Outlook for 2018 Atlantic Hurricanes

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Colorado State University (CSU) released its updated outlook for the 2018 Atlantic hurricane season today, and they are now calling for a below-normal season with a total of 11 named storms (including Alberto which formed in May), four hurricanes and one major hurricane (maximum sustained winds of 111 miles per hour or greater; Category 3-5 on the Saffir-Simpson Wind Scale) (Figure 1). This prediction is a considerable reduction from their June outlook which called for 14 named storms, six hurricanes and two major hurricanes. Accumulated Cyclone Energy (ACE) and Net Tropical Cyclone (NTC) activity are integrated metrics that take into account the frequency, intensity and duration of storms.

Figure 1: July 2, 2018 outlook for the forthcoming Atlantic hurricane season.

CSU employs a statistical model as one of its primary outlook tools. The statistical model uses historical oceanic and atmospheric data to find predictors that worked well at forecasting prior year’s hurricane activity and has shown considerable skill based on data back to 1982 ). The statistical forecast for 2018 is calling for a below-average season.

CSU also uses an analog approach, whereby the team looks for past years with conditions that were most similar to what they see currently, and what they predict for the peak of the Atlantic hurricane season (August-October). The forecast team currently anticipates below-average to near-average sea surface temperatures (SSTs) in the tropical Atlantic and warm neutral to weak El Niño conditions in the eastern and central Pacific. This averaging of the five analog seasons also calls for a below-average season .

The primary reason for the reduction in the seasonal forecast was due to continued anomalous cooling of the tropical Atlantic. Most of the Atlantic right now is much cooler than normal. (Figure 4). In fact, current sea surface temperature anomalies in the tropical Atlantic are colder than any year since 1994. In addition to providing less fuel for storms, a cooler tropical Atlantic is also associated with a more stable and drier atmosphere as well as higher pressure. All of these conditions tend to suppress Atlantic hurricane activity.

CSU also believes that the chance has increased for a weak El Niño event developing to coincide with the peak of Atlantic hurricane season. El Niños tend to reduce Atlantic hurricane activity through increases in upper-level winds that tear apart hurricanes as they are trying to develop. The dynamical and statistical model guidance is about evenly split between El Niño and neutral (neither El Niño nor La Niña) conditions for the peak of the Atlantic hurricane season (August-October)

Coastal residents are reminded that it takes only one storm to make any hurricane season an “active” one. For example, CSU correctly predicted a quiet Atlantic hurricane season in 1992. The season, in fact, was very quiet, with only seven named storms, four hurricanes and one major hurricane—but that major hurricane happened to be Hurricane Andrew, which tore across south Florida as a Category 5.

Tornado Tips

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Warnings/watches

Remember that a watch means that weather conditions are favorable for tornadoes and a warning means one has been spotted in your area.

  • Learn the warning signals used in your community. If a siren sounds, that means stay inside and take cover.
  • Consider setting up a neighborhood information program through a club, church group or community group. Hold briefings on safety procedures as tornado season approaches. Set up a system to make sure senior citizens and shut-ins are alerted if there is a tornado warning.

Seeking shelter

Do not try to outrun a tornado. Instead, stay calm and seek shelter.

  • At home or work, seek shelter in the central part of the building, away from windows. Basements are the best havens. If this is not an option, take cover in the bathroom, closet, interior hallway or under a heavy piece of furniture.
  • If you are in your car, abandon your vehicle and seek shelter in the nearest ditch if no other facility is available.
  • People living in mobile homes should vacate the premises and seek shelter elsewhere.

Protecting your property

  • If a tornado watch has been issued, move cars inside a garage or carport to avoid damage from hail that often accompanies tornadoes. Keep your car keys and house keys with you.
  • If time permits, move lawn furniture and yard equipment such as lawnmowers inside. Otherwise they could become damaged or act as dangerous projectiles causing serious injury or damage.
  • Make an inventory of your possessions and store it off the premises. If your belongings are damaged, this list will help facilitate the claim filing process.

Car Insurance & Teens

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For parents, the excitement of having a first-time driver in the house is usually tempered with worry. With little driving experience, immature drivers are at a higher risk for accidents. Of course, safety concern is uppermost in most parents’ minds but other stressors—like the high cost of insuring your new driver and the financial liability implications of a teen driving mishap—can be reduced with these steps.

Before getting a learners permit, make a call to your insurance professional

Your agent or rep can clearly explain the costs involved in insuring a teenage driver. The good news is, as your teenager gets older, insurance rates will drop—providing he or she has a good driving record. Therefore…

Involve your teen in the car insurance discussion

From the outset, it’s important to talk to your kid about the relationship between driving a car and the attendant responsibilities, including insurance costs. Explain and reinforce driving safety tips and the serious consequences of driving infractions or accidents, including increasing the cost of insurance.

Encourage positive behaviors

Auto insurers offer discounts or reduced premiums to:

  • Students who maintain at least a “B” average in school
  • Teens who take a recognized driver training course
  • College students who attend school at least 100 miles away from home and don’t bring their car to campus

Choose the right auto insurance company

It’s generally less expensive for parents to add teenagers to their auto insurance policy than it is for teens to purchase one on their own. By insuring your teenager’s car with your insurer, you may also qualify for a multi-vehicle discount. That said, insurance companies differ in how they price policies for young drivers, so do some research into prices to be sure to find the best fit for you and your teen.

Assign your teen to the right car

Find out how your insurer assigns drivers to cars—some insurers will assign the driver who is the most expensive to insure (generally the teenager) to the car that is the most expensive to insure. If possible, assign your teen to the least valuable car.

Note that with this kind of arrangement there can be no exceptions; your teen must use only the car to which he or she is assigned, even in an emergency. If your teenager is involved in an accident with an unassigned car, penalties could be imposed and your own premiums might increase.

Increase your liability insurance for greater protection

If your teen gets into an accident, state minimums for liability insurance will not be enough to fully protect you from lawsuits. Consider purchasing higher amounts of liability coverage—if your teenager is found negligent in an accident and the damages exceed your insurance limits, you will be held financially responsible and could be sued in court for those amounts not covered by your insurance. Depending on the value of your financial assets, you may even want to have the extra protection that a personal umbrella liability policy provides.

Raise your deductible to save on your premium

The higher your deductible, the more money you can save on your premium, so consider raising your deductible from the minimum amount required. You may want to use those savings to increase your liability insurance.

Driving and Seniors

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Older drivers are keeping their licenses longer and driving more miles than ever before.

The high fatality rates of this age group reflect the fact that older drivers are more easily injured than younger people and are more apt to have medical complications and die of those injuries.

There is a growing need to help older drivers sharpen their skills as well as recognize their changing abilities and adapt their driving practices appropriately. Insurers have partnered with state and local governments, and groups such as AARP and the AAA Foundation for Highway Safety to create programs designed to address these needs.

Improving Older Driver Safety

According to the Governors Highway Safety Administration, impairments in three key areas—vision, cognition and motor function—are responsible for higher crash rates for older drivers. Vision declines with age; cognition, which includes memory and attention, can be impacted by medical problems such as dementia and medication side effects; and motor function suffers as flexibility declines due to diseases such as arthritis.

A 2018 report from TRIP, a nonprofit organization that studies transportation issues, calls for transportation improvements that will enable older Americans to maintain their mobility. Since there are about 46 million people age 65 or older, projected to more than double to over 98 million by 2060, roadway safety improvements are increasingly important as 90 percent of travel for this demographic takes place in a private vehicle. Almost 80 percent live in auto-dependent suburban and rural areas. Public transit accounts for only two percent of trips for older Americans. Ridesharing services can help seniors maintain their mobility although they often require the use of smartphones, which are owned by under one-third of older Americans. Self-driving and connected vehicles hold much promise for the mobility of older Americans.

Licensing requirements and restrictions

Many states routinely attempt to identify, assess and regulate older drivers with diminishing abilities who cannot or will not voluntarily modify their driving habits. According to the Insurance Institute for Highway Safety, 18 states require older drivers to renew their drivers licenses more often than the rest of the state’s residents. In addition, 18 states require more frequent vision tests for older motorists. Sixteen states and the District of Columbia prohibit older drivers from renewing licenses by mail or online. One state, Illinois, requires older drivers age 75 and over to take a road test at renewal and the District of Columbia requires a doctor’s approval for drivers over the age of 70 to renew their licenses.

Some states restrict driving activities for people with certain medical conditions or after a serious accident or traffic violation. Depending on their ability, older drivers may be limited to driving during daylight hours or on nonfreeway types of roads. In most states restrictions such as these can be placed on anyone’s drivers license, regardless of age, if his or her medical condition warrants it.

A 2014 study published in the journal Injury Epidemiology found that no policy in state drivers license renewal laws examined had a significant impact on fatal crash involvement of drivers younger than 85 years of age. However, two provisions had some effect on the involvement of older drivers in fatal crashes. Mandatory in-person renewal was associated with a 31 percent reduction in the fatal crash involvement rates of drivers ages 85 and older. In states where in-person renewal was not required, requiring drivers to pass a vision test was associated with a similar reduction for drivers age 85 and older. But in states where in-person renewal was required, mandating a vision test was not associated with any additional reduction, along with requiring a knowledge test or an on-road driving test. Results were also not statistically significant for laws that require more frequent renewal or requiring healthcare providers to report cases concerning their patients’ driving ability.

Insurance discounts

According to the National Association of Insurance Commissioners, as of January 2015, 34 states and the District of Columbia mandated premium discounts for older adults. (These state laws have not been changed since February 2013.) All but Massachusetts require older drivers (usually age 55 and over) to complete an approved-accident prevention course. In addition, 12 states mandate discounts to all drivers (including older drivers) who take defensive driving or other drivers’ education courses. In general, the state-mandated discounts apply to liability coverages because they are most relevant. The regulations can vary by state. For instance, in Massachusetts the older adult discount applies to all coverages for drivers over the age of 65.

In addition, some insurance companies offer discounts in the states in which they do business for drivers who complete defensive driving or other approved courses, including discounts for seniors who take AARP courses.

Hurricane Deductible Infographic

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The official Atlantic hurricane season runs from June through November, but occasionally storms form outside those months. September is the most common month for hurricanes making landfall in the U.S., followed by August and October, according to an analysis of 1851 to 2015 data by the National Oceanic and Atmospheric Administration. No hurricanes made U.S. landfall before June and after November during the period studied.

2018 Hurricane Forecast: Dr. Philip Klotzbach and Michael Bell of Colorado State University (CSU) released an updated forecast for the 2018 Atlantic hurricane season at the end of May. The CSU team now envisions a near-average season with 14 named storms, six hurricanes, and two major hurricanes. The May forecast is slightly lower than their original outlook which called for 14 named storms, seven hurricanes, and three major hurricanes. A typical year has 12 named storms, six hurricanes, and three major hurricanes, according to the National Oceanic and Atmospheric Administration (NOAA). Major hurricanes (Category 3 or higher) have sustained wind speeds of at least 111 miles per hour.

What is a Hurricane Deductible?

Insurance Guide 2018 Hurricane Season

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Hurricane season takes place June 1 – November 30 every year. Don’t wait until after you have a loss to check your insurance—review your homeowners or renters policies to make you have the right coverage in the event you’re hit with a destructive storm.


Make sure your home’s structure has adequate coverage

Standard homeowners insurance covers the structure of your house for disasters such as hurricanes and windstorms, along with a host of other disasters. It’s important to understand the elements that might affect your insurance payout after a hurricane, and adjust your policies accordingly.

  • Understand your hurricane/windstorm deductible – Insurers in every coastal state from Maine to Texas include separate deductibles for hurricanes and/or windstorms in their homeowners policies, stated on the Declarations (front) page of your homeowners policy.

A hurricane deductible is applied only to hurricanes, whereas a windstorm deductible applies to any type of wind. If your policy has a hurricane deductible, it will clearly state the specific “trigger” that would cause the deductible to go into effect.

Unlike the standard “dollar deductible” on a homeowners policy, a hurricane or windstorm deductible is usually expressed as a percentage, generally from 1 to 5 percent of the insured value of the structure of your home.

If you live in an area at high risk for hurricanes, your hurricane deductible may be a higher percentage. Depending on your insurer and the state where you live, you may have the option of paying more money in premiums in exchange for a lower deductible.

Like any deductible, a hurricane or windstorm deductible will affect the bottom line of your insurance payout. If you have a high hurricane or windstorm deductible consider putting aside the additional money you may need to rebuild your home.

One common exclusion is flooding. People tend to underestimate this risk, but 90 percent of all natural disasters—especially hurricanes—include some form of flooding. If you live in a flood zone or a hurricane-prone area, a separate flood insurance policy is a must.

Another common exclusion is sewer backups (which is also not covered by flood insurance) Sewer backup insurance is also good to have in hurricane-prone areas.

Get to know all of the exclusions in your policy and either talk to your insurance professional about purchasing separate coverage, or be prepared to pay out of pocket for the damages that are excluded in your policy.

  • If you own a co-op apartment or condo – check with your management company and the bylaws to understand what is covered under the building’s master insurance policy versus what damages you need to cover in your own co-op or condo owners insurance policy.

Make sure your possessions are adequately insured

Imagine the cost of repurchasing all of your furniture, clothing and other personal possessions. Whether you have homeowners insurance or renters insurance, your policy provides protection against loss or damage due to a hurricane.

  • Determine the value of your possessions with a home inventoryCreating a full inventory of your belongings and their value will make it easy to see if you are sufficiently insured for either replacement cost or cash value of the items. It will also help speed the insurance claims process and help provide proof of losses for tax or disaster aid purposes.
  • Review your policy to ensure you’re adequately covered – Homeowners policies provide approximately 50 to 70 percent of the amount of insurance you have on the structure of your home. If you rent, know that your landlord’s insurance will only cover the structure of your home—you need a renters policy to protect your possessions against loss or damage.

Make sure your policy provides enough coverage for additional living expenses

Additional living expenses (ALE) covers the extra costs incurred if you need to live elsewhere because your home is rendered uninhabitable as the result of a hurricane (or any other insured disaster). While your home or apartment is being repaired or rebuilt, ALE covers hotel bills, restaurant meals, etc.—expenses over and above what your customary living expenses would be at home. Generally, the ALE policy limit is 20 percent of the amount of insurance coverage on the structure of your home. Standard renters policies also provide for ALE.

  • Most insurers offer the option of higher coverage limits – Depending on where you live (which may dictate your expenses), you may want to consider a higher ALE.
  • ALE reimbursements may be limited to a specified amount of time – Make sure you’re comfortable with the time limits in your policy.
  • If you rent out part of your home, ALE coverage also reimburses you for lost rental income. Make sure your policy reflects the current amount of your rental income.

2018 Atlantic Hurricane Forecast

Courtesy of iii.org

On Thursday April 5th Philip J. Klotzbach and Michael M. Bell, scientists with the Colorado State University, issued their 2018 Atlantic Hurricane Forecast. The forecast anticipates slightly above-average activity for the 2018 Atlantic basin hurricane season.

There is slightly above-average probability of a major hurricanes making landfall along the continental United States coastline and in the Caribbean.

Klotzbach and Bell estimate that 2018 will have 7 hurricanes (median is 6.5), 14 named storms (median is 12.0), 70 named storm days (median is 60.1), 30 hurricane days (median is 21.3), 3 major (Category 3-4-5) hurricane (median is 2.0) and 7 major hurricane days (median is 3.9). The probability of U.S. major hurricane landfall is estimated to be about 120 percent of the long-period average.

Probabilities for at least one major hurricane landfall on each of the following coastal areas:

  • Entire continental U.S. coastline – 63% (average for last century is 52%)
  • U.S. East Coast Including Peninsula Florida – 39% (average for last century is 31%)
  • Gulf Coast from the Florida Panhandle westward to Brownsville – 38% (average for last century is 30%)

As is the case with all hurricane seasons, coastal residents are reminded that it only takes one hurricane making landfall to make it an active season for them. They should prepare the same for every season, regardless of how much activity is predicted.

Click here for the full forecast.

Dr. Philip Klotzbach is a non-resident scholar for the Insurance Information Institute (I.I.I.)

What is Business Interruption Insurance?

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Business interruption insurance can be as vital to your survival as a business as fire insurance. Most people would never consider opening a business without buying insurance to cover damage due to fire and windstorms. But too many small business owners fail to think about how they would manage if a fire or other disaster damaged their business premises so that they were temporarily unusable. Business interruption coverage is not sold separately. It is added to a property insurance policy or included in a package policy.

A business that has to close down completely while the premises are being repaired may lose out to competitors. A quick resumption of business after a disaster is essential.

  1. Business interruption insurance compensates you for lost income if your company has to vacate the premises due to disaster-related damage that is covered under your property insurance policy, such as a fire. Business interruption insurance covers the revenue you would have earned, based on your financial records, had the disaster not occurred. The policy also covers operating expenses, like electricity, that continue even though business activities have come to a temporary halt.
  2. Make sure the policy limits are sufficient to cover your company for more than a few days. After a major disaster, it can take more time than many people anticipate to get the business back on track. There is generally a 48-hour waiting period before business interruption coverage kicks in.
  3. The price of the policy is related to the risk of a fire or other disaster damaging your premises. All other things being equal, the price would probably be higher for a restaurant than a real estate agency, for example, because of the greater risk of fire. Also, a real estate agency can more easily operate out of another location.

Extra expense insurance

Extra expense insurance reimburses your company for a reasonable sum of money that it spends, over and above normal operating expenses, to avoid having to shut down during the restoration period. Usually, extra expenses will be paid if they help to decrease business interruption costs. In some instances, extra expense insurance alone may provide sufficient coverage, without the purchase of business interruption insurance.

2018 Guide for Renter’s Insurance

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If you rent a house or apartment and experience a fire or other disaster, your landlord’s insurance will only cover the costs of repairing the building. To financially protect yourself you will need to buy renters or tenants insurance.


Renters insurance protections

Like homeowners insurance, renters insurance includes three key types of financial protection:

  • Coverage for personal possessions
  • Liability protection
  • Additional living expenses (ALE)

The big difference is that renters insurance doesn’t cover the building or structure of the apartment?that’s the landlord’s responsibility.

The following questions will help you choose the right coverage when you are shopping around for renters insurance or discussing your needs with an insurance professional.

Coverage for personal possessions

Coverage for your personal property is a key component of renters coverage, protecting you from theft, fire and a host of other unfortunate events.

1. How much insurance should I buy?

Make sure you have enough insurance to replace all of your personal possessions in the event of a burglary, fire or other covered disaster. The easiest way to determine the value of all your personal possessions is to create a home inventory?a detailed list of all of your belongings along with their estimated value.

2. Should I choose replacement cost or actual cash value coverage?

Actual cash value policies include a deduction for depreciation (that is, the idea that items lose value over time). Replacement cost coverage is pricier but can be well worth the extra expense if your belongings are damaged or destroyed (think about how much you’d get for your TV used versus how much it would actually cost to replace).

3. What disasters are?and are not?covered?

Renters insurance covers you against losses from fire or smoke, lightning, vandalism, theft, explosion, windstorm and certain types of water damage (such as from a burst pipe or when the tenant upstairs leaves the water running in the bathtub and floods your apartment).

Like standard homeowners policies, most renters insurance policies do not cover floods or earthquakes. Flood coverage is available from the National Flood Insurance Program and a few private insurers. You can get earthquake insurance as a separate policy or have it added as an endorsement to your renters policy, depending on where you live.

4. What is my deductible, and how does it work?

A deductible is an amount of money you responsible for paying before your insurance coverage. For example, if you have a $500 deductible and a fire destroys $5000 worth of furniture, the first $500 is your responsibility and your insurance company will cover $4500.

Renters insurance deductibles are generally specified as a dollar amount, which can be found on the Declarations page of your policy. In general, the larger the deductible, the lower your insurance premium.

5. What is a “floater” and do I need one?

A floater is a separate policy that provides additional coverage for more costly valuables if they are lost or stolen. If you have expensive jewelry, furs, collectibles, sports equipment or musical instruments, consider adding a floater to your policy to protect against their loss.

6. Am I covered if I am traveling or away from home?

Most renters polices include what is called off-premises coverage, which means belongings that are outside of your home are covered against the same disasters listed in your policy. For example, property stolen from your car or a hotel room while you’re traveling would be protected.

Liability protection

7. What is liability insurance?

Renters insurance provides liability protection that covers you against lawsuits for bodily injury or property damage done by you, your family members and even your pets. This coverage pays for the cost of defending you in court, up to the limit of your policy.

Your renters policy should also include no-fault medical coverage as part of the liability protection. Medical payments coverage allows someone who gets injured on your property to simply submit his or her medical bills directly to your insurance company so the bills can be paid without resorting to a lawsuit.

8. Do I have enough liability insurance?

Make sure the amount of liability coverage provided by your policy is sufficient to protect your financial and other material assets in the event of a lawsuit.

9. Do I need an umbrella liability policy?

If you need a larger amount of liability protection, consider purchasing a personal umbrella liability policy. An umbrella policy kicks in when you reach the limit on the underlying liability coverage provided by your renters or auto policy. It will also cover you for things such as libel and slander.

Additional living expenses

Additional living expenses (ALE) coverage provides coverage if your home is destroyed by an insured disaster and you need to live elsewhere for a time.

9. What does ALE cover?

The additional living expenses portion of your rental insurance policy pays for hotel bills, temporary rentals, restaurant meals and other expenses you incur while your rental home is being repaired or rebuilt. Essentially, it covers the expenses you would not have to incur if you had your usual roof over your head.

10. How much does ALE cover?

Most policies will reimburse you the full difference between your additional living expenses and your normal living expenses; however, there are generally limits as to the total amount the insurer will pay or time limits specifying how long you’re eligible for the ALE payments. Make sure you’re comfortable with the limits of the policy you choose.

Multiple policy and other discounts

10. What types of discounts are offered on renters insurance?

Insurance companies often offer discounts on renters insurance if you have another policy with them?for example, car insurance or business insurance.

You may also get a discount if you:

  • Have a security system
  • Use smoke detectors
  • Use deadbolt locks
  • Have good credit
  • Stay with the same insurer
  • Are over 55 years old

Discounts may vary widely by insurance company and by state, so review your options carefully. As always, the same rule-of-thumb applies: shop around for the best deal.

Beneficiaries & Life Insurance

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A beneficiary is the person or entity you name in a life insurance policy to receive the death benefit. You can name:

  • One person
  • Two or more people
  • The trustee of a trust you’ve set up
  • A charity
  • Your estate

If you don’t name a beneficiary, the death benefit will be paid to your estate.

Two “levels” of beneficiaries

Your life insurance policy should have both “primary” and “contingent” beneficiaries. The primary beneficiary gets the death benefits if he or she can be found after your death. Contingent beneficiaries get the death benefits if the primary beneficiary can’t be found. If no primary or contingent beneficiaries can be found, the death benefit will be paid to your estate.

As part of naming beneficiaries, you should identify them as clearly as possible and include their social security numbers. This will make it easier for the life insurance company to find them, and it will make it less likely that disputes will arise regarding the death benefits. For example, if you write “wife [or husband] of the insured” without using a specific name, an ex-spouse could claim the death benefit. On the other hand, if you have named specific children, any later-born or adopted children will not receive the death benefit?unless you change the beneficiary designation to include them.

Besides naming beneficiaries, you should specify how the benefits are to be handled if one or more beneficiaries can’t be found. For example, suppose you have two children and you name each one to receive half of the death benefit. If one of the children dies before you do, do you want the other child to get the entire death benefit, or the deceased child’s heirs to get his or her share?

If the death benefit goes to your estate, probate proceedings could delay distributing the money, and the cost of probate could diminish the amount available to your heirs.

Choosing beneficiaries, and keeping those choices up-to-date, is an important part of owning life insurance. The birth or adoption of a child, marriage or divorce can affect your initial choice. Review your beneficiary designation as new situations arise in order to make sure your choice is still appropriate.