As the peak of the Atlantic hurricane season draws near, the Property Casualty Insurers Association of America (PCI) urges residents in New Jersey and New York to remain vigilant and if they have not already taken precautions, now is the time to act.
This year there have been four named storms, which equals the 10-year average for this point in the season and NOAA’s most recent hurricane season forecast predicts that there could be a total of 13 to 19 named storms, including 6 to 9 hurricanes, of which 3 to 5 could be major hurricanes.
“Whether it is an active hurricane season or not, most residents of New Jersey and New York recognize that it only takes one major storm such as Superstorm Sandy to have a devastating impact on a community, region or entire state,” said Chris Hackett, director of personal lines for PCI. “The aftermath of Sandy, which resulted in more than $18 billion in insured losses demonstrated that preparation for hurricane season is something everyone along the East Coast should take serious. However, many people still have not bought flood insurance or taken steps to address shortcomings in their preparations for natural disasters. The good news is that there is still time to act and many measures that will protect lives and property are quick and easy.”
Steps to Financially Prepare for a Disaster
The loss of a home and loved possessions following a natural disaster is devastating and without having an adequate economic safety net it can be a crushing financial burden. However, insurance is the foundation for keeping a family’s economic safety net strong. As homeowners take steps to prepare for natural disasters, it is also critical that they address their financial risk associated with the potential of hurricanes. The following provides five quick steps to help you financially prepared for a disaster:
- Conduct a yearly insurance review of your insurance policy and limits: This will help to ensure you are adequately insured and better able to weather a catastrophic loss. To help you determine how much coverage you may want, check with local builders for the current costs associated with building new homes, and then add at least 10-20 percent. Keep in mind, rebuilding a property will cost much more than building a new home. A homeowner may want to consider what is commonly called Extended Replacement Cost coverage which pays out a specified percentage above the dwelling coverage limit. Even if your homeowners policy has an inflation guard that adjusts to increase the dwelling coverage limit, check to make sure that the amount is adequate. Also, ask your agent or insurer about deductibles and discounts that may be available. Make sure you know the amount of your deductible - it may be based on the value of your home or be a fixed dollar amount. Higher deductibles can help keep the cost of insurance affordable.
- Talk with your insurance company or agent about additional coverages such as flood insurance or sewer back up: The standard homeowners policy does not cover losses that result from floods or the failure of a sump pump. Flooding, both inland and coastal, often accompanies tropical storms and can be very expensive. Homeowners may end up paying for these repairs themselves if they do not have flood insurance. While we’re discussing water, sump pump and sewer back up is another coverage that can be added on to your homeowners policy if you need to protect belongings in a basement or lower level of the home.
- Consider things you can do to stormproof your property: Taking action to reduce the amount of damage that may occur when severe weather occurs can reduce insurance costs and help speed the recovery process after a natural disaster. If it is appropriate, consider things such as installing storm shutters or straps to secure your roof. At a minimum, don’t make your house a target for debris during a windstorm. Protect your property by covering all windows with plywood or shutters, moving vehicles into the garage when possible and placing grills, patio furniture and other items that could become airborne during a windstorm indoors.
- Inventory your household items, and photograph or videotape them: An inventory lists your home’s contents so you can quickly and easily account for all of your belongings and report the loss to your insurance company. Without it you may have to rely on your memory to determine what you lost. The home inventory will help speed up the claims process and ensure you are compensated fully for your loss. Keep the inventory and your insurance policies in a safe place, such as a safety deposit box. Also, keep the name, address and claims-reporting telephone number of your insurer and agent in a safe and easily accessible place.
- Prepare for power outages, inconveniences and scams that could affect your finances: When the power is out you may not have the ability to pump gas, withdraw cash from an ATM or pay for things electronically. So, as severe weather approaches, fill up your gas tank in case you have to evacuate, have some cash on hand for emergencies and charge all your electronic devices. After a storm, insurers are often able to assist policyholders with paying for expenses such as temporary housing and eating in restaurants if their property is determined to be uninhabitable. Additional living expenses coverage can help homeowners and renters with the increase over normal living expenses. Also, after a natural disaster beware of unlicensed contractors and scam artists who may be looking to cash in on your misfortune. It is natural to be in a hurry to begin making repairs but, you will save yourself a lot of time, money and frustration by taking the time to check the credentials of the businesses and individuals that you hire to repair your property.
PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $195 billion in annual premium, 39 percent of the nation’s property casualty insurance. Member companies write 46 percent of the U.S. automobile insurance market, 32 percent of the homeowners market, 37 percent of the commercial property and liability market, and 41 percent of the private workers compensation market.