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Most Americans Have Not Protected Their Possessions from Severe Weather Threats

Tuesday, March 27, 2012

Most Americans Have Not Protected Their Possessions from Severe Weather Threats

Free app helps consumers create a home inventory, before disaster strikes.

The beginning of 2012 has been particularly active for tornadoes around the United States, according to NOAA’s National Weather Service, with more than 100 reported tornado sightings. Right now, thousands of homeowners are cleaning up and filing insurance claims following the outbreak of devastating tornadoes across the country. Since no state is invulnerable, the District of Columbia Department of Insurance, Securities and Banking (DISB)  is urging District residents to create a home inventory of their possessions to ensure they obtain  personal property coverage sufficient enough to replace their possessions in the event a tornado or  other severe weather damage occurs.

According to a February 2012 survey from the National Association of Insurance Commissioners (NAIC) more than half of Americans do not have a home inventory of their possessions, putting them at risk for inadequate home insurance coverage, should severe weather strike. The survey revealed 59 percent of consumers have not made a list or inventory of their possessions. Of those individuals with a home inventory, 48 percent do not have receipts; 27 percent do not have photos of their property; and 28 percent do not have a back-up copy of the inventory outside the home. Additionally, 59 percent of people with inventories have not updated their inventories in more than a year, meaning new purchases and gifts may not be covered.

“Severe weather events affected approximately 80 percent of the nation’s population over the past six years, causing widespread destruction,” says DISB Commissioner William P. White. “Creating a detailed inventory of your possessions is one the best ways to ensure you have the right amount of homeowners or renters insurance for you and your family.”

Last year alone, weather disasters across the country inflicted more than $43 billion in damage. The NAIC myHOME Scr.APP.book mobile application makes it easier for consumers to document their valuables, update their inventories and store the information for easy access after a disaster. The app is free and available for both iPhone® and Android® smart phone users.

Before severe weather strikes, consumers can use their inventory to evaluate their coverage and determine if they need to update their policies. It is important to know that the amount reimbursed for losses varies depending on the type of policy. On average, home contents are reimbursed only up to 50 percent of the home’s insured value; e.g., $50,000 to replace the contents of a home insured for $100,000.

Creating a Home Inventory
The myHOME Scr.APP.book app lets users capture images, descriptions, bar codes and serial numbers of personal possessions and stores the information electronically for safekeeping. The app organizes information by room and creates a back-up file for email sharing. To download the free app, go to the iTunes® or Android® Market app stores and search “NAIC.”

For those without smart phones, the NAIC offers a downloadable home inventory checklist and tips for effectively cataloguing your possessions. Both are available at http://home.insureuonline.org/.

Established Families
“All renters and homeowners should develop a home inventory.  This is especially important for families with many years’ worth of family possessions,” says Commissioner White. “Whether it is electronics, home furnishings, collectibles, jewelry or clothing, families need to know what they own and how much it is worth.”

As kids grow, the average family’s number of household possessions increases as well. Families should consider the following areas when reviewing their home insurance needs:

  • Electronics—The standard $1,000 policy limit on electronics may not be sufficient to replace multiple computers, MP3 players and tablets. Additionally, many homeowners’ policies do not cover items, such as laptops and televisions, stolen from a dorm room; so families with children living on or off campus should consider renter’s insurance.
  • Jewelry—Most policies limit coverage for jewelry to $500, which typically is insufficient  to replace a favorite pair of diamond earrings, a wedding ring or expensive family jewelry passed down from generation to generation.
  • Fashions—Considering the amount of laundry in the hamper each week, many parents realize the volume of clothing in the household is significant. Replacing clothes, shoes, handbags and accessories for today’s family can add up.
  • Home Goods—Kitchen appliances, workshop tools and sporting equipment also should be included when creating a home inventory.

Disasters Happen, Be Prepared
Personal safety should always be paramount when considering the threat of severe weather. Developing an emergency kit, identifying storm shelters and gathering important phone numbers —including the 24-hour contact information for your insurance agent and insurance company — are all important preparedness steps. For more tips on preparing for severe storms and other disasters, visit the Natural Disaster Consumer Alert on DISB’s website, www.disb.dc.gov.