The Cost of Hurricane Ian & Why Agents Should Be Reviewing Coverage with Clients
Hurricane Ian is behind us, thankfully, but the fallout is still being felt. It might feel like hurricanes are happening more frequently than ever, but that’s not quite true. While most forecasting models show either a decrease or no change to the number of hurricanes that will occur, rising sea levels mean that the flooding and impact of hurricanes will continue to worsen.
This is tough news for U.S. homeowners, because flooding is one of the worst perils for a home and can lead to any number of issues down the line, including mold and mildew, a compromised foundation, damaged walls, ceilings and floors, fire hazards from impaired electrical systems, plumbing issues, contaminated water supply, and so much more.
Overall, climate change is leading to unpredictable weather patterns that are wreaking havoc on homes. We’re going to dive into the true cost of the recent Hurricane Ian and why agents can help homeowners better protect their homes (and wallets).
Why You Should Be Talking to Your Clients About Homeowners Insurance
Hurricane Ian first hit the U.S. in late September in the southwest Florida area as a Category 4 hurricane. As it passed through Florida, it was downgraded to a tropical storm, but still managed to produce extreme amounts of destructive rainfall, including as much as 15 inches of rain in 12 hours in one location. Over four million people lost power and the hurricane caused more deaths (at least 114) than any other in the last 90 years.
The true cost of Hurricane Ian could take years to fully understand, but preliminary estimates are seeing the property damage costs landing at anywhere from $42 billion to $258 billion. And if it ends up leaning towards the higher end, that would make Ian the most expensive natural disaster in U.S. history.
But there are other costs that are trickier to calculate, including the disruption to businesses and the economy, interruptions in the supply chain, and more. Of course, that doesn’t even consider the emotional, physical, and mental impact the disaster has on people that have seen their homes destroyed, possessions ruined, and loved ones lost.
How Agents Can Help Their Clients
While we can’t undo the damage done by Hurricane Ian and others, we can help people feel more protected. Not everyone lives in hurricane-prone areas, but you’d be surprised how far the effects of a hurricane can radiate.
Some of the top states that get hit most by hurricanes include:
- North Carolina
- South Carolina
- New York
Most hurricanes in the U.S. hit anywhere from June to November. If you have insurance clients in one of these states, they need to understand their home insurance coverage and that’s where you come in.
Homeowners Insurance and Flooding
As an insurance agent, you’re well aware that some home insurance policies only list covered perils, while others only list excluded perils. But your insurance clients might not know that, or what their policy truly covers.
For one, many people assume home insurance covers flooding. But it’s actually typically excluded from most homeowners insurance policies, even (or especially) in hurricane-prone states. Homeowners need to purchase a separate flooding policy if they want it covered, and even then, usually only actual cash value is offered (rather than replacement cost).
And even if your clients do have flood insurance, not all types of water damage are included, such as rising water tables or sewer backup. This is why helping your clients understand the type of policy they’re purchasing or currently have is so important: when someone’s hard-earned money is being spent on premiums but they don’t actually have the coverage they think they do when push comes to shove, you’re going to take the heat as their insurance agent.
Hurricane Ian was an expensive reminder about how important home insurance truly is. But even so, no one likes to think about insurance coverage. That’s why you, as an insurance agent and their trusted advisor, are so important: you can help underscore the importance of homeowners insurance and understanding the coverage they’ve purchased.
The Bottom Line: Talk to Your Clients About Their Coverage
Insurance might not be a fun topic, but there are millions of people wishing they had increased their coverage before Hurricane Ian hit. Now that hurricane season has passed (hopefully), it’s time to guide your clients into reviewing their homeowners insurance before the storms hit next spring. After all, once a hurricane watch is declared, homeowners will not be able to purchase or change their coverage. Some policies also have a waiting period before taking effect, so now’s the time to help your clients understand what’s at stake.
It’s not always easy, but it’s worth it when it comes to your clients’ peace of mind and their trust in you.