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NEW YORK, May 12, 2005 - With more than 68 million people living in hurricane-vulnerable locations, a major storm could be catastrophic, causing billions of dollars in property damage. Despite the threat of another severe hurricane season, many homeowners are still inadequately insured, says the ̽»¨¾«Ñ¡ Information Institute (I.I.I.).

In fact, a recent poll sponsored in part by The National Hurricane Survival Initiative found that many residents along the East and Gulf coasts don't plan to take simple steps to protect themselves and their homes from hurricanes, despite the devastation caused by the five hurricanes that struck the United States last year.

The survey reported that 47 percent of those surveyed had no disaster plan for the hurricane season, which begins June 1 and runs through November, 56 percent of those surveyed said they felt "not too" or "not at all" vulnerable and 25 percent would do nothing to prepare for a storm, even after a watch or warning was issued. The poll also found that one in four residents mistakenly believed they could evacuate flood-prone areas 30 minutes to an hour before a hurricane made landfall.

Hurricanes and other tropical storms usually cause widespread flooding, yet only about 25 percent of homes in flood plains purchase federal flood insurance. Damage from flooding is not covered under standard homeowners policies.

In addition, many homeowners may not have adjusted their policies to take into account the rising construction costs in their communities. Others, who recently increased the value of their homes through renovations and additions, have not increased their policy limits to more accurately reflect the cost of rebuilding their home today.

A 2004 Harris Poll found some 80 percent of homeowners nationwide say their homes have increased in value, yet only 63 percent report increasing the amount of their homeowners insurance coverage.

"Protecting your home with the proper insurance is part of responsible home ownership," says Loretta Worters, vice president of the I.I.I. "That means reading and understanding your policy, and getting additional coverage if you've made changes or additions to your home."

She also pointed out that many consumers in hurricane-prone areas are still unfamiliar with their homeowners insurance deductibles. To make private insurance available and more affordable, 17 states now use hurricane deductibles for hurricanes and windstorms.
These hurricane deductibles are in the form of a percentage rather than a dollar deductible and range from one percent to 15 percent of the home's insured value.

"Home owners need to check with their insurer to find out what percentage deductible they are responsible for," says Worters. "A coastal resident with a home insured for $200,000, for example, could be responsible for at least $2,000 and perhaps as much as $30,000 worth of storm damage before insurance kicks in."

Some states, such as Florida, have statewide regulations for hurricane deductibles. Homeowners should check with their state's insurance department to see if any regulations apply. Additional information is also available through I.I.I.'s web site at: www.iii.org/media/hottopics/insurance/hurricanwindstorm/.

The I.I.I. suggests that consumers review their insurance coverage before disaster strikes to make sure it is up-to-date and ask their insurance agent or company representative about the following:

Your Home

• Replacement Cost
  Most policies cover replacement cost for damage to the structure. A replacement cost policy pays for the repair or replacement of damaged property with materials of similar kind and quality.
• Guaranteed or Extended Replacement Cost
  These types of policies provide additional insurance coverage over what it should cost to rebuild your home. This type of coverage can be useful if there is a widespread disaster that pushes up the cost of building materials and labor. A guaranteed replacement cost policy would pay to rebuild your home regardless of cost. Increasingly, however, insurers are offering extended replacement cost policies, which provide 20% or more over the limits in your policy.
• Inflation Guard
  This automatically adjusts the rebuilding costs to reflect changes in construction costs. Find out if your policy includes this coverage or if you have to purchase it separately.
• Building Code Upgrades
  Building codes require structures to be built to specific standards. If your home is severely damaged, you will have to rebuild it to comply with current building code standards in your state, which could be costly. Check with your insurer to see if this coverage is included in your policy.
• Sewer Back-up
  Insures property for damage caused by the back-up of sewers or drains. Check with your insurer to see if this coverage is included in your policy.
• Flood ̽»¨¾«Ñ¡
  Flood insurance is not covered under a standard homeowners policy. It is available, however, through the Federal Emergency Management Agency's (FEMA) National Flood ̽»¨¾«Ñ¡ Program (NFIP). Contact an insurance agent for details or call the NFIP at 1-800-638-6620 or .
• Additional Living Expenses
  Covers the cost of living elsewhere while your home is being repaired or rebuilt. It pays the cost of hotel and restaurant bills and other additional living expenses beyond what you would pay for ordinary living. If you rent out part of your home, it would also replace lost income for the time you would not be able to collect rent. Many policies provide coverage for 20 percent of the amount of insurance you have on your house and may be for a specified time period. Coverage varies from company to company, so find out how much you have and if you need additional coverage.

Your Possessions

There are two types of insurance to consider for your personal possessions:

• Actual cash value - replaces the cost of your possessions less depreciation.
• Replacement cost coverage - replaces property without a deduction or depreciation. Replacement cost generally costs about 10 percent more, but it provides much better coverage.

To make sure you have the right insurance coverage, contact your insurance agent or company representative. You can also access the I.I.I.'s website at .

The ̽»¨¾«Ñ¡ Information Institute is a non-profit, communications organization supported by the property/casualty insurance business.