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September, 2005 Katrina: The worst storm in history?   More storms to come? What to do before, during and after hurricanes Homeowners' policies don't cover floods Home-Based Insurance Myth: My Homeowners Policy Covers My At-Home Business

Katrina’s devastation is still being measured. Estimates of deaths and the total damage are still very premature. Andrew, another category 5 storm in 1992, caused $26.5 Billion in damage. Katrina may surpass that.

• 80% of New Orleans is underwater. Many are still trapped in the city.
• In Mississippi, blocks and blocks of homes have vanished. A dozen casinos actually floated away. Major bridges have heavy damage.
• Flooding reached 11 feet in Mobile, AL - submerging autos.
• In Florida, there were at least 11 deaths and power is still out in many areas.

In the Delaware Valley, we were lucky—only a few raindrops (if that) and higher fuel prices. But that is this time; remember hurricane Hazel that hammered the Carolina’s (October, 1954) and worked it way up the eastern seaboard intensifying as it went.

More storms to come?

The prediction by the National Oceanic & Atmospheric Administration (NOAA) seems to be coming true. On August 2nd they warned of a very active Atlantic hurricane season with the worst to come—18-21 tropical storms and 9-11 hurricanes with 5-7 of these being major storms. See full predictions.

These predictions are based on “warmer-than-normal sea-surface temperatures and low wind sheer.” NOAA also suggests that the high number of storms will continue for another decade.

What to do before, during and after hurricanes

• Plan evacuation routes
• Have disaster supplies on hand
• Make arrangements for pets
• Get your home ready
• Develop an emergency communication plan

If evacuation is recommended, lock up and leave. Here’s a complete list.

Fires are also a danger from broken gas lines, electrical wires, and poorly operated generators. FEMA provides additional safety tips.

Homeowners’ policies don’t cover floods

Floods are the #1 most common natural disaster in the United States. Yet most people are not aware that homeowners insurance doesn’t apply to flood damage.

Only flood insurance covers flood damage and loss. Only about 40% of New Orleans residents had flood insurance and they are in a high-target flood area.

Even if you’re not in a floodplain, you may suffer a loss—heavy rains, poor storm drainage systems, a blocked creek—last year’s flooding in New Jersey caused much loss. In fact, almost 25% of flood insurance claims are filed in low or moderate-risk areas.

Flood insurance, available under the National Flood Insurance Program, is not very expensive, and can be purchased through insurance agencies.

Be aware that you can’t take out this insurance just before a storm is due to hit; a new policy takes 30 days before going into effect.

Home-Based Insurance Myth: My Homeowners Policy Covers My At-Home Business

Homeowners policies were never intended to cover business exposures. Consequently, coverage for the items used in a home business such as computers, fax machines, filing cabinets, tools and inventory are commonly limited to $2,500 in the home and $250 away from home under most policies. And homeowners coverage provides no liability insurance for a home-based business.

• After a computer is stolen, the business owner may find out that it's not covered by the homeowners policy because business property is excluded.
   
• After the house burns down, a home-based business owner may find that the fire coverage is void because the business was not disclosed to the insurance company.
   
• After the Friendly FedEx person slips on the front porch and breaks his back, it could well be that the home-based business owner is not covered for injuries associated with business deliveries.

If you have an insurance question or would like to see a future article on a particular subject, just call us at 1-(908)-608-1700 or click here. We hope you enjoyed this newsletter,             Glenn C. Allsopp Allsopp & Company 803 Springfield Avenue Summit, NJ 07901 Phone: 1-(908) 608-1700 Fax: 1-(908) 608-1717 1-(908)-608-1700

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