In the wake of a catastrophe, it's far too late for policyholders to find out the home they lost was underinsured. Unfortunately, this tragic outcome has played out thousands of times following catastrophes in recent years.
Events such as the 2003 Southern California wildfires, the 2003 Midwest severe thunderstorm outbreak, and the 2004 and 2005 hurricane seasons brought the issue of underinsurance to the forefront of the insurance industry.
Further exacerbating the impact of catastrophes is the dramatic increase in the total insured value of properties in high-risk areas. AIR Worldwide estimates the insured value of properties in coastal areas of hurricane states has roughly doubled over the last decade, with more than $3 trillion of insured residential property value in East and Gulf Coast counties alone.
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