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Will New Market Conditions Impact Hurricane Preparedness?

As hurricane season approaches, studies suggest that insurers may need to focus on outreach to keep preparedness top-of-mind.

By Sean Fields and Nathan Gundlach

Last year was one of the costliest and most diverse weather disaster years on record. According to NOAA, Hurricane Ida’s devastating wind, storm surges and floods caused $75 billion in damages alone (1). As the 2022 hurricane season begins in the United States, insurers may not only be battling risk of extreme weather events; current economic factors could also be cause for concern.

From inflation to the housing market, homeowners are tightening their budgets and making moves that are riskier than past years. Insurers should take steps to encourage homeowners to prioritize hurricane preparedness as the season inches closer.  

Inflation is impacting homeowners’ willingness to prepare for hurricane season.

Nearly every family is feeling the pinch of inflation, and data suggests that could impact homeowners’ appetite for making proper investments in preparing their homes for hurricane season. According to the U.S. Bureau of Economic Analysis, current-dollar disposable income and the personal saving rate decreased in the first quarter of 2022 over the fourth quarter of 2021 (2).   

The Federal Alliance for Safe Homes (FLASH®) conducted a consumer survey in March 2022 to gauge consumer knowledge and intentions regarding hurricane preparedness. According to the results, “nearly 30 percent of survey respondents reported a willingness to spend $50 or less, double the 2021 percentage when 15 percent reported a willingness to spend spending $50 or less (3).”

Rising housing costs and increased telecommuting have increased migration to smaller coastal cities.

COVID-19 and rising housing costs have caused consumers to rethink a lot, including how they work and where they live. Settling down in more affordable coastal cities in Florida and the Carolinas has become popular among families, according to a recent migration report by the National Association of Realtors (4).

These migration trends may make the issue of homeowners not knowing their local building codes even more challenging. The FLASH® Consumer Survey Topline Report concluded that in 2022, only 22% of residents in hurricane-prone areas know what building codes were used to build their home (5).

New and current residents may lack awareness of the current condition of their new home as many buyers agreed to waive home inspection contingencies in the white-hot seller’s market. Fortunately, according to a recent REALTORS® Confidence Index Survey, this trend seems to be cooling (6).  

In an uncertain market, education is key.

With new residents moving to coastal areas and no sign of inflation relief, it’s important that residential and commercial owners become educated on hurricane preparedness.

Homeowners and building owners should take time to inspect outside areas for dead trees and branches. Furniture and other items that could be swept up by high winds should be removed and stored accordingly. Boarding windows and doors should always be high on an owner’s to-do list, as this decreases the chance for water entry.

CTLGroup’s structural forensic engineers are available throughout the year to help insurers efficiently execute hurricane property damage insurance claims.  For more information, contact our key consultants below. If this is an emergency, call CTLGroup’s emergency response line at 847-556-2670.

Click here to learn more about CTLGroup’s disaster response services.


CTLGroup’s engineers are licensed in most hurricane-prone states. Our licensed engineers are available to help insurers and the insured alike efficiently investigate and recover from hurricane property damage.


Authors

Nathan Gundlach
Sean Fields

Sources

  • Smith, A. B. (n.d.). 2021 U.S. billion-dollar weather and climate disasters in historical context. 2021 U.S. billion-dollar weather and climate disasters in historical context | NOAA Climate.gov. Retrieved May 26, 2022, from https://www.climate.gov/news-features/blogs/beyond-data/2021-us-billion-dollar-weather-and-climate-disasters-historical
  • News release. Gross Domestic Product, First Quarter 2022 (Advance Estimate) | U.S. Bureau of Economic Analysis (BEA). (n.d.). Retrieved May 26, 2022, from https://www.bea.gov/news/2022/gross-domestic-product-first-quarter-2022-advance-estimate
  • Is America #HurricaneStrong? (n.d.). Retrieved May 26, 2022, from https://hurricanestrong.org/wp-content/themes/jcs-hurricane-strong/assets/documents/2022-HurricaneStrong-Topline-Report-Final.pdf
  • 2021 January – June migration trends report – cdn.nar.realtor. (n.d.). Retrieved May 26, 2022, from https://cdn.nar.realtor/sites/default/files/documents/2021-january-june-migration-trends-report-08-18-2021.pdf
  • Is America #HurricaneStrong? (n.d.). Retrieved May 26, 2022, from https://hurricanestrong.org/wp-content/themes/jcs-hurricane-strong/assets/documents/2022-HurricaneStrong-Topline-Report-Final.pdf
  • December 2021 Realtors® Confidence Index Survey: Fewer buyers waiving appraisal, inspection contract contingencies. www.nar.realtor. (2022, January 24). Retrieved May 26, 2022, from https://www.nar.realtor/blogs/economists-outlook/december-2021-realtors-confidence-index-survey-fewer-buyers-waiving-appraisal-inspection-contract

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