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Hurricane Barry has come and gone, and while the first hurricane to make landfall in the US this season didn’t wreak as much havoc as expected, there are still other storms slated to appear in the summer and fall.
For 2019, forecasts are predicting between 12 and 14 named storms, with five to seven of those expected to develop into hurricanes, and, of those, two to four are expected to be major events.
“That’s considered an average season,” said Ann Myhr (pictured above), senior director of knowledge resources at The Institutes Risk and Insurance Knowledge Group. However, she added, an ‘average’ forecast doesn’t mean people should be lulled into a false sense of security. “Last year, the actual [numbers] were 15 named storms, eight hurricanes, and two major storms, and the two major storms were Florence in North Carolina, and Michael that came through the panhandle of Florida.”
Meanwhile, in 2017, Hurricane Harvey caused a tremendous amount of flooding in Houston, and was an usual event because it didn’t quickly move inland and weaken. In total for that year, there were 17 named storms, 10 hurricanes and six major storms, said Myhr.
No matter the forecasts, planning and preparation is important before a hurricane is already in town.
“You can’t wait until something is coming through or is on your doorstep. You have to have plans in place ahead of time,” said Myhr. “The top states for hurricane activity are Florida, Texas, and New York, though all of [the businesses in] those states along the Gulf Coast and up the northeast coast have to think about reviewing their insurance plan – thinking about deductibles, thinking about flood coverage, and talking with their producer or insurance company about what coverages are available, what coverages they have in place, and what’s their risk management plan outside of their insurance coverage.”
Insurance agents can also help homeowners prepare for whatever the hurricane season brings next with a few key steps.
“The important thing to go over with an agent is to make sure that the values [of homes] are in line with [current] real estate values,” said the Insurance Information Institute’s Bill Davis (pictured below). “People also need to go over in detail what it would cost to rebuild in the event of damage, and make sure that the amount they have in coverage will take care of that.”
Brokers and agents have to make sure they’re kept in the loop about any renovations or updates to homes as well. After all, a new patio or an extension on a home changes its value.
“Lots of people do overlook that. They may think that certain things they’ve done are not that big of a deal, but it’s adding to the value of the home and would add to the value of rebuilding or repairing any damage,” explained Davis.
Another issue that people ran into after Hurricane Andrew in 1992 was that many didn’t have law or ordinance coverage, which the International Risk Management Institute defines as “coverage for loss caused by enforcement of ordinances or laws regulating construction and repair of damaged buildings.” For example, when older structures are damaged by hurricane winds or flooding, they might need upgrades to their electrical, heating, ventilating, air-conditioning, and plumbing units based on city codes.
Sufficient contents coverage is also key, as homeowners can forget about the expensive items they have under their roofs that could suffer damage if a hurricane strikes.
“Ideally, the homeowner would have kept receipts and records of what they paid for that high-valued item, and some of those things have appreciated in value,” said Davis. “Agents can be of great assistance. Sometimes, they might even suggest having an appraisal done of certain items.”
Some states might also have hurricane and windstorm deductibles that insureds should know about. Insurers in 19 states and the District of Columbia sell homeowners’ insurance policies with percentage deductibles for storm damage, rather than the traditional dollar deductibles, according to the Insurance Information Institute. The details of hurricane deductibles are provided on the declarations page of homeowners’ policies, and, depending on the state, insurance companies decide the level of the hurricane, windstorm, or wind/hail deductible, and where it should apply. Agents can direct homeowners to read these details carefully and provide explanations of the deductibles, if necessary.
Finally, considering that the Federal Emergency Management Agency’s (FEMA) Special Flood Hazard Areas (SFHAs) – zones that have an approximate 1% probability of being inundated with a flood in any given year, and where the purchase of flood insurance is mandatory for property owners with a mortgage – are far from the only regions with flood risk these days, many homeowners need to ensure they have proper coverage within their homeowners’ policy, as well as additional flood coverage.
“It can flood just about everywhere, and we’ve been seeing that a lot lately in areas where heavy rains caused the rising water,” said Davis. “That can do terrific damage to homes and businesses.”
