A recent study found that less than 22 percent of homeowners view changing weather events or disaster preparedness as factors when they update their homeowner’s insurance policy. The study from the National Association of Insurance Commissioners (NAIC) found that, with disaster-level events on the rise, that more than 800 emergency or disaster declarations were made in the United States from 2005-20152.
Those events resulted in an average of $24 billion in annual insured losses. The NAIC survey also revealed that more than 56 percent of homeowners failed to review their insurance policies over the course of the last calendar year and that 14 percent are unsure when they last reviewed their policies. Their research also showed that just 44 percent have an accurate “home inventory” of their belongings. For those who have taken on the task of completing an inventory, more than 40 percent of them haven’t updated it in over a year.
Spring weather brings with it the potential for severe storms, particularly in the Northern Plains and upper Midwest. Storms that produce hail, lightning, flooding and the ongoing threat from tornadoes come with the onset of spring, so we’d like to offer some suggestions to prepare your insurance for the wild weather ahead.
“During the past decade, the U.S. has experienced significant shifts in the frequency, severity and location of natural disasters,” says Michael Consedine, NAIC Chief Executive Officer. “According to our survey, most consumers aren’t connecting the dots between these shifts and the impact on their home insurance needs. Missing these links can be costly.”
The NAIC survey also pointed up some generational differences as to how various segments approach their home insurance. Millennials – 19 percent – of the population, are significantly more likely than Gen Xers – 10 percent – and Baby Boomers – 8 percent – to consider what effect changing weather patterns might have on their homeowner’s insurance.
Compared to Gen Xers and Baby Boomers, Millennials are far more likely to have reviewed or updated their insurance policy within the last five years, and those millennials also are more likely to have an updated home inventory and to have reviewed or revised recently.
The NAIC recommends that consumers should regularly re-evaluate their “risk profile” annually.
Am I now at risk? Are earthquakes, wildfires or other disasters now a threat? Do I need a flood insurance policy?
What has changed in my home? Did the number of people (and belongings) increase or decrease? Have I made any major purchases?
Have I updated my home with a kitchen renovation, new security system or other improvements?
Should I be looking at different coverage? Can I save money by bundling my home and
You can find some useful disaster prep guides, free, on ways you can prepare for tornadoes, hurricanes, floods, earthquakes and wildfires at www.insureuonline.org.
For your business? It’s critically important to have an up-to-date copy of a disaster recovery plan. Make sure your employees are aware of the plan and where to find it. As you would with any other important corporate records, keep them in a safe location. A working emergency generator might also provide a stopgap solution if the weather turns foul.
At your home? Dedicating a section of your pantry to canned foods and bottled water could provide a crucial few days of supply in the event of a disaster. Fresh batteries and sturdy flashlights should be easy to find and in working order. It’s also a good idea to have a plan in place to contact any elderly or homebound friends and family at a moment’s notice.
The Emergency Management Coordinator for Racine County, David Maack, says warning systems have been upgraded in recent years.
“For years people relied on outdoor warning sirens as their primary means of warning. However, there are limitations to outdoor warning sirens,” Maack says. “They’re not designed to be heard indoors, especially in newer, more energy-efficient and better-insulated homes with additional electronic noise (like air conditioners, stereos or television) on.”