Hurricanes may cause more pain for pandemic-hit insurers

Facts + Statistics: Mortality risk

Hurricanes may cause more pain for pandemic-hit insurers

The number of U.S. deaths by firearms, which are defined as the types of guns that can be carried by a person, is higher than the number of Americans killed in motor vehicle crashes.

In 2018 about 39,740 people died by firearms, down 0.1 percent from 39,773 deaths in 2017. In contrast, according to latest data from the National Highway Traffic Administration, 36,096 people died in U.S.

motor vehicle crashes in 2019. (See data here.)

Mortality risks

In February 2020 a new mortality risk emerged. The novel coronavirus disease 2019, known as COVID-19, was officially identified by the World Health Organization (WHO). The first outbreak was detected in Wuhan, China, in January 2020.

Symptoms of the disease generally include mild to severe respiratory illness with fever, cough, and difficulty breathing, although some who contract the virus may be asymptomatic and contagious. By April the virus had spread to every continent except Antarctica. Between January 2020 and March 23, 2021 the WHO reported that there were 123.

2 million cases worldwide, and 2.7 million people had died from the virus. Updates from the WHO can be found here.

In the United States the first confirmed case of COVID-19 infection was reported on January 20, 2020 in Snohomish County, Washington. By April, the virus was reported in all 50 states and most territories. According to the U.S.

Centers for Disease Control and Prevention, between January 21, 2020 and March 22, 2021 there were 29.7 million cases of COVID-19 in the United States and the virus had claimed 540,000 lives. Daily updates can be found here.

The number of COVID-19 deaths in the United States is approaching the estimated 675,000 Americans who died in the 1918 Flu Pandemic.

Heart disease was the leading cause of death in the United States, accounting for 655,381 fatalities in 2018, the latest year for which final data exist, according to the National Center for Health Statistics.

Age-adjusted death rates (which factor out differences age) fell significantly in 2018 compared with 2017 for eight the 15 leading causes of death. There was a significant increase in the 2018 death rate for influenza and pneumonia, which ranked eighth in 2018, with 59,120 fatalities. Pandemic influenza viruses have the potential to be far more deadly.

An estimated 675,000 Americans died during the 1918 Spanish influenza pandemic, the deadliest and most infectious known influenza strain to date.

Odds of dying from accidental injuries

The chart below shows the lihood, or odds, of dying as a result of a specific type of accident. The odds of dying over a one-year period are the U.S. population as a whole, not on participants in any particular activity or on how dangerous that activity may be.

For example, more people are killed in auto accidents than in motorcycle accidents or airplane crashes, not because riding a motorcycle or traveling in an airplane is more or less dangerous, but because far more people travel by car. Drug poisoning is the leading cause of injury death in the United States.

The lifetime chances of dying from accidental drug poisoning were one in 71 in 2018, compared with one in 608 in a car accident and one in 180,746 for fatal injuries caused by lightning.

  • The odds of dying from an injury in 2018 were 1 in 1,334 according to the latest data available.
  • The lifetime odds of dying from an injury for a person born in 2018 were 1 in 17.
  • The odds of dying from a drug poisoning of any kind were 1 in 5,554 in 2018; the lifetime odds were 1 in 71 for a person born in 2018.

The opioid crisis

Opioid abuse and addiction is recognized as a significant public health problem in the United States. Drug overdose, from prescription and illegal drugs combined, is the leading cause of injury death in the United States.

Between 2000 and 2019 deaths from drug overdoses increased four-fold from 17,415 in 2000 to 70,630 in 2019, according to the Centers for Disease Control and Prevention (CDC). In 2019 drug overdose deaths rose 4.8 percent from 2018 to 70,630, following a 4.1 percent decline in 2018 that was the first decline in 28 years.

Opioid analgesics, a group of prescription drugs that are used to alleviate chronic and acute pain, have been increasingly involved in the rise of drug overdose deaths over the same period.

In 2000 there were 8,407 deaths attributed to opioids of all kinds, with prescription drugs and illegal drugs such as heroin, accounting for about half of all drug overdose deaths. By 2019 that proportion had grown to 71 percent. Heroin alone accounted for 11 percent of all drug overdose deaths in 2000 and grew to 20 percent in 2019.

Many states and municipalities have filed lawsuits against the pharmaceutical companies that they hold responsible for the current opioid epidemic.

The lawsuits attempt to seek reimbursement for healthcare expenses, substance abuse treatment, social services, court and correctional expenses and other costs resulting from opioid abuse. In 2018 around 2,300 lawsuits against opioid manufacturers, distributors and pharmacies were consolidated under one federal judge.

The plaintiffs included almost 200 municipal governments, all pursuing reimbursement for the costs of drug addiction and its collateral damage. One case, the State of Oklahoma v. Purdue Pharma, was settled in March 2019 as the company and its owners, the Sackler family, ultimately agreed to pay $270 million.

This was the first class-action settlement related to opioid litigation. The company declared bankruptcy in September. In October 2020 Purdue Pharma pled guilty to three criminal charges brought by the U.S. Justice Department for conspiracy to defraud the United States, violate an anti-kickback law and false representation.

The company faces more than $8 billion in financial penalties. Sackler family members who own Purdue Pharma said they would provide $4.275 billion to help settle about 3,000 lawsuits brought by U.S. communities seeking to hold them and Purdue responsible for damage from its product, OxyContin.

The offer is included in a bankruptcy restructuring plan, which blocks further civil litigation but does not release the Sacklers from criminal investigation. Among its provisions the plan would create a new company whose revenues would be devoted exclusively to alleviating the addiction epidemic caused by its product.

 In October 2019 the court of the Northern District of Ohio was set to try three consolidated Ohio lawsuits in a test case against four entities—three distributors and one manufacturer. The case was ultimately settled for $260 million, with the money designated to help fight opioid addiction.

A June 2017 report issued by the Blue Cross Blue Shield Association found that diagnoses of opioid-use disorder (addiction to opioids, including prescription painkillers and illegal narcotics such as heroin) increased almost 500 percent between 2010 and 2016.

The study examined claims from 30 million people who had commercial insurance provided by Blue Cross Blue Shield insurers. It found that opioid-use disorder was 40 times more ly in patients prescribed high doses for a short duration, compared with low doses for a short duration.

Opioid-use disorder was seven times more ly when patients were prescribed a high dose for a long duration, rather than a low dose for a long duration.

In addition, 21 percent of Blue Cross and Blue Shield (BCBS) commercially-insured members filled at least one opioid prescription in 2015, according to the report.


How To Make A Home Insurance Claim For Roof Damage

Hurricanes may cause more pain for pandemic-hit insurers

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If your roof needs to be replaced, be prepared for an average bill of $24,700 for asphalt shingles and $40,318 for metal roofing, according to a 2020 report from Remodeling magazine. Of course, this will depend on the roof size and your location.

Home insurance can cover the cost after certain types of damage, but you can’t always count on an insurance payment.

Types of Roof Damage Covered by Homeowners Insurance

The dwelling coverage portion of your homeowners insurance covers the house structure, including the roof.

Types of roof damage covered by your insurance will depend on the policy’s terms and the reasons your roof needs to be repaired or replaced. Typically, a policy covers problems that are sudden or accidental, and caused by certain events such as wind, fire, hail or the weight of snow.

Insurance for partial damage. In some cases, the lifespan of the roof is shortened because of damage. Your insurer may cover the cost to replace the entire roof even if it’s only partially damaged.

For example, if a homeowner has asphalt shingles damaged by hail strikes, an adjuster would count how many strikes occurred in a section to determine the impact on the lifespan of the roof.

If there are enough strikes, the roof lifespan is substantially impacted and it needs to be replaced.

“Even if a roof isn’t taking in water right now, the erosion or strikes compromise the lifespan of the roof. This means a roof will never last as long as it should have lasted otherwise, therefore it should be replaced,” Steve Severaid, senior vice president & treasurer with The Greenspan Company/Adjusters International.

Insurance for matching issues. If the materials to fix your roof are unavailable, your insurance company may have to replace the entire roof. For example, if you have slate tile that you can’t get any more, you may have to replace the entire roof to ensure materials match.

Home insurance companies in past years have been walloped by numerous and expensive roof claims. To combat this, many home insurers have implemented different coverage levels for wind and hail damage vs. roof damage from other causes. You might find that:

  • You can buy only “actual cash value” coverage for wind and hail damage if your roof is too old to qualify for replacement value coverage. Your insurance reimbursement will be the depreciated value of the roof at the time of the damage. This will take into account the age of the roof and its materials. The upshot is that you could get substantially less money than you need to replace the roof. You’ll have to pay the difference.
  • If your roof is newer and in good shape, you may be able to buy roof replacement cost coverage. This will pay you the full amount to get a new roof.

Other Things Not Covered

Additionally, since it’s your responsibility to maintain your home, policies don’t cover damage caused by a lack of maintenance. So repairing your roof due to wear and tear, or replacing it because its lifespan is over, won’t be paid for by insurance.

Lack of maintenance could also come back to bite you after a storm. If your roof was old or not well-maintained before the storm, you could have trouble getting full reimbursement.

Homeowners insurance also won’t cover damage caused floods or earthquakes, including roof damage. If you live in an area at risk for these disasters, consider flood insurance or earthquake insurance.

More Roof Issues

Have a wood roof? You may pay more for home insurance. For example, Farmers Mutual Insurance Co. of Nebraska charges 25% more for dwelling coverage if you have a wood roof.

Have a metal roof? Cosmetic damage from hail may not be covered.

Get a better roof than before: Insurance companies usually don’t pay to give you something better than what you had before. But you may be able to buy a “fortified roof endorsement” that will replace your non-fortified roof with a better one if the entire roof requires replacement. Fortified roofs are made to meet standards set by the Institute for Business & Home Safety.

Consider Your Deductible

The deducible is the amount you must pay for repairs before your insurance company covers the rest of the cost.

In some states insurers can have a special deductible for wind and hail damage from hurricanes. So if your roof blows off in a hurricane, you may find you have a higher deductible to deal with. The regular deductible still applies to other types of damage, such as a fire.

Do You Want to Exclude Wind and Hail?

Usually homeowners want good and broad coverage for their homes. But wind and hail is a different ballgame in many states. Insurers pass along the costs of past wind and hail claims to current homeowners. You may be able to choose to exclude wind and hail from coverage in the interest of saving money.

For example, in Florida, State Farm offers these choices:

  • Keep the wind and hail coverage offered in the homeowners policy.
  • Exclude wind and hail damage from coverage in order to save money.
  • Take a separate, higher deductible for wind and hail damage from hurricanes in order to save money.

Tips for Filing a Roof Claim

Review your insurance policy. The first good step in making a roof claim is to try to understand your policy. There’s no point going to battle for coverage that you never had. For example, is the roof damage actually covered, or did you choose to exclude wind and hail damage? Is your coverage for replacement cost or actual cash value?

Assess the damage. If you suspect there is roof damage from a storm, inspect your entire home, not just the roof. You’ll want to know the scope of the damage when you contact your insurer to start a claim.

Getting an estimate. Get an estimate for repair what you had, not on how you want to change things. Don’t rely on the adjuster to determine the repair cost of the roof. Make sure to get a written estimate on a roofing company’s letterhead with the company’s contact information.

Be prompt. Time is of the essence when dealing with a roof claim. “The longer a roof sits with damage, the more weather and dirt makes it less obvious what the damage is since it looks wear and tear,” says Severaid.

Keep a log of correspondence. What starts out as a seemingly simple claim could blow up into a nightmare. You’ll be glad if you kept records from the start, including photos, who you spoke to and when, and what they told you.

Tips: What to Do If You Get Roof Damage

Protect the home from further damage. If a tornado rips through your neighborhood and tears part of your roof off, protect your home from further damage. In fact, preventing further damage when possible is often a requirement in homeowners policies, and further damage may not be covered. You may need to put up a tarp while you alert your insurer.

Don’t let the insurance company boss you around. Insurance companies are a business and may not have your best interests in mind when it comes to paying out roof damage claims. If you’re not doing a good job of explaining what they should be paying you, they have no fiduciary obligation.

You’re entitled to fair trade pricing, so make sure you have a solid repair estimate. If you have a large or complicated claim, consider hiring a public adjuster to work on your behalf.

Don’t get multiple estimates. If you get multiple estimates, your insurance company will want to see all of them and may only accept the lowest one. The lowest estimate may not be the best quality.

Consider roof material that can get you an insurance discount. Research materials that will be more durable than your past roof. Your insurance company might be willing to offer a discount for impact-resistant roofing. Check with the insurer on roof material discounts before you make a final pick.

Watch out for roof repair scams. Scams often grow In the aftermath of large storms. People looking to prey on vulnerable homeowners might go around the neighborhood offering quick repairs and telling you that they detected roof damage that you can’t see. Watch out for:

  • Insisting on big payments upfront: If a contractor wants more than 10% or $1,000 down, be wary. Laws often say that contractors can’t require larger deposits for home improvement contracts.
  • Check licensing: While not all states require a roofing license, it’s wise to work with a licensed contractor so you know they meet proper professional standards.

A standard home insurance policy covers water damage and leaks for certain types of accidents—for example, if a fallen tree branch causes a roof leak. 

Home insurance won’t cover a leaky roof that’s been neglected or poorly maintained. For example, if your roof is old and needs to be replaced, your home insurance most ly won’t cover water damage from leaks.

Home insurance for hurricane-related damage can be a bit tricky. Home insurance generally covers wind damage to roofs, but some insurers exclude certain types of hurricane-related damage. For example, some insurers in Atlantic coastal states will exclude wind-related damage, meaning roof damage won’t be covered by a standard home insurance policy. 

You might need windstorm insurance as an endorsement to your home insurance policy or as a standalone policy. If you live in an area that’s prone to hurricanes, talk with an agent to make sure there are no gaps in your coverage.  A good hurricane insurance plan is typically a mix of homeowners insurance, flood insurance and wind insurance (if needed separately).

Fraudulent contractors often take advantage of homeowners after an area has been hit by severe storms. A typical roof repair scam involves a contractor who demands payment up front and often takes off with the cash. If they do the work, it’s usually shoddy, incomplete and substandard materials. 

The National Insurance Crime Bureau says to be aware of contractors who insist on up-front payment before they begin work or offer lowball bids that come in much lower than other contractors. They may even offer a “special hurricane deal” or say they’ll rebate your home insurance deductible. 

If your roof is damaged after a storm, it’s a good idea to coordinate with your insurance company and get more than one estimate from licensed and insured contractors. Make sure you get a signed contract before the work begins that specifies the cost, time schedule and any other expectations.


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