2017’s catastrophic weather hasn’t convinced some US homeowners to properly prepare in 2018

Weather-related disasters are considered one of the largest risk concerns for homeowners.

However, a recent survey revealed that following a particularly deadly and destructive year of hurricanes, wildfires, floods and mudslides, many homeowners may not be as prepared as they could be in 2018.

Private Risk Management Association (PRMA), a nonprofit advocacy group for the high-net-worth insurance industry, surveyed its agent and broker members to gain insights into the impact felt by their clients in 2017 and to offer an outlook on how their clients will view risks this year.

More than 140 members servicing over 7,500 high-net-worth clients responded to the January 2018 survey, which revealed that 61 percent of brokers believe that catastrophic weather events kept their clients up at night in 2017.

Despite this, 71 percent said that there will likely be no shift in their clients’ preparedness levels in 2018.

“Unless somebody has actually suffered a loss, they continue to be overly optimistic that it’s just not going to happen to them,” said PRMA Executive Director Lisa Lindsay.

Therefore, they might not allocate the appropriate time to taking proactive precautions in order to prevent a loss, according to Lindsay.

“I believe that there’s a large number of consumers out there who are not getting the in-depth level of advice and consultation that they need to understand that they do have options to better prepare themselves in the wake of some of these events,” Lindsay said.

Nearly 30 percent of brokers said their high-net-worth clients were unprepared for 2017’s devastating wildfire season, during which California’s largest-ever wildfire scorched about 281,900 acres.

“When you have those extremely dry conditions, and then you have those Santa Ana winds that are coming in at 50-60 mph, it’s going to push that fire very, very quickly,” said Jim Judge, American Red Cross volunteer and emergency manager for Volusia County, Florida.

“There were people in California who literally burned to death in their homes, in their beds, because it just moved so quickly,” said Judge, who has previously fought wildfires.

Brokers said that many of these homeowners skipped preventative wildfire protection due to environmental concerns or out of fear that their home could be the last one standing, according to the survey.

“If someone lives in a wildfire area, we would be doing a full risk assessment, which would involve understanding where the house is,” said Lindsay.

A key factor that homeowners could consider includes whether there is brush on the property that needs trimming, especially because flying embers are one of the main reasons that homes ignite.

“People can put up screening and ensure that their eaves are covered so that embers can’t get in there; people can put protective spray on their houses,” Lindsay said. “There are a lot of things that can be done in advance.”

Fifty-four percent of survey respondents said their clients were not ready for the impacts of flooding, and 27 percent said clients were unprepared for 2017’s hurricanes. About 70 percent of brokers believed this would remain the case in 2018, the survey showed.

“When we look at Hurricane Harvey, and when you get 60 inches of rain in a matter of hours, it’s going to be devastating,” Judge said. Only one in 10 homeowners impacted by Harvey had flood insurance, he added.

In preparing for potential disasters, homeowners might also want to recognize the fact that mudslide damage isn’t always automatically included in their insurance policy.

“We’re now looking at those mudslide losses as not being caused by mudslides, but actually being caused by the fires,” Lindsay said. “It was the fire that destroyed the land and terrain, which made the heavy rains cause this mudflow.”

Lindsay said that homeowners should consider working with risk management professionals to become aware of the risk exposures that they face and to discuss options to minimize the potential for loss.

If a loss does occur, Lindsay said, ensuring that a homeowner has the proper insurance coverage can be extremely beneficial.

“Insurance is a great thing to have and it’s necessary, but we’re trying to change the culture of mindset that ‘there’s nothing that can be done, I’m not going to worry about it, I have insurance,'’’ Lindsay said.

“What we’re trying to say is, ‘there’s plenty we can do, and there’s also insurance,'” Lindsay added. “It’s no longer ‘if’ there’s a flood loss or ‘if’ there’s a fire loss; these things are happening pretty routinely, and we don’t think they’re going to slow down.”

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