Alma Reinforces Prediction of Stormy Hurricane Season For 2002: Now is The Time To Insure Your Home Or Business

NEW YORK - Hurricane season starts on June 1, but Hurricane Alma has jumped the gun, reinforcing what meteorologists are anticipating to be above-average storm activity this year. Hurricane Alma, churning about the western coast of Mexico, is the first of seven hurricanes predicted to form in the Atlantic in 2002.

The last seven years have been the most active seven consecutive hurricane seasons on record and is expected to continue in 2002. According to hurricane experts, the 2002 Atlantic hurricane season calls for the potential of nine to thirteen tropical storms, with six to eight hurricanes, and two to three classified as major hurricanes (category 3 or higher on the Saffir-Simpson Hurricane Scale). It is therefore more important than ever for consumers to protect their homes, businesses and autos from the ravages of Mother Nature, according to the Insurance Information Institute (I.I.I.).

Anyone living along the Atlantic or Gulf coasts is potentially at risk during hurricane season, which starts in June and ends in November. With wind gusts over 60 mph and ocean waters surging 15 feet or more at the coastline, hurricanes endanger life and can cause billions of dollars in property damage.

Last year, U.S. property/casualty insurers paid $24 billion in claims for insured-property damage, making 2001 the costliest year ever for catastrophe losses. Next week will be the first anniversary of Tropical Storm Allison--the costliest tropical storm to ever hit the United States, costing $2.5 billion in insured losses.

Hurricane Andrew, which struck in August of 1992, caused $15.5 billion in insured property damage, making it the most costly natural insured catastrophe in U.S. history. It is estimated that if a storm of this magnitude hit a major metropolitan area such as Miami, the cost could exceed $50 billion.

Sixty million people now live in hurricane-prone coastal areas, according to the I.I.I. In fact, since 1940, population density in these areas has increased from 44 per square mile to more than 140. This population growth, combined with an accompanying increase in coastal development, has the potential to be catastrophic.

During the 1990s, the frequency and severity of catastrophes began to increase dramatically. Over the past 12 years, insurers paid out more than $100 billion in catastrophe-related losses-about $700 million per month-many times more than in previous decades. Catastrophes include well-known events such as Hurricane Andrew and the Northridge earthquake, but also hundreds of smaller disasters associated with tropical storms, tornados, wildfires, hail, ice and snow. Homeowners insurance rates in many parts of the country continue to rise six to eight percent, and in some areas much higher because of the extraordinary costs associated with paying these claims.

According to the I.I.I., everyone living in hurricane-prone areas should educate themselves about their insurance needs.

BEFORE A HURRICANE STRIKES

• Review your insurance coverage to make sure it is adequate. Hurricane damage is covered under standard homeowners/renters policies, but it is very important to insure your home and belongings to their full replacement cost. If your home is damaged or destroyed by a hurricane, you will be covered for the cost of temporary repairs to prevent further damage. If the storm makes your home uninhabitable, you will be covered for reasonable additional living expenses.
• Flooding is generally not covered under standard homeowners policies, but is available through the Federal Emergency Management Agency's National Flood Insurance Program (NFIP). Ask your insurance agent more about flood insurance.
• If you live by the coast, your insurance policy may have a separate windstorm deductible. You may also need a separate policy for protection against wind and wind-blown water damage.
• If you rent a house or apartment, talk to your agent about purchasing a renter's insurance policy.
• Take an inventory of your property. A complete record of personal property, including receipts, will help determine the value of your belongings and help settle your insurance claim quickly and efficiently. It will also verify losses for tax purposes.

Consumers who need additional information regarding hurricane safety or homeowners insurance may call the I.I.I.'s National Insurance Consumer Helpline at 1-800-942-4242. Trained counselors will be available to answer your questions from 8 a.m. to 8 p.m. ET. You can also access the Institute's website at http://www.iii.org.

Source: Insurance Services Office