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NEW YORK, June 30, 2003 - Coastal areas have seen a population boom of over 31 percent in the last 30 years. With more than 68 million people now living in hurricane-vulnerable locations, a major storm could be catastrophic and cause billions of dollars in property damage, warns the ÐÓ°ÉÔ­´´ Information Institute (I.I.I.)

The Atlantic and Gulf coasts are at high risk during hurricane season, which runs through November. The risk of severe windstorms and high property values make Florida the state with greatest exposure to losses. New York's Long Island and coastal areas of Texas and South Carolina are also at risk during hurricane season and have experienced tremendous increases in population and development.

To make private insurance available and more affordable in hurricane-prone locations, 17 states allow insurers to use catastrophe deductibles for hurricanes and windstorms. They are in the form of a percentage rather than a dollar deductible. Catastrophe deductibles range from 1 percent to 15 percent of the home's insured value. A coastal resident with a home insured for $200,000 could be responsible for at least $2,000 and perhaps as much as $30,000 worth of storm damage before the insurance kicks in. In some states, consumers have a "buy back" option, and can pay a higher premium in exchange for a dollar deductible. There may also be the option of a supplemental policy that will cover the deductible.

Colorado State University hurricane researcher Professor William Gray predicts "higher than average hurricane activity this year with 14 named storms of which eight are expected to be hurricanes, three of them intense." A storm is named when it reaches tropical storm strength with winds of 39 mph. A storm becomes a hurricane when its wind speed reaches 75mph.

Hurricane Andrew, which struck in August of 1992, caused $15.5 billion in insured property damage making it the most costly natural insured catastrophe in U.S. history. It is estimated that if it had hit Miami (which was only 20 miles away), the cost could have exceed $50 billion.

Over the past 10 years, insurers paid out more than $100 billion in catastrophe-related losses-about $700 million per month-many times more than in previous decades. Catastrophes include well-known events such as Hurricane Andrew and the Northridge earthquake, but also hundreds of smaller disasters associated with tropical storms, wildfires, hail, and snow. The extraordinary costs associated with these disasters is one of the primary reasons for the rising cost of homeowners insurance which is estimated to go up 9 percent in 2003, according to research conducted by the Institute.

Increasingly, the insurance industry has focused on measures that prevent or reduce damage caused by natural disasters. Insurers have formed a new organization, the ÐÓ°ÉÔ­´´ Building Code Coalition, to press for stronger, standardized building codes nationwide and proper enforcement. An added advantage of a uniform code is that adjusters and building inspectors trained in one part of the state can be deployed to help in other parts that suffer a disaster, thus expediting the rebuilding process. Through the Institute for Business & Home Safety (IBHS) , insurers are supporting a program, "Fortified..for safer living," to protect lives and property through code-plus construction that better withstands natural disasters. In hurricane-prone regions, this means increasing the structure's ability to withstand high wind, and decreasing the chance flying debris will penetrate doors and windows. Once wind gets in, a home faces pressure from the inside as well as the outside, multiplying its chance of destruction and destroying the home's interior and contents in the process.

Windstorms are covered by standard homeowners, renters and mobile home policies and include:

• The cost of rebuilding the home
• Replacing personal items
• Reimbursement for additional living expenses and lost rental income.

"The very real threat of severe windstorms is why we need insurance. It provides financial protection for disasters that most people would not be able to afford on their own," says the I.I.I's Vice President of Consumer Affairs, Jeanne M. Salvatore. "ÐÓ°ÉÔ­´´ prices are going up in part because of the increased cost of reinsurance, construction and repairs and because more people live in places prone to catastrophes."

The I.I.I. suggests that consumers:

• Review insurance coverage now: Make sure it is up-to-date with major additions, alterations or lifestyle changes. Maintain enough insurance to rebuild your home and replace everything in it and ask about:
• Replacement cost coverage for personal possessions: This pays to replace items without a reduction for depreciation.
• Guaranteed or extended replacement cost: If available, these policies provide additional protection over and above the cost to rebuild the home.
• Inflation guard: Adjusts the rebuilding costs to reflect changes in costs.
• Building code upgrade: Also referred to as ordinance or law, this would pay to rebuild a home to today's tougher building codes if a home is damaged or destroyed by a hurricane or other insured disaster.
• Water back-up: Insures property for damage caused by the back-up of sewers or drains.
• Consider flood insurance: Ninety percent of disasters involve some form of flooding. Damage from flooding is not covered under standard homeowners or business insurance policies. Instead, it is available from the federal government's National Flood ÐÓ°ÉÔ­´´ Program . Coverage is available from insurance agents or company representatives. Claims are handled with the same insurance professional. It is also available for renters and condominiums or co-op owners. There is a 30-day waiting period.
• Create your own disaster preparedness plan: The Federal Emergency Management Agency suggests that disaster preparedness plans be simple and easy to remember and suggests that residents:
  
  • Have an emergency preparedness kit: This should include a battery-operated radio, flashlight with extra batteries, prescription medications, first aid kit, emergency food and water, cash, sturdy shoes and a change of cloths.
  • Post emergency contact numbers near the phone to make it easy during an emergency: List school and workplace numbers, as well as fire, policy, ambulance and family or friends who may be helpful in an emergency. Teach children how to use this information.
  • Learn how to shut off utilities: Review this with family and place reminder notes to make it simple in an emergency.
  • Identify a family meeting place: If loved ones become separated in a disaster, they need to know exactly where to meet. Decide on this location ahead of time. Ask an out-of-state relative or friend to serve as the family contact and make sure that everyone knows the number.
  • Plan escape routes ahead of time: If the local or national authorities suggest evacuation, heed the warning and leave as soon as possible. It can be difficulty to leave many densely populated areas - especially during the summer tourist seasons. Plan what to do with pets ahead of time.

Consumers who need additional information should contact their insurance professional and check the I.I.I.'s website at or call the National ÐÓ°ÉÔ­´´ Consumer Helpline at 800-942-4242.