WASHINGTON, D.C. – The Atlantic hurricane season is about to kick off its busiest two month stretch. While we all hope that no storms strike, the American Property Casualty Insurance Association (APCIA) urges homeowners to be prepared in advance and contact their insurer or agent to make sure they have the right amount and right types of insurance coverage as hurricane season heats up.
“Following a hurricane is not the time to realize you do not have enough insurance coverage to repair or rebuild your home," said Karen Collins, assistant vice president of personal lines for APCIA. “It is imperative that homeowners review, and if needed, update their insurance policy to keep pace with rising costs. Inflation, recent supply chain issues, and increased demand for skilled labor and construction materials following unprecedented natural disasters in the last two years have contributed to a significant increase in the costs to rebuild homes and businesses.”
Inflation hit a 40 year high of 9.1 percent in June 2022, but according to a recent APCIA survey about two-thirds of insured homeowners may be without key additional coverages, including automatic inflation guard, extended replacement cost, and building code/ordinance coverage, that can better protect them in these challenging market conditions. The survey also revealed only 30 percent of insured homeowners have purchased more insurance or increased coverage limits to compensate for rising building costs. The cost of residential construction materials is up 19 percent from a year ago, according to the National Association of Home Builders.
APCIA’s survey also found less than half (40 percent) polled indicated they had updated their home insurance to account for recent renovations or remodeling that was completed during the pandemic.
“Homeowners who have invested in renovations or remodeling projects for their home over the last two years need to protect their investment by making sure their insurance policy reflects the updates,” added Collins.
According to the National Oceanic and Atmospheric Administration’s (NOAA) annual midseason update, conditions are still favorable for an above average season. NOAA’s midseason update calls for 14 to 20 named storms, of which six to 10 could become hurricanes and three to five of those could become major hurricanes. The Atlantic hurricane season, so far, has had three named storms and no hurricanes.
APCIA urges homeowners to take the following steps to prepare for peak hurricane season:
- Review your insurance policy. Call your insurer to review your policy, understand how it works, and make sure you have enough coverage. If you have recently completed a renovation or remodel, let your insurer know. Make sure you are comfortable with your deductible amounts, which is what you will pay out of pocket if you have to file a claim, and ask if your policy pays replacement cost or actual cash value. Actual cash value takes depreciation into account and replacement cost is the amount necessary to rebuild your home with materials of like kind and quality.
- Evaluate your need for flood insurance. Flood damage is typically not covered under a standard homeowners policy. Flood insurance is available as a separate policy through the National Flood Insurance Program or the private market, although some insurers may offer it as an endorsement to the homeowners policy. More instances of record-setting rainfall associated with storms are increasing the likelihood of flooding in areas that are typically outside the flood zone. New flood policies typically take 30 days before they go into effect, so do not delay in obtaining flood insurance.
- Make a home inventory. Use your smartphone to take photos or videos of your belongings, including furniture, appliances, clothes, jewelry, and art. Save your inventory in a location you can easily retrieve it, such as the cloud, or email a copy to yourself. Many insurers also offer specialized apps to help policyholders create their own home inventory.
- Gather copies of your insurance policies. Keep copies of your insurance policies (home, flood, and auto) in a safe, dry, and accessible location.
- Save your insurer’s contact info. Save your insurer’s toll-free claims number to your phone’s contacts so you can easily start the claims process if your home is damaged or destroyed in a storm. APCIA has a list of insurer’s toll-free numbers here.
Additional APCIA Resources for the 2022 Atlantic Hurricane Season
The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions—protecting families, communities, and businesses in the U.S. and across the globe.
