Homeowners in Jasper and Beaufort Counties were part of the Coastal Georgia/Hilton Head-Beaufort Area.

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1 Coastal South Carolina Homeowners Among Top 10 in Hurricane Preparedness, New Hurricane Readiness Index Finds ** Average South Carolina Homeowners Have Taken More than Half of the Steps Needed to Recover from Another Major Storm ** Signs of Preparedness Mixed with Need for Further Action WASHINGTON (July 6): Insured homeowners along the South Carolina coast have, on average, taken between percent of the steps to prepare their homes and property to recover from a major hurricane, according to a new Hurricane Readiness Index released today. This means homeowners on the South Carolina coast are more prepared on average than those in the Gulf and Atlantic states, whose overall index rating from Texas to Maine is 48 percent. The Index is based on a survey in which homeowners were asked whether they had taken eight key preparedness steps. For purposes of this survey, homeowners in the following counties were titled Coastal South Carolina : Colleton, Dorchester, Berkeley, Williamsburg, Georgetown, Charleston, Horry and Marion. Homeowners in Jasper and Beaufort Counties were part of the Coastal Georgia/Hilton Head-Beaufort Area. The survey also found that while over 70 percent of Coastal South Carolina homeowners know their homeowners insurance policies don t cover floods, only between a quarter and a half of them said they have flood insurance. This discrepancy indicates that more South Carolinians should consider flood insurance for their property. Homeowners along the Southeast coast, who are more experienced with hurricane damage and preparedness, lead the nation in personal readiness, but there are still steps that need to be taken, said Dr. Bob Sheets, former director of the National Hurricane Center, who presented the poll at a news conference in Washington today. It s good news that people there have taken a range of steps to get ready, but every coastal resident in the region should also consider what else needs to be done before they re fully prepared. The forecasters are pretty sure this could be a fierce hurricane season with a better than average chance of a major hurricane (CAT 3, 4 or 5) hitting the US this year, Sheets added. The numbers come from a survey taken after months of post-katrina news stories and reports marking the start of this year s hurricane season. It s not too late to get ready, said Jeanne Salvatore, Senior

2 Vice President of the Insurance Information Institute (III). but it s close. There is a 30-day waiting period to get federal flood insurance to take effect. So homeowners need to call their agents now to make sure their coverage is up to date. There are also things people can do that don t cost a thing it s just a matter of getting it done now, while there is still time. We recognize that finding affordable homeowners insurance is becoming difficult in some coastal communities, said Salvatore. There are several different reasons for this - all of them rooted in increased costs and increased risk. Coastal property values and the cost of construction have soared in recent years, the cost of reinsurance has doubled for some insurers and forecasting models now show a historically high likelihood of a major storm hitting the coast this year 56 to 100% higher than the annual odds over the last century. The poll, taken at the request of seven major insurance companies, surveyed 4,200 respondents in Gulf and Atlantic coastal communities over two weeks in mid-june. The margin of error on the survey-wide sample is +/- 1.5%. The Hurricane Readiness Index for Coastal South Carolina was compiled from answers to specific preparedness questions, including: PREPAREDNESS STEPS COASTAL SC COASTAL GA/HILTON HEAD/BEAUFORT ATLANTIC / GULF COAST Have a personal disaster evacuation plan or kit 55% 51% 44% Reviewed homeowners insurance policies within the 68% 76% 69% past 12 months Updated homeowners insurance policy in the past 5 72% 73% 69% years Made an inventory of their personal possessions 38% 44% 37% Made improvements to their home to prepare for a 32% 25% 27% hurricane Homeowners with insurance who have a separate flood 24% 52% 23% policy Feel they have the right amount of insurance coverage 54% 51% 48% Stored important documents in a safe place 39% 39% 38% We ve been vigilant about communicating the importance of hurricane and insurance preparedness, and these results show that we re making good progress, but that more must be done, said Allison Dean Love of the South Carolina Insurance News Service. In South Carolina, we ve been urging homeowners to make this a priority. We ve been urging homeowners to have an up-to-date home inventory, to be sure that their homes are insured to value, to know their deductible ahead of a storm so they re aware of how much money they ll need to pay out of pocket, and to purchase flood insurance even if they aren t in a flood plain. The companies sponsoring the poll are Allstate, The Hartford, Liberty Mutual, Nationwide, State Farm, Travelers and USAA.

3 Each company has ongoing education programs, as does the non-profit Insurance Information Institute, which today launched an updated consumer education Web site, It provides readiness tips, helps assess appropriate levels of insurance, and provides free easy-to-use software to help homeowners inventory and document their possessions. The South Carolina Insurance News Service also has state-specific information on its Web site, We know getting ready and checking insurance coverage is complicated. We know making evacuation plans can be scary, and that it s easier to just hope nothing will happen, said Salvatore. We all hope nothing happens this hurricane season, but our experience and our forecasts tell us otherwise. Salvatore added that the key steps to insurance readiness can be summarized in one word: MUST. Make an inventory of your personal possessions and their value. Update your coverage to ensure you are protected against hurricane-related threats; to reflect improvements to your home s structure; and to cover your personal possessions. Update or add federal flood insurance, as well. Secure your home against storms by taking steps to prevent flood damage, protect your roof, and strengthen windows and doors. Take important documents, including a copy of your insurance policy, your inventory and insurance company contact information with you if you evacuate; send copies now to friends or family who live elsewhere. Carry important papers in zip-to-lock plastic bags. The full index and notes about the survey methodology appear below. More information can be found on For further information about the poll, contact Allison Dean Love of the South Carolina Insurance News Service, at or Jason Miner at (202) or (202) For overall industry questions, contact the III Press Offices in New York at (212) or media@iii.org, or in DC at (202) Representatives of the seven sponsoring companies can be reached at: Allstate: contact Michael Trevino at (847) The Hartford: contact Joseph Loparco at (860) Liberty Mutual: contact Glenn Greenberg at (617) Nationwide: contact Joe Case at (614) State Farm: contact Fraser Engerman at (309) Travelers: contact Jennifer Wislocki at (860) USAA: o Texas, Louisiana, Alabama, Maryland, Delaware, New Jersey, New York, Massachusetts, Rhode Island, Maine or Connecticut: contact David Snowden at (210) o Florida or Georgia: contact Lynne McChristian at (813) o The Carolinas: contact Karen King at (757)

4 Hurricane Readiness Index, ranked by homeowners score (scale of 0-100) Hurricane Readiness Index Scores (among people with homeowners insurance) Rank Region Score (scale of 0-100) 1 Louisiana 60 2* Coastal Mississippi / Alabama (tie) 58 2* Georgia (tie)/hilton Head-Beaufort SC Area 58 2* Southern Florida (tie) 58 5 Central Florida 57 6* Florida Gulf Coast (tie) 55 6* Florida Panhandle (tie) 55 8 South Carolina (not including Hilton-Beaufort) 53 9* North Carolina (tie) 52 9* Northern Florida (tie) Eastern Coastal Texas Southern Coastal Texas 49 Average Tidewater/Outer Banks Rhode Island South Jersey Delaware Maine Massachusetts 38 19* Maryland (tie) 37 19* New York Metro Area (tie) Connecticut 36 Questions in Index: 1. Review Policy: When was the last time you reviewed your homeowners insurance policy, either by yourself or with your insurance agent? 2. Update Policy: Have you updated your homeowners insurance policy in the past 5 years? 3. Flood: Do you have a separate flood insurance policy? 4. Right amount of coverage: In the event of a hurricane, do you think you have the right amount of insurance coverage, not enough insurance coverage, or aren t you sure? 5. Disaster plan: Develop a family disaster plan, including evacuation routes arrangements for any pets, and a disaster supply kit 6. Hurricane improvements: Make repairs or improvements to make your home more structurally sound, such as hurricane-resistant windows, hurricane shutters, or reinforced garage doors 7. Inventory: Create an inventory of the possessions in your home

5 8. Store Documents: Store important documents such as insurance policy information and a claims contact number in a safe place away from your home Methodology: The Glover Park Group designed this survey, which was administered online by Stratalys Research from June 12 26, A sample of 4,200 adults in coastal counties located in hurricane-prone states was surveyed. The sample was evenly divided among 21 regions (200 coastal residents per region). Certain questions were only asked of coastal residents with a homeowners insurance policy (n=2,775). The overall margin of error is +/- 1.5%; the margin of error for each region is +/-6.9%; the margin of error for residents with a homeowners insurance policy is +/- 1.9%. Respondents were drawn from web panels comprised of a combined 5.5 million individuals. A strict multi-step screening process was used to ensure that only qualified individuals participated in the survey. Regions were weighted slightly to match census data for gender, education, and age. For purposes of this survey, Coastal South Carolina includes the following counties: Colleton, Dorchester, Berkeley, Williamsburg, Georgetown, Charleston, Horry and Marion. Homeowners in Jasper and Beaufort Counties were part of the Coastal Georgia/Hilton Head-Beaufort Area.

6 SOUTH CAROLINA INSURANCE RISK FACT SHEET The last 25 years have seen a massive increase in population and development in coastal areas along the Eastern Seaboard and Gulf Coast. This increase in population and the ensuing boom in development and skyrocketing real estate values means that more people and more property are now at risk of hurricane damage than at any other time in our history. According to experts, we are also now entering a period of increased hurricane activity which means more and stronger hurricanes are predicted to reach the US coast. The collision of these trends highlights the risks insurers, homeowners and coastal communities face in the current and future hurricane seasons and the increased need for individuals to take the steps necessary to ensure their personal and financial security Hurricane Season Forecast: More, Stronger Storms. Experts predict nine Atlantic hurricanes this year with five of them being Category 3 or higher. There is an 82% chance of a major hurricane (CAT 3, 4 or 5) hitting the US this year. There is a 69% chance that a hurricane will hit the East Coast, and a 47% chance of another hurricane hitting the Gulf Coast. These odds are between 56% and 100% higher than the annual odds over the last century. [Klotzbach / Gray, CO State University, 5/31/06] $149 Billion in Insured Property At Risk on South Carolina s Coast. South Carolina has hundreds of billions of dollars in insured property in its coastal counties: South Carolina has $148.8 billion in insured coastal property. o $65.1 Billion in insured coastal residential property o $148.8 Billion in insured coastal commercial property [AIR, The Coastline At Risk, Estimated Insured Value of Coastal Properties, 9/21/05] Nationally, there is over $7.2 trillion in insured coastal property on the Eastern Seaboard and the Gulf Coast, accounting for nearly 40% of all insured property in coastal states. [AIR, 9/21/05] South Carolina s coastal insured property value has increased 377% since [AIR, 9/21/05; Insurance Research Council, 4/95] The Threat Has Grown with Major Increases in South Carolina s Coastal Population. According to a study by the National Oceanic and Atmospheric Administration, South Carolina s coastal counties have seen a population increase of 33% from with over 1.7 million people now living in the state s coastal counties. [NOAA, Population Trends Along the Coastal United States, 3/1/05] Many Homeowners Are Not Properly Insured. A number of recent, troubling studies conclude that Americans living in some of the areas most prone to hurricanes, flooding, and other natural disasters are not protecting themselves financially with adequate insurance coverage.

7 The RAND Corp. released a study showing that only about half of homeowners living in some of the most flood-prone areas of the U.S. buy federal flood insurance. That means millions of at-risk homeowners do not have any coverage for flood damage. [RAND Corp, 3/13/06] Chubb Insurance released a survey indicating that that widely publicized devastation caused by hurricane Katrina has not spurred a significant increase in flood insurance program enrollment, leading to a paltry 8% increase in flood insurance participation. [Chubb Release, 3/2/06] South Carolina Residents May Not Be Properly Insured, Especially Against Flood Damage. Since 1968, most homeowner insurers have not offered flood insurance. The primary source of flood insurance is the National Flood Insurance Program (NFIP) administered through FEMA. According to NFIP statistics, only 4 of South Carolina s coastal counties (Georgetown: 33%; Charleston: 39%; Berkely: 43%; Horry: 52%) have a flood insurance penetration rate above 8.5%. [Insurance Information Institute; Times Picayune, 3/19/06; statistics as of 12/31/05]

8 Consumer Education Resource The Hurricane Insurance Information Center (HIIC), sponsored by the Insurance Information Institute, provides users with a one-stop shop of information on how homeowners can better prepare for a hurricane. The site contains resources to help homeowners take the key steps they M.U.S.T. take to protect their financial security and physical property. Make an inventory of your personal possessions and their value. Users can click on free, downloadable, comprehensive home inventory software to create and update a room-by-room inventory of their home. This will help them know how much personal property coverage they need as well as help facilitate the settlement of insurance claims more rapidly. Update your home coverage to ensure you are protected against hurricanerelated threats, to reflect improvements to your home s structure, and to cover your personal possessions. Users get tips on purchasing the right amount and type of coverage for their home including an opportunity to link to the National Flood Insurance Program s website which will let them determine whether they live in a flood zone, learn the basics of flood insurance and get a rough estimate of their flood insurance premium. Secure your home against storms by taking steps to prevent flood damage, protect your roof and strengthen windows and doors. Users can learn cost-effective tips to make structural improvements that will help fortify their home against a hurricane and lower their insurance premiums. The site links to the Institute for Business and Home Safety (IBHS), which provides detailed information on securing homes and property by constructing a more structurally sound and protected home. Take a copy of your insurance policy and your provider s contact information with you and store your policy in a safe, flood-proof place. Users can employ a downloadable contacts page where they can fill in critical information to have in one place with their carrier, policy number, insurance agent contact information, etc. The site also contains contact information for a number of P/C carriers.