The evacuation dilemma: stay or go?

As of Saturday evening, Hurricane Dorian is making a big right hand turn, moving the storm’s threat north.
So now it seems Georgians and South Carolinians are facing the evacuation dilemma: stay or go?
I’ve been there. In 1992, Hurricane Andrew was heading arrow straight for the border between Broward and Miami-Dade counties. We lived a mile north of that.
We boarded the house up as best we could, moved our valuable stuff (a lamppost, a stereo, a rocker we bought on our honeymoon) into the downstairs bathroom, where it would be best protected. And we sat on our couch and cried. We knew what we owned was junk, but it was our junk. It was everything we had, and we knew we would never see it again.
Then we left.
Too many people take the chance and stay behind. Travelers Insurance surveyed people living in hurricane-prone states. The survey found:

  • Men (23%) were more likely than women (11%) to ignore a mandatory evacuation order.
  • Millennials (21%) were more likely to ignore an order than Gen Xers (16%) or Baby Boomers (11%).
  • People in the most cane-prone states (Florida, Louisiana, Texas’ Gulf Coast) were the stubbornest. Georgians, Alabamians, Mississippians, Virginians and North Carolinians were most likely to heed the order.

Back in 1992, my wife and I were lucky. Hurricane Andrew drifted south, and we returned to a home intact.

Even so, we made the right decision, and I’d urge anyone in the same position now to leave. After all, insurance can help you recover the stuff you’ve lost. But no one can replace you.

I.I.I. has some tips for what to do when a hurricane threatens.

Hurricane Dorian headed toward Florida as a Category 4 storm

As of August 28, Hurricane Dorian has been forecast to be a Category 4 hurricane and chances have increased for a direct hit over Labor Day weekend along the coast of Central Florida, causing storm preparations to get off to a frenzied start.

The National Hurricane Center’s (NHC) forecast track map showed Dorian making a direct landfall over Volusia and Brevard Counties on September 2 with winds of more than 110 mph, storm surge, high tides and torrential rainfall.

Dorian became a tropical storm on August 24 and strengthened to hurricane status on August 28 near St. Thomas, U.S. Virgin Islands. Nearly the entire eastern coastline of Florida and the Georgia coastal area are within the potential path of the storm. Florida Gov. Ron DeSantis has declared a statewide state of emergency.

According to Dr. Phil Klotzbach, a meteorologist at Colorado State University and Insurance Information Institute non-resident scholar, Hurricane Dorian has now generated more Accumulated Cyclone Energy than the other four named storms of the 2019 Atlantic hurricane season combined. Andrea, Chantal and Erin were very weak, and while Barry became a hurricane, it was relatively short-lived.

Dr. Klotzbach has been tracking Dorian and provided a video update yesterday on its progress.

The I.I.I. offers the following guidance to those who live and work along the east coast of Florida and Georgia:

  • Write down the name and phone number of your insurer and insurance professional and keep this information either in your wallet or purse;
  • Purchase emergency supplies, such as batteries and flashlights;
  • Secure drinking water and non-perishable food; both are essential for all household members in case of prolonged power outages. It is recommended you have one gallon of drinking water per person per day, for up to seven days;
  • Prepare your yard by removing all outdoor furniture, lawn items, planters and other materials that could be picked up by high winds;
  • Fill your car’s gasoline tank because long gas lines and fuel shortages often follow a major weather event;
  • Review your evacuation plan and if you have a pet, your pet’s evacuation plan;
  • Conduct a home inventory; there are many mobile app options which can help you create and store a room-by-room record of your belongings.

 

NICB: Motorcycle Thefts Declined in 2018

Getty Images

Motorcycles are popular with riders seeking affordable transportation options and the thrill of the open road. But they can also be attractive targets for thieves. The good news is that motorcycle thefts saw a decline in 2017 and 2018 after an uptick in the previous two years.

According to the National Insurance Crime Bureau’s (NICB) annual motorcycle thefts report, in 2018 motorcycle thefts were down by six percent with a total of 41,674 motorcycles reported stolen compared with 44,268 in 2017. About 44 percent of the motorcycles stolen in 2018 were recovered.

In general, motorcycle thefts are a seasonal crime related to warmer months, with 10 percent or more of thefts from the yearly total occurred in May, June, July, August, September, and October.

According to the report the top 10 states for motorcycle thefts in 2018 were:

  • California (7,035)
  • Florida (4,279)
  • Texas (3,073)
  • New York (1,777)
  • South Carolina (1,743)
  • North Carolina (1,466)
  • Indiana (1,229)
  • Missouri (1,194)
  • Georgia (1,174) and
  • Colorado (1,109)

The top 10 cities for motorcycle thefts in 2018 were:

  • New York (1,310)
  • Los Angeles (628)
  • Miami (595)
  • Las Vegas (540)
  • San Diego (527)
  • San Francisco (520)
  • Houston (460)
  • Philadelphia (404)
  • Austin (329) and
  • San Jose (322)

The top 10 most stolen motorcycles in 2018 by manufacturer were:

  • American Honda Motor Co., Inc. (8,260 thefts)
  • Yamaha Motor Corporation (6,655)
  • American Suzuki Motor Corporation (4,882)
  • Kawasaki Motors Corp., U.S.A. (4,861)
  • Harley-Davidson, Inc. (4,769)
  • Taotao Group Co. Ltd (1,851)
  • KTM Sportmotorcycle AG (780)
  • Genuine Cycle (515)
  • Ducati Motor Holding (455)
  • Kymco U.S.A., Inc. (413)

The NICB offers the following fraud and theft prevention tips:

  •  Purchase your motorcycle from reputable manufacturers or dealers. When purchasing from a private party, avoid custom or “assembled vehicle.”
  • Take the motorcycle to a local dealership for inspection before purchasing.
  • When purchasing a motorcycle from a private party, consider investing in a vehicle history report. Also, go to your local law enforcement station to make the transaction. Many law enforcement agencies have “safe areas” to complete purchases between private parties.
  • When selling your bike, don’t turn over the title until the funds (check or money order) have cleared the bank.
  • Use common sense; park in well-lit areas, lock your ignition, and remove your keys.
  • Remove the key and lock your motorcycle even if stored in a garage. You may want to invest in additional aftermarket lock(s) and even a theft-deterrent system with tracking capabilities (e.g. GPS) for your motorcycle.
  • Don’t store your title in your motorcycle’s storage compartment.
  • Place unique markings on your motorcycle and take photos of them. If your bike is stolen, you can use these markings to identify your property.

The I.I.I. has Facts & Statistics on auto theft here.

From the I.I.I. Daily: Our most popular content, August 16 to August 22

Here are the 5 most clicked on articles from this week’s I.I.I. Daily newsletter.

To subscribe to the I.I.I. Daily email daily@iii.org.

 

I.I.I. satellite media tour: Peak hurricane season is upon us

 

By Lynne McChristian, I.I.I. Media Spokesperson and Non-resident Scholar 

 

 

The Insurance Information Institute, along with Colorado State University’s atmospheric research scientist Dr. Phil Klotzbach, will be conducting a satellite media tour on Tuesday, August 13 in Miami to talk about what may lie ahead for the remainder of the hurricane season. Nearly 20 media outlets have signed up to participate. We will be talking with news organizations throughout the U.S. about the rising frequency and severity of natural disasters and about what you can do to understand your risks and be ready to face them – both physically and financially.

Hurricane Season ebbs and flows. And, our collective attention spans mostly ebb. Granted, it’s hard to remain engaged with an event that lasts half a year. From June 1 to November 30, you hear the “Get Ready” message from multiple sources, and the human tendency to wait until a storm threat is on the doorstep makes preparedness more frenetic than necessary. Being hurricane ready is a smart goal, and now is an excellent time to put hurricane preparedness on the front burner. Peak hurricane season has arrived.

Mid-August through the end of October historically is when most hurricanes form. Remember HIM? Hurricanes Harvey, Irma and Maria made landfall between mid-August and the end of September in 2017. Two Category 4 storms and one Category 5 occurred in a matter of weeks in a season predicted to be slightly above average. Last year’s Hurricane Michael hit in late October. While this year’s latest prediction is for a “near-average season,” hurricane researchers will tell you that it only takes one hurricane making landfall near you to break the law of averages.

Frankly, natural disasters do not ebb and flow; there is no rhythmic pattern to them. Forecasting science is constantly improving, and that means we have a better idea of where hurricanes may be heading. But estimating intensity remains a challenge. You can’t “go with the flow.” Rather, be ready for whatever the wind brings.

The following stations will be broadcasting live interviews (times are Eastern Standard):

8:10 AM: Norfolk, VA, Radio 47  WXGM-FM
8:20 AM: Minneapolis, MN, Radio 15  KWLM-AM
8:40 AM: Raleigh, NC, TV 25 WRAZ FOX
9:10 AM: Albuquerque, NM, Radio 47 KDAZ-FM
9:15 AM: Myrtle Beach, NC, TV 95 WPBF ABC
9:45 AM: Dallas, TX, Radio 5 KKVI-AM/FM
10:25 AM: Norfolk, VA, TV 44 WTKR CBS
12:00 PM: San Diego, CA, Radio 29 KOGO-AM
12:10 PM: Los Angeles, CA, Radio 2 KMET- AM
12:40 PM: St. Louis, MO, TV 21 KTVI FO

These stations are taping segments and should air them over the next few days:

Austin, TX,  TV 40 KEYE CBS
Birmingham, AL,  TV WBRC FOX
Charleston, SC, TV 94  WCIV ABC
Chattanooga, TN, TV 83  WRCB NBC
Chicago, IL, Radio 3  WSRB-FM
Columbus, OH, Radio 34  WSNY-AM
Fort Myers, FL, TV 55  WFTX FOX
Jacksonville, FL, WTLV NBC
Mobile-Pensacola, AL, TV 58  WPMI NBC
Myrtle Beach, SC, TV 95 WPDE ABC
Roanoke, VA, TV 67  WFXR FOX
Roanoke, VA, TV 68  WSET ABC
Savannah, GA, TV 93  WSAV NBC
San Antonio, TX, TV 31  WOAI NBC
Seattle, WA, Radio 12  KORE-FM
Tampa, FL, TV 11 WTSP CBS

The roster of stations is subject to change. If you’re in one of the cities listed, please tune in!

 

NICB: Top 5 states for hail claims

The National Insurance Crime Bureau (NICB) recently released a three-year analysis of insurance claims associated with hail storms in the United States.  According to the NICB review of claims data from ISO ClaimSearch®, there were a total of 2.9 million hail loss claims in the United States from 2016 through 2018.

The top five states for hail loss claims were:

  • Texas (811,381)
  • Colorado (395,025)
  • Nebraska (163,336)
  • Missouri (153,403)
  • Kansas (146,206).

The top five cities for hail loss claims during that period were:

  • San Antonio, Texas (75,187)
  • Colorado Springs, Colorado (67,920)
  • Omaha, Nebraska (52,803)
  • Denver, Colorado (48,357)
  • Plano, Texas (42,659).

Over the three years covered by the report, May had the highest monthly average for hail loss claims with 203,296. June was next with 178,881. April (164,232), March (153,716) and July (96,947) round out the top five.

Of the five policy types providing hail loss coverage, Personal Property-Homeowners was the most affected with 1,657,663 claims or 57 percent of the three-year total. It was followed by Personal Auto with 898, 500 claims and Personal Property – Farm with 149,215 claims.

“Hail damage fluctuates year-to-year, but what seems to be consistent is the number of unscrupulous contractors ready to swoop in promising a quick fix, which is why NICB encourages policyholders to use caution when selecting a contractor or other workers to help repair your property or replace your windshield following a storm,” said Brooke Kelley, NICB vice president of communications. “Always check first with your insurance company or agent before signing any documents presented by a contractor whom you did not request to appear. It’s why we say, “If you didn’t request it, reject it.”

The following tips are also helpful:

  • Get more than one estimate
  • Don’t be pushed into signing a contract right away
  • Get everything in writing
  • Require references and check them out
  • Ask to see the contractor’s driver’s license and write down the number and the license plate on his or her vehicle

The I.I.I. has facts & statistics about hail here and here.

 

Researchers continue to predict a near-normal 2019 Atlantic hurricane season

On Monday August 5th Colorado State University (CSU) hurricane researchers issued a news release in which they continue to predict a near-average 2019 Atlantic hurricane season.

The CSU team is predicting a total of 12 additional named storms to form after August 1st . Of those, six are expected to become hurricanes and two to reach major hurricane strength (Saffir/Simpson category 3-4-5) with sustained winds of 111 miles per hour or greater. These forecast numbers do not include Subtropical Storm Andrea and Hurricane Barry which formed prior to August 1.

The scientists, led by I.I.I. non-resident scholar, Dr. Phil Klotzbach, cite both near-average sea surface temperatures in the tropical Atlantic and a weakening El Niño event in the tropical Pacific as the primary reasons for the near-average prediction.

El Niño tends to increase upper-level westerly winds across the Caribbean into the tropical Atlantic, tearing apart hurricanes as they try to form. While El Niño has weakened over the past several months, they anticipate that lingering warming in the central tropical Pacific should be a slight inhibiting factor for the remainder of the hurricane season.

The tropical Atlantic currently has near average sea surface temperatures. A warmer tropical Atlantic provides more fuel for developing tropical cyclones. Increased tropical Atlantic warmth is also associated with moister air and a more unstable atmosphere, both of which foster organized thunderstorm activity necessary for hurricane development. Vertical wind shear was slightly stronger than normal across the Caribbean in July. This tends to be associated with quieter Atlantic hurricane seasons.

The team based this forecast on 40 years of historical data that include Atlantic sea surface temperatures, sea level pressures, vertical wind shear levels (the change in wind direction and speed with height in the atmosphere), El Niño (warming of waters in the central and eastern tropical Pacific), and other factors.

So far, the 2019 hurricane season is exhibiting characteristics similar to 1990, 1992, 2012 and 2014. “1992 and 2014 had below-average Atlantic hurricane activity, 1990 had near-average hurricane activity, and 2012 had above-average Atlantic hurricane activity.” said Dr. Klotzbach.

The full forecast report is available here.

Most popular blog posts: July 2019

It’s always interesting to know which of our blog posts get the most views. Here are the top five most viewed in July:

  1. Insurance ratings variables: a closer look
  2. How many homes are insured how many are uninsured?
  3. A letter to college graduates from I.I.I. CEO Sean Kevelighan
  4. How insurance supports the American farmer
  5. I.I.I./ICM presents recruitment and retention: Best practices and paths not taken

 

 

The Future of Social Security?

By Dr. Steven Weisbart, Chief Economist, Insurance Information Institute

Beginning in 2020, the Social Security fund for retirees will be paying out more than it is taking in. This means that if there are no significant changes, in about 2034 the fund will exhaust the surplus it had built up since 1983. In that case, income to Social Security (from FICA taxes) will only be able to fund about 75 percent of benefits payable. It is for this reason that surveys show that many people under age 50 believe that Social Security won’t be available to provide retirement income for them.

Since Social Security income will be an important part of virtually everyone’s retirement, and since 2035 isn’t very far off (in financial planning terms), we should all be mindful of what might happen, and what we can do now to cope with adverse scenarios.

The government currently has no plan for what to do when the money runs short. One possibility is that everyone’s check in 2035 will be for 75 percent of what it was in 2034. Another possibility is that all those who received checks in 2034 will get the same amount in 2035 and new recipients will have benefits trimmed to fit the remaining funds. A third possibility is that those who are entitled to the highest dollar benefits will get nothing (on the presumption that they had high incomes and so likely have other sources of retirement income) so that those with smaller benefits can be paid their whole entitlement. And other possibilities exist, too.

It’s also possible that Congress will act to change the program so that none of these possibilities take place. Indeed, earlier this year H.R. 860 (The Social Security 2100 Act) was introduced in the U. S. House of Representatives to do just that. The House Ways & Means Committee held a hearing on this bill on July 25, 2019. As of July 30, the bill had 211 co-sponsors—nearly enough for the full House to pass the bill and send it on to the Senate.

There are essentially seven major provisions in H.R. 860. Two of them raise payroll taxes to help fund Social Security benefits. Oddly, other provisions raise Social Security benefits. The two that raise payroll taxes are:

  • Payroll subject to taxation. Currently, Social Security payroll tax (on employee and employer) currently stops at $132,900 (indexed by increases in the average wage). H.R. 860 would create a new payroll tax beginning at $400,000 without cap. The $400,000 would be frozen (not indexed), so that over time, an increasing number of people would be affected by it.
  • Payroll tax rate increase. Currently the payroll tax is 6.2 percent on employer and employee. H.R. 860 would raise it by 0.05 percentage points per year over 24 years (beginning in 2020) up to 7.4 percent (in 2043) each on employer and employee. Note that this higher rate would apply to payroll income up to $132,900 (indexed) and payroll income of $400,000 and over (not indexed). Note that if average wages grow at 2 percent per year, the $132,900 in 2019 would become $213,800 in 2043 and keep climbing after that.

The provisions that raise Social Security benefits are mostly focused on low- and moderate-income earners:

  • There would be a small increase in the formula for the lowest “tier” for computing benefits. This would affect everyone receiving benefits. The percent effect on checks would depend on the base amount but because this change affects only the lowest tier, it would have the greatest effect on those whose average career wage was low. One actuary estimated the dollar increase to be $28.
  • Cost of living adjustment (COLA) change. Currently, the COLA for Social Security is the CPI-W (the cost of living for wage earners). Since 1982 the Bureau of Labor Statistics has been computing a cost-of-living index for elderly consumers (62 and over)—designated the CPI-E—which H.R. 860 would substitute for the CPI-W in the Social Security COLA formula. Because the CPI-E weighs spending on medical care and housing more heavily than does the CPI-W, and because prices in these categories have been rising faster than other categories, it is estimated that if past trends continue, this change could increase the COLA by 0.2 percent per year.
  • Alternative minimum benefits. For individuals who worked for more than 10 years, the bill creates an alternative minimum benefit. A qualifying beneficiary would receive that alternative minimum if it is higher than the standard calculated benefit amount.
  • Income taxation of Social Security benefits. The thresholds for income taxation of Social Security income currently are expressed in frozen dollar amounts but H.R. 860 would double these amounts. This would lower the income to the Social Security reserve funds but would make Social Security income-tax-free for more people.
  • Earnings-related benefits. New (but tiny) additional benefits for retirees whose average earnings were $400,000 and above to recognize the new payroll taxes they’ll pay while working.