Experts Forecast Hectic Hurricane Season

After last year’s relatively mild hurricane season, scientists are predicting above-average tropical storm activity in the vulnerable Atlantic basin. In fact, Colorado State University hurricane experts have estimated the probability of a major hurricane striking the U.S. Atlantic or Gulf coastline at 69%, compared to last century’s average of 52%.¹

Insurers, emergency managers, and others monitor these forecasts to better prepare themselves and the public for the threat of hurricane landings. Here’s a summary of what you should know about these dangerous and often expensive coastal storms, and an overview of the insurance coverage that may be available to help protect your family’s home and belongings.

A Warning Before the Storms?

Hurricane season officially begins June 1 and continues through November 30, according to the National Hurricane Center. Tropical storm activity peaks in August and September, when ocean waters are warmest and circulation in the tropical atmosphere is most prominent. Tropical cyclones begin in the equatorial regions of the Atlantic and Pacific Oceans or the Caribbean Sea and travel north.

Specifically, a hurricane is a severe tropical cyclone that generates winds reaching 74 miles per hour. Meteorologists at Colorado State University are predicting that 15 named storms will form in the Atlantic in 2010. They expect that eight will become hurricanes, four of which will develop into Category 3, 4, or 5 storms with sustained winds of 111 mph or greater. This compares with an historical average of 10 named storms—six of them hurricanes, including two major hurricanes—per year in the Atlantic.²

Forecasters are calling for an active season because of record warm-water temperatures in the Atlantic and the exit of El Niño conditions in the Pacific. They base their predictions on historical data, comparing years with similar water temperatures and atmospheric conditions. According to researchers, 2010 has shown similarities to the very active 2005 season that produced the catastrophic Hurricane Katrina.³

Insurance Concerns

Whether predictions for an eventful season prove right or wrong, it only takes one unfortunate storm to cause extensive damage. With June just around the corner, it’s a good time to review whether you have the appropriate coverage with your insurance agent.

Standard homeowners policies typically cover damage from wind and wind-driven rain, but if your property is subject to flood risk, you may need a separate flood policy in addition to your regular hazard insurance. Flood coverage can be purchased from the National Flood Insurance Program (NFIP) or some private insurers. Congress is responsible for the continued funding of the NFIP, which was created in 1968.*

It’s also important to determine whether you have good insurance coverage. Your home and its contents should be insured to their full replacement cost; otherwise, it could be very difficult to rebuild a structure at current market prices. If you have remodeled your home or bought new furnishings, inform your insurance agent so that the higher value is reflected in your policy. Updating your home inventory can help you determine whether you have enough insurance to replace all of your belongings. Having good documentation can help expedite the claims process.

If you live in a coastal zone, you surely understand the importance of precautionary measures such as installing storm shutters and preparing an evacuation plan. But after the storm is gone, it’s your insurance coverage that can help get your life and home back to normal as quickly as possible.

*Congress authorized a short-term extension of the NFIP though May 31, 2010.

1–3) National Underwriter, 2010

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2010 Emerald.