Lessons Learned From Hurricane Katrina Can Help Insure Against Future Disasters as Fifth Anniversary Approaches

/PRNewswire/ -- With predictions for a severe 2010 hurricane season, coastal residents should heed the lessons learned from Hurricane Katrina by making sure to have the right type and amount of insurance, according to the Insurance Information Institute (I.I.I.).

August 29 marks the fifth anniversary of Hurricane Katrina, the most costly insured disaster in United States history, which caused more than $41 billion in insured damage to homes, cars and businesses in Louisiana, Mississippi, Alabama, Florida, Tennessee and Georgia. The National Flood Insurance Program (NFIP) paid an additional $16.1 billion for flood-related losses.

The devastation caused by Hurricane Katrina demonstrates the costly ramifications of not properly preparing for a disaster.

1. Some individuals and business owners neglected to purchase flood
insurance. Lack of flood insurance resulted in uncovered losses to
thousands of homes and businesses.
2. Many business owners, who had spent years building up their companies,
did not purchase the right type and amount of coverage, including
business interruption (business income) insurance. Many were never able
to open their businesses again.
3. Some homeowners and business owners did not invest in making their
property hurricane-resistant by installing storm shutters, hurricane
clips, and other loss-mitigation measures, which could have saved their
property.
4. Many policyholders failed to take a home or business inventory prior to
the disaster, which could have made the claims process easier.
5. Many business owners did not have a disaster preparedness plan. As a
result, those businesses were unable to resume operations.
6. Many homeowners and business owners did not update their insurance
policies to reflect the current cost of rebuilding or replacing damaged
property and were left underinsured as a result.
7. Some individuals did not evacuate, especially when told to do so by
authorities. At least 1,836 people perished in the hurricane and
subsequent floods, making it the deadliest U.S. hurricane since 1928.


"The more prepared you are for a hurricane or other major disaster, the greater the possibility you and your loved ones will survive the storm both physically and financially," said Jeanne Salvatore, senior vice president and consumer spokesperson for the I.I.I.

The I.I.I. videotaped several Hurricane Katrina claimants who were able to get their lives back to normal after Hurricane Katrina because they had purchased the proper insurance. To view the video, see Five Years After Hurricane Katrina.

Just how prepared are Gulf Coast residents five years later? According to a 2010 I.I.I. poll, 74 percent of Louisiana and Mississippi residents who had filed an insurance claim from Hurricane Katrina considered themselves more prepared now than in 2005, compared with about half of the residents of those states who did not file a claim. In addition, seven out of 10 Hurricane Katrina claimants now have an inventory of their possessions to document their losses after a disaster, compared with 50 percent of the nation as a whole.

However, the survey also found some disturbing views: 32 percent of respondents in Louisiana and Mississippi think their homeowners policy covers damage from flooding during a hurricane -- that is double the percentage in the nation as a whole, but still represents a surprisingly high number of people who remain uninformed about flood insurance.

"It's astonishing that so many people who lived through Hurricane Katrina still don't understand that flood insurance is not covered under a home or business policy," pointed out Salvatore.

The I.I.I. noted four important steps homeowners and business owners can take now to protect themselves and their property:

1. Review Your Insurance Coverage

The time to review your insurance policy is before you have to file a claim. Make sure that you have both the right amount and type of insurance:

-- Amount of insurance. You should have enough insurance to rebuild your
home or business and replace all of its contents. If you have made a
major alternation or improvement to your home or business, get in
touch with your agent or company representative to update your policy.
Homeowners should find out how much coverage is available for
Additional Living Expenses (ALE). These expenses could include the
cost of a temporary rental home or hotel room, restaurant, meals and
any other expenses incurred in the event your home is uninhabitable
while it is being repaired or rebuilt. Some policies provide coverage
for 20 percent of the amount of insurance you have on your house.
Others may specify a time period. Additional coverage is generally
available for an additional cost.
-- Type of insurance. Ninety percent of all natural disasters involve
some form of flooding. Flood damage is not covered by standard home
insurance policies, but is available from the National Flood Insurance
Program and from some private insurance companies. Excess flood
insurance is also available from private insurance companies if you
need more coverage than the NFIP offers. For more information on flood
insurance, see FloodSmart.gov.

2. Create a Home/Business Inventory

A home or business inventory is a list of all of your personal or business possessions and their estimated value. An up-to-date inventory will help you:

-- Purchase the right amount of insurance.
-- Speed up the claims process by substantiating losses.
-- Provide documentation for tax purposes or disaster assistance.


In order to make the process of creating and updating an inventory, the I.I.I. has developed the Web-based Know Your Stuff software for homes and businesses. For more information on the process of creating an inventory, see the I.I.I.'s home inventory video podcast and brochure.

3. Protect Your Property

Hurricane-proof your home by keeping wind and water out. Invest in storm shutters and reinforced garage doors. Secure roof shingles and seal any openings, cracks and holes. Gable end walls and roof sheathing should be strongly attached and braced, and double doors should have heavy duty anchors at the top and bottom and a dead bolt at least 1 inch long. The Institute for Business & Home Safety has additional tips to protect your home against wind and other disasters.

4. Have an Evacuation Plan

When a hurricane is approaching, advanced planning really matters. Decide ahead of time where you will go and how you will get there, and have more than one option. If you have pets, contact your veterinarian for a list of preferred boarding kennels and facilities or ask your local animal shelter if they provide emergency shelter or foster care for pets. Also identify hotels or motels outside of your immediate area that accept pets. For more information see Protecting Your Pet During a Disaster.

The I.I.I. also recommends practicing your evacuation plan by doing a test run: giving yourself just 10 minutes to pack up your family, pets and important items and get out -- possibly for good. For a video on the subject, see Ten Minute Challenge.

"By taking these four steps now, you stand the best chance of getting your life back in order after a disaster," explained Salvatore.

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Oxendine: Flood Insurance Program Resumes Issuing Policies

Insurance Commissioner John W. Oxendine said the National Flood Insurance Program has been reauthorized by Congress, and flood policies are again available through your homeowners insurance agent or company.

Flood coverage is federally backed by the NFIP. The National Flood Insurance Extension Act extends the NFIP through September 30 of this year, and is retroactive back to June 1, 2010. The program had been inactive since May 31.

Oxendine said a flood policy can be a valuable addition to standard homeowners coverage.
“Purchasing flood insurance is an important consideration for Georgia consumers, even if you think a flood is unlikely in your area,” Oxendine said. “Twenty-five percent of flood claims occur in areas considered medium or low-risk for floods.”

Oxendine said flood insurance is available for up to $250,000 for damage to your home. A standard flood policy will cover the basic structure as well as the furnace, water heater, air conditioner, floor surfaces (carpeting and tile) and debris clean up.

You can buy NFIP flood insurance directly from your property and casualty insurance agent or insurance company, if your community participates in the NFIP. Your insurance agent or insurance company can confirm whether flood insurance is available to you and what it would cost. You can buy flood insurance for your home or business regardless of whether the property is in or out of a floodplain, as long as the property is located in a participating community.

It is very important to plan ahead; a flood insurance policy will not go into effect until 30 days after you buy the policy. You can obtain more information about flood insurance at http://www.floodsmart.gov.

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Contact GEICO for storm claims at 1-800-841-3000 or geico.com

(BUSINESS WIRE)--GEICO urges policyholders whose vehicles have been damaged in the recent Atlanta area flooding to report their claims as early as possible. To reach GEICO’s claims team at anytime, 24 hours a day, call 1-800-841-3000 or report the claim on www.geico.com.

“Our adjusters have been in Atlanta and the local areas all week assisting policyholders with damaged or flooded vehicles,” said Gary Musolf, head of GEICO claims in the region. “If you notice damage to your vehicle, contact GEICO right away so we can make arrangements to take care of your claim and get you back on the road.”

GEICO advises residents to heed all weather warnings and road closures. However, if driving is necessary, GEICO recommends these rain and flood driving tips to keep you safe:

* Heavy rain can make it difficult for other drivers to see you. Keep your headlights on and drive slowly, keeping your eyes out for on-coming traffic.
* If you see a large puddle or standing water, go around it or choose a different route. That puddle could be hiding a deep hole.
* Give yourself plenty of time to brake and do so gently in order to avoid hydroplaning.

“The safety of our policyholders and the quick and quality repair of their vehicles is our first priority during stressful times like these,” said Musolf.

GEICO (Government Employees Insurance Company) – as part of Berkshire Hathaway – is the third-largest private passenger auto insurer in the United States*. GEICO provides auto insurance coverage for 9 million policyholders and insures more than 16 million vehicles.

In addition to auto insurance, GEICO offers customers insurance products for their motorcycles, all-terrain vehicles (ATVs), boats, homes, apartments and mobile homes. Commercial auto insurance and personal umbrella protection and life insurance are also available.

As a member of the Berkshire Hathaway group of companies, GEICO is rated A++ for financial strength by A.M. Best Company and ranks at the top of several national customer satisfaction surveys. For more information, go to http://www.geico.com.

*A.M. Best 2008 market share data

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