ATLANTIC OCEAN - SEPTEMBER 8: In this NOAA image taken by the GOES satellite, Hurricane Lee crosses ... [+]
An “extremely active” hurricane season is forecasted for 2024, according to a report released by Colorado State University’s Department of Atmospheric Science. The report predicts 23 named storms, 11 hurricanes and five major hurricanes—which include wind speeds reaching Category 3, 4 or 5— between June 1 and November 30 of this year. In comparison, the usual Atlantic hurricane season includes 14 named storms, seven hurricanes and three major hurricanes.
Several factors are playing into this prediction. Current El Niño weather conditions are likely to transition to La Niña weather patterns this summer and fall, which could lead to hurricane-favorable wind shear conditions. The National Oceanic and Atmospheric Administration’s climate specialist Tom Di Liberto predicted more than a 50% chance that La Niña weather patterns will follow, and the National Weather Service recently issued a La Niña watch. In addition, water temperatures in certain parts of the Atlantic Ocean where hurricanes tend to form are at record highs.
What will recent forecasts mean for homeowners, from a personal finance standpoint? According to Insurify, many Florida homeowners are already sitting on home insurance costs that are five times the national average following Hurricane Ian, a Category 5 Atlantic hurricane in 2022. Before homeowners panic about everything from evacuation routes to even higher home insurance costs, Scott Popilek, managing director and Atlantic regional leader for Risk Strategies, assures that current projections shouldn’t cause a “knee-jerk reaction” from home insurance carriers.
“While it is being taken seriously, this forecast is so early on that you will not see an immediate reaction for rate increases or carriers pulling back,” Popilek says, explaining that the catalyst will be the shifting to a La Niña influenced weather pattern. “If and when that happens, then carriers might be more conservative in the amount of business they write,” he adds.
Popilek predicts that if this recent forecast indeed holds true, Florida can withstand a Category 3 or lower storm without any immediate effects on home insurance rates, except for that type of hurricane impacting Miami or Tampa. He believes that if the state gets into a situation with multiple hurricanes hitting highly populated areas or a Category 5 hurricane hitting a major area, then that would put stress on the home insurance market, potentially leading to higher rates and carriers pulling out of the state.
In the meantime, here are some steps homeowners in hurricane-prone areas can take today to ensure they are set up for the best possible financial outcome in the event of a storm.
Review Your Insurance Coverage
Standard homeowners insurance covers the structure of your house for disasters such as hurricanes and windstorms, along with other perils, such as fire. It is important to understand the factors that might impact your insurance payout after a hurricane and adjust your policies accordingly.
If you’re living in a hurricane-prone area, “now is the time to conduct a review of your policy with your insurance agent,” says Mark Friedlander, director of corporate communications for the Insurance Information Institute, also known as Triple-I. This will help you identify gaps and make policy adjustments. “It’s important to make sure you have enough replacement cost coverage, also known as dwelling coverage, if you suffer a loss,” he adds.
Begin by reading the declarations page of your insurance policy, which provides details on how much coverage you have, your deductibles, and how a claim will be paid. You can also have a discussion with your insurance agent. Some questions to consider are:
- Do I have the right amount of coverage to rebuild or repair my home, to replace its contents, and to cover temporary living expenses if my property is uninhabitable?
- Does my policy include a separate deductible for risks like hurricane or hail?
- Should I raise the deductible to save money?
- Am I taking advantage of all available discounts?
- Do I need to raise the amount of coverage for liability, personal possessions or the structure?
- Do I need flood or earthquake coverage, or an umbrella policy?
While standard home insurance policies typically cover damage to your home’s structure and belongings due to high winds, flood coverage is typically not included and must be purchased separately from the National Flood Insurance Program or a private flood insurer. Since 90% of all natural disasters include flooding, Friedlander says this is especially important to consider.
“The flood insurance take-up rate is better in hurricane-prone states like Florida, where approximately 18% of homeowners have a flood policy,” Friedlander says. “But that still leaves 82% of Florida homeowners vulnerable to flood damage with no financial protection for the loss.”
When it comes to windstorm deductibles, standard home insurance policies in hurricane-prone communities are subject to a windstorm deductible that is separate from the standard home policy deductible. The windstorm deductible is triggered by named storms and typically is 1% to 5% of your dwelling coverage limit in your policy, Friedlander says. For example, a home with a $300,000 dwelling coverage limit and a 2% windstorm deductible means the first $6,000 of a hurricane damage loss would be deducted from the insurance claim.
Create A Home Inventory
Take a proactive approach to submitting any future claims by taking an inventory of your valuables and each item’s worth. Also take photos and videos of your home, including the exterior as well as your contents, Popilek suggests.
Jot down a description of each valuable that you own, whether in your home or in a storage facility. Record where and when you bought it, the price, the make and model, and any other useful information. Include documented proof of value, such as store sales receipts, purchase contracts and appraisals. Also create a list of serial numbers of major appliances and electronic equipment. Be sure to store this information on the cloud so it can be accessed from anywhere.
For big-ticket items, such as jewelry, art and collectibles, check with your insurance agent to be sure you have the necessary coverage. You may need coverage separate from your standard homeowners insurance policy for these types of items. Taking these steps will help ensure a smoother process for submitting claims in the aftermath of a major storm.
Protect Your Vehicles
The best thing to do during an impending hurricane is to move your car out of harm’s way. If that’s not possible or if a storm takes an unpredicted turn, it’s wise to be prepared. Optional comprehensive auto coverage will protect your vehicle against theft and damage caused by an incident that’s unrelated to a collision. This includes fire, flood, vandalism, hail, falling trees or rocks and other hazards.
Safeguard Your Home
Consider investing in items that will make your home more resilient if a storm passes through. This includes roof tie-downs, a wind-rated garage door, storm shutters and hurricane windows. Also have your roof inspected annually by a licensed and bonded contractor to ensure that it can withstand high winds and torrential rains.
“The roof is the first line of defense against severe weather, so an inspection should be prioritized ahead of hurricane season to ensure time for any necessary repairs,” says Sarah Dillingham, senior meteorologist at the Insurance Institute for Business & Home Safety. “Missing shingles should be replaced, and loose shingles secured.”
If it is time for roof replacement due to age or existing damage, re-roof to the FORTIFIED standard, which is a voluntary above-code construction and re-roofing method that prevents damage from high winds up to 130 miles per hour, Dillingham says.
“Much like the roof, if the garage door fails, it can lead to more significant structural damage to the home,” Dillingham adds. “High winds can blow a garage door inward, allowing pressure to build inside the garage and push up on the roof and against surrounding walls—often resulting in a cascade of structural damage to the entire building.” She recommends wind-rated garage doors approved for use in their area and doors with a rating of 130 mph or higher. If a garage door is not labeled as wind-rated, it should be replaced or at least reinforced to provide needed protection. Also, check the brackets that connect the door frame to the structure to make sure they are unbroken, tightly secured and not missing any bolts or nuts.
Dillingham also recommends checking that gutters, downspouts and soffits are secure and to clean out gutters to keep water from building up around the roof. In addition, trim trees as these can fall on a roof or break windows during high winds. Also consider sealing gaps and cracks in exterior walls.
“Homeowners should take these steps now to prepare their properties ahead of hurricane season to reduce damage,” Dillingham says.
