Millions of homeowners could face financial struggle from extreme weather event

Today (September 10) marks the peak of the Atlantic hurricane season, but even as extreme weather events become more common, millions of Americans are leaving their most significant asset exposed.

Not only is the roof over their heads at risk but also their financial security, with even the cost of the insurance deductible likely to mean new debt for many homeowners according to a new report.

The Bankrate.com research found that one in four homeowners who took part say they are financially unprepared for an extreme weather event, with 14% of these somewhat unprepared and 14% very unprepared.

If their home were to be damaged by an incident such as a storm, flooding, or wildfire, 15% of respondents said they would have to take on debt to pay the deductible required by their insurance policy. That said, 13% do not know the size of the deductible and 7% don’t have homeowners insurance.

Despite the financial jeopardy, 43% of respondents said they have done nothing in the last five years to ensure their property is protected from extreme weather events, although 39% have reviewed their insurance coverage and 29% changed their coverage as a precautionary measure.

“Extreme weather has changed the insurance landscape and understanding your home insurance policy coverage is more critical now than ever,” said Bankrate analyst Shannon Martin. “Many insurance companies have reevaluated how they rate extreme weather, and some have changed the perils they are willing to cover. Reviewing your insurance policy to ensure you have proper coverage is the best first step.”

A recent report said that the average premium for homeowners insurance is expected to rise 6% this year, following an increase of roughly 20% over the past two years, amid intensifying natural disasters.