May 9, 2023* — by [Carrie Handwerker](/author/carrie-handwerker)


> Growing Financial Threat of Climate Spurred Business Researcher’s Index

*18147828174920 1920x1080 — Rising water floods historic Main Street in Ellicott City, Md., in May 2018, destroying property and killing one man. Climate change is creating increasingly volatile weather, and now a UMD business researcher has created an index that can help homeowners, financial services firms and governments prepare for the wild weather of the future.*

With climate change making extreme weather events more frequent and intense, Maryland homeowners are increasingly faced with the threat of costly home damage—from flooded ground floors to unwanted skylights from windblown fallen trees.

To help property owners and other stakeholders plan for those rainy (or drought-stricken) days, University of Maryland finance Professor of the Practice Clifford Rossi developed the Homeowner Financial Vulnerability Index (HFVI), which categorizes the risk of weather-related damage for Maryland homeowners. The index ([download a PDF](https://drive.google.com/file/d/1-IP_NYwe0nfuERLrrPLkk0RJKOc_xqvs/view)) identifies regions in the state where residents are most likely to feel financial strain from getting hit with an unexpectedly large out-of-pocket expense.

Rossi, a risk management industry veteran, said identifying these pockets of vulnerability is critical for tailoring targeted financial products and services to help homeowners, and for policymakers and government agencies to determine where public investments in weather resiliency projects are most needed.

The index incorporates Home Mortgage Disclosure Act data for every loan originated in Maryland for 2021, plus loan-level credit performance data from government-sponsored enterprises Fannie Mae and Freddie Mac.

The study also uses data from the Federal Emergency Management Agency (FEMA) National Risk Index. FEMA’s calculations are composed of three factors: expected annual losses from 18 types of natural hazards at the county or U.S. Census tract level; a measure of a community’s ability to deal with a natural hazard, based on factors like capital and infrastructure; and a social vulnerability score, taking into account poverty, vehicles access, household crowding and other metrics.

In Maryland, the most threatening hazards are drought, tornadoes and coastal flooding, but Rossi found that the vast majority of tracts in the state have relatively moderate or low risk.

According to Rossi’s index, only four areas in Maryland have very high combined hazard risk and financial vulnerability, while 30 more than tracts fall into the next-highest risk category. Areas with the most risk are clustered on Maryland’s Eastern Shore, with some others on the western shore of the Chesapeake Bay.

“These areas are some of the least densely populated areas in the state, where agriculture and fishing are major industries,” Rossi wrote in the new study. They also have low minority populations relative to more populous areas of Maryland.


*This map shows Rossi's index findings, which combines FEMA's National Risk Index and with homeowner financial vulnerability in each Maryland Census tract.*




**Topics:** [Research](https://today.umd.edu/tags/research)


**Tags:** [Climate Change](https://today.umd.edu/topic/climate-change), [Finance](https://today.umd.edu/topic/finance), [Research](https://today.umd.edu/topic/research)


**Units:** [Robert H. Smith School of Business](https://today.umd.edu/topic/robert-h-smith-school-business)