Rising Storm Damage Totals Highlight the Need for Financial Literacy Regarding Insurance
CHICAGO –The nation has experienced one of the most dramatic first quarters for severe weather events in 37 years. There were more severe weather events that exceeded $1 billion in damages from January to March of 2017 than any year since the National Oceanic and Atmospheric Administration (NOAA) started collecting this data in 1980. These events highlight not only the economic cost of recovery, but also that most Americans have a large portion of their personal net worth exposed to catastrophic loss, says the Property Casualty Insurers Association of America (PCI).
“In just a matter of moments a natural disaster, home fire, or other devastating event can destroy a family’s home and their most treasured possessions,” said Chris Hackett, director of personal lines policy for PCI. “This is why having adequate insurance coverage and understanding the details of your policy are so important to financial security. A key aspect of being financially smart is making sure you’re fully prepared for the unthinkable. This includes accumulating emergency savings and being properly insured.”
As the nation enters the peak of tornado season and prepares for the start of the 2017 hurricane and wildfire seasons, this is an excellent time to create an emergency response plan and gather emergency supplies. “It’s equally important for homeowners, renters, and business owners to conduct a review of their insurance policies and discuss coverage options with their insurance agent or company. These are great ways to defend your family, belongings, and finances from natural disasters,” said Hackett.
PCI 5 Steps to Being Financially Ready:
1. 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. 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.
2. Talk with your insurance company or agent about additional coverage options such as flood or earthquake insurance. The standard homeowners policy does not cover losses that result from floods or earthquakes.
3. Consider things you can do to reduce damage to 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.
4. Take a home inventory by using your smartphone. 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 or online.
5. 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 may be able to assist policyholders with paying for expenses such as temporary housing and restaurant meals if their property is determined to be uninhabitable due to the storm. Additional living expenses coverage can help homeowners and renters with the increase over normal living expenses.
Follow PCI on twitter @PCIAA where we will continue to share important preparedness tips.
