Preparing for a rainy day means more than buying an umbrella

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Published Date 10/2/2024

As California faces wildfire season and with Hurricane Helene devastating the South East, more than a quarter of U.S. homeowners report being financially unprepared for extreme weather-related costs.

According to Realtor.com’s Julie Taylor, Bankrate’s 2024 Extreme Weather Survey reveals that 43% of homeowners haven't taken any measures to protect their property against extreme damage in the past five years. “Additionally, 15% say they couldn't pay their deductible without incurring debt if their home suffered major damage, while 13% are unaware of their homeowners insurance deductible. Alarmingly, 7% of those surveyed lack any homeowners insurance,” she reports.

These findings are concerning, especially considering that the U.S. experienced 28 separate weather and climate disasters costing at least $1 billion each last year. Furthermore, according to the 2024 Realtor.com Housing and Climate Risk Report, 44.8% of American homes, valued at nearly $22 trillion, face at least one type of severe or extreme climate risk from flood, wind, wildfire, heat, or air quality.

Restoration expert Steve Leasure emphasizes the importance of being aware of common extreme weather events in one's area and preparing for any scenario. For those financially unprepared, there are steps to take before disaster strikes.

First, review your existing insurance coverage. Carefully read policy documents, noting covered perils, exclusions, and coverage limits for different categories. Extreme weather has altered the insurance landscape, leading to higher premiums, insurers withdrawing from high-risk areas, climbing deductibles for weather-related claims, and more restricted coverage for certain perils, advises Taylor. “Typical homeowners policies usually cover tornadoes, wildfires, hail, cold weather, and snow. However, earthquakes and flooding typically require additional policies. For hurricanes, wind damage is normally covered, but flooding is not.”

Next, determine your deductibles and start a fund to cover them. Insurers might require increased deductibles for certain weather-related cases, such as hurricane-related wind damage in coastal cities or tornado-related wind damage in tornado-prone areas. Hail damage often comes with larger deductibles in areas prone to hailstorms. Having a dedicated emergency fund to cover your deductible is wise.

For those in high-risk states like Florida and California, where some major insurers have stopped offering coverage, shopping around is crucial. Data journalist Cassie Sheets notes that insurance companies have reevaluated how they rate extreme weather risk, with some excluding certain weather perils from their coverage. Homeowners can explore options like excess and surplus lines of insurers or state-run insurance programs as a last resort.

To protect your home proactively:

Hurricanes? Install hurricane shutters and metal grates to secure windows and doors against debris, high winds, and heavy rainfall. To guard against hail damage, consider using hail-resistant roofing materials. Some states offer grants to help homeowners cover reroofing costs.

Tornadoes? Invest in impact-resistant windows, install storm shutters, secure entry doors, and brace garage doors.

Earthquakes? Safety Measures include reinforcing a home's foundation, bolting the foundation to the frame, anchoring large furniture pieces, and installing automatic gas shut-off valves.

Wildfires? Use fire-resistant materials for roofing, siding, and windows. Keep the area around the home clear of flammable vegetation, install fire-resistant landscaping, and regularly clean gutters and roofs to remove dry debris. Install spark arresters on chimneys as well.

Floods? Prevention involves maintaining proper grading to ensure the ground slopes away from the foundation. Raising the home's elevation can also help in high-risk flood zones. For protection against snowstorms and extreme cold, winterize your home by checking for leaks, installing proper insulation, and sealing any cracks.

Lastly, Taylor advises you to create a home inventory list and take photos of all possessions, saving the information off-site. “This will simplify the process of filing insurance claims in the event of extreme weather damage.”

Realtor, TBWS

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