This could be the most expensive hurricane season ever

Experts say rampant inflation and an abnormally high number of intense storms will make 2022 especially costly for homeowners.

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Myles Ma, CPFCSenior ReporterMyles Ma, CPFC, is a certified personal finance counselor and former senior reporter at Policygenius, where he covered insurance and personal finance. His expertise has been featured in The Washington Post, PBS, CNBC, CBS News, USA Today, HuffPost, Salon, Inc. Magazine, MarketWatch, and elsewhere.

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The worst hurricane season in the recorded history of the United States was 2005, when a record-breaking 28 named storms wreaked havoc on the gulf coast and the eastern seaboard, including Hurricane Katrina.

According to forecasters at Colorado State University, the 2022 Atlantic hurricane season will be the most active since 2005, with 20 named storms expected to form between June and November — well above the average of 14.4 over the last three decades. [1]

Hurricanes have cost an average of $20.5 billion per storm since 1980. [2] Hurricane Harvey alone had costs of $125 billion back in 2017. With the price of construction up almost 20% in the past year alone, [3] 2022 could be an extremely costly storm season.

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How climate change will impact this hurricane season

Unusually cold temperatures in the Pacific Ocean, thanks to a weather event known as La Niña, are a contributing factor to this year’s predicted increase in storms. [4] Colder temperatures in the Pacific decrease hurricane activity there, but increase hurricane activity in the Atlantic.

But climate change is also increasing both the number and the intensity of storms, says Kevin Reed, an associate professor and associate dean for research at the School of Marine and Atmospheric Sciences at Stony Brook University.

“There is more and more published research, including some by my team here at Stony Brook, that suggests recent seasons and recent storms have become more intense from a rainfall perspective due to climate change,” Reed says.

Reed and his colleagues have found, for example, that rainfall during the 2020 hurricane season was 5% to 10% higher because of human-induced climate change. [5] Temperatures have likely continued to rise since then.

“It’s fair to say that the storms in this upcoming season will likely have more rainfall due to climate change,” Reed says.

There’s no guarantee that more rainfall means more damage from hurricanes; it depends on where the rain falls. Most hurricanes don’t make landfall, but when one does, 5% to 10% more rainfall will probably lead to an even bigger increase in flooding, Reed says.

While rainfall might be evenly distributed across the area of a hurricane, on land it accumulates in the lowest areas. So in a world with more frequent and wetter hurricanes, areas that are already flood-prone can expect to see more frequent and more severe flooding.

How inflation will impact this hurricane season

Meanwhile, inflation has increased prices by 8.6% over the past year. [6] Home insurance rates have kept pace and increased faster in some areas. Over the past 16 months, premiums have risen 11% on average when people renew their policies, according to a Policygenius analysis of policy renewal data. In coastal areas like Georgia and Texas, the average increase was closer to 20%.

Homeowners insurance rates have been particularly affected by supply chain delays, labor shortages, and increased natural disasters, including hurricanes. Depending on the type of homeowners insurance policy you have, an increase in construction costs may mean you don’t have enough coverage to adequately repair it in the event of a hurricane.

For example, you may have insured your house for $250,000, but because of inflation, the cost to replace it if it’s destroyed may now be $300,000. That gap means you’ve become underinsured without even knowing it.

How to protect yourself from 2022’s hurricane season

First, protect yourself and your family from danger. Find out whether you live in a hurricane evacuation zone. If you do — and even if you don’t — make a plan for where you would go and how you would get there if you were forced to leave your house. Plan multiple routes if possible. Pack a “go bag” that includes things like water, non-perishable food, and a first aid kit.

On a community level, you can try to hold your leaders accountable for making sure plans for a “worst-case scenario” have adjusted for more extreme weather, Reed says.

“You can’t plan for Hurricane Sandy to happen again if you’re building back your evacuation systems and your coastal resiliency measures,” Reed says. “You should be preparing for Hurricane Sandy plus climate change.”

In terms of insurance, check to make sure your policy is robust enough to pay for the repair or replacement of your home in case it’s damaged in a storm. You may want to consider adding extended replacement coverage, which pays a certain percentage over your policy’s limit to rebuild your home.

“If building costs go up unexpectedly because there’s a shortage of building materials or construction workers, for example, you will have extra funds to cover the bill,” says Scott Holeman, a spokesman for the Insurance Information Institute.

Some companies offer a guaranteed replacement cost policy, which pays whatever it costs to rebuild your home before it was damaged, even if it exceeds the policy limit, Holeman says. This typically costs 5% to 10% on top of your total policy premium.

It’s also important to re-shop your homeowners insurance each year to make sure your coverage is up to date and that you’re not missing out on more affordable coverage with a different company.

“We always advise homeowners and renters to annually review their insurance needs,” Holeman says, adding: “Risk evaluation is more important than ever.”

Image: Natalie Nelson


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  • June 23, 2022: Due to a typo, a previous version of this story misstated the year-over-year inflation rate in May. It was 8.6%, not 8.5%.


Myles Ma, CPFC, is a certified personal finance counselor and former senior reporter at Policygenius, where he covered insurance and personal finance. His expertise has been featured in The Washington Post, PBS, CNBC, CBS News, USA Today, HuffPost, Salon, Inc. Magazine, MarketWatch, and elsewhere.

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