As the Atlantic hurricane season begins, a new survey from the Insurance Information Institute (Triple-I) and Munich Re USA has highlighted a concerning lack of preparedness among homeowners.
One of the key findings from the survey is that 60% of homeowners admitted to not having taken any steps to better protect their homes. In contrast, only 40% have implemented some preventive measures and less than half (48%) have an evacuation plan in place.
Furthermore, the survey indicated that 68% of homeowners claim not to have been impacted by weather events in the past five years. As a result, 36% said they believe their homes will never be affected by climate risks.
The study also revealed a trend of population migration to southern states exposed to coastal weather events, with places like Texas, Florida, Georgia, and North Carolina experiencing an influx of residents who may be unaware that they live in storm surge danger zones.
Additionally, it drew attention to the socioeconomic factors affecting homeowners’ preparedness.
According to the findings, the 20% of respondents with annual household incomes below $40,000 represents 48% of those without homeowners’ insurance.
Another key point highlighted by the study is the importance of educating consumers about flood risk and obtaining proper coverage.
As noted by Tim Brockett, EVP and head of specialty at Munich Re US, 78% of those who perceive themselves at risk of flooding have purchased flood insurance.
Furthermore, approximately half of those with flood insurance obtained it from private insurers.
“This points to the fact that it is critical to educate consumers not only about flood risk, but also about obtaining proper coverage for this risk,” said Brockett, who noted that private insurers have increasingly become more willing to assume flood risk and provide coverage options beyond those available under the National Flood Insurance Program (NFIP).
Jumping off this point, Triple-I CEO Sean Kevelighan stressed the on-going need for community-wide education initiatives.
“Many homeowners expect insurance to cover flood and are devastated when they find it does not,” said Kevelighan. “Just how many low-income homeowners could withstand the total loss of their home from an unforeseen weather event without coverage? We found that the more educated homeowners are, the more likely they were to buy the coverage.”
The study, titled Homeowners Perception of Weather Risks, also examined resilience-related improvements that homeowners have made to protect their homes.
The most commonly cited activities were using new building techniques to fortify roofs, windows, doors, and walls, as well as installing smart sensors and cameras to monitor for damages, according to the survey.
Sixty percent of respondents also stated that they were willing to spend up to $5,000 on home improvements in the next year, while 14% expressed unwillingness to spend any money on property upgrades.
“The most immediate danger that Americans face from increasing climate risk is the worsening of extreme weather, including hurricanes and floods,” said Kevelighan. “The insurance industry needs to partner with communities and businesses at every level to promote a broad resilience mindset focused on pre-emptive mitigation and rapid recovery. As severe weather continues to threaten more communities, building resilience against these natural disasters is imperative.”
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