U.S. homeowners have experienced often-devastating effects of extreme weather in recent years for which climate change is a contributing factor. Climate change is one of several factors that have increased wildfire severity. Warmer temperatures and prolonged droughts result in drier forests that allow for more extreme wildfires that are not easily contained. Add to this that more and more homes are being built in areas prone to wildfires.
Extreme winter weather has also beset a wide swath of the country in recent years, resulting in millions of dollars in claims, often from from ice dams and frozen pipes.
How do insurers for wealthy clients address the effects of climate change?
At PURE, a member-owned insurer, “our goal is to help members be safer, smarter and more resilient,” Martin Hartley, the firm’s chief operating officer, said in a recent interview.
Other high-end insurers either declined to be interviewed or did not respond to a request for an interview.
PURE has 60,000 high-net-worth members across the United States, according to Hartley. PURE’s homeowner’s policy covers a wide range of potential problems, including fire, theft, wind damage and water damage from burst pipes.
It also writes policies for its clients on behalf of the federal government’s National Flood Insurance Program, as do other private insurers. In the case of flooding, like that following this summer’s Hurricane Matthew, PURE will send out a single claim adjustor, who will assess damage that will be covered by the homeowner’s policy and flood damage by the NFIP insurance, according to Harley.
PURE helps its high-net-worth clients by tapping its long experience and data from other policies to offer them advice on securing their properties in the face of extreme weather. It has also invested in more risk managers to gain insights to the potential effects of climate change on property from fire, water and wind damage. These insights, Hartley said, help the firm hone its advice to clients.
A member advocate will conduct risk management appraisals and inspections, and give advice on disaster and emergency preparation. For example, the advocate will examine attic pipes and make recommendations about how to prevent leaks, and help implement these recommendations by contacting vendors and seeing that the job is completed.
Hartley said the firm does not require its wealthy clients to follow its advice, but notes that they are generally very highly motivated to do so in order to ensure the safety of their property.
In the event of a loss, the member advocate will work with the client and the assigned claims adjuster to obtain estimates and schedule contractors, buy a new vehicle in the case of a total loss, arrange temporary living accommodations if the home is inaccessible and manage other administrative matters associated with the claim.
Mitigating Winter’s Effects
As winter approaches, along with the potential for severe storms, PURE addresses several factors that increase the likelihood of loss.
Homes unoccupied for long periods of time can sustain four times more damage from burst pipes. PURE recommends installation of leak detection and emergency water shutoff systems, and smart thermostats to manage the home remotely and give alerts of drastic temperature change.
In addition, PURE recommends that pipes in attics and other unheated areas be properly insulated to prevent freezing.
PURE’s research shows that roof age is highly correlated to ice dam occurrence, and the type of roof can also affect ice dam formation. Constant fluctuation between freezing and warming temperatures, along with the accumulation of snow on roofs, greatly facilitates development of an ice dam.
Depending on the type of roof, the best defense is an uncompromised water membrane, which is located between the shingles and sheathing to prevent water from leaking through the roof, PURE says. In addition, a slate roof should be serviced at least once a year to replace cracked or flaking tiles that would allow for leaking.
As well, after a big snowfall, homeowners should hire a professional to rake excess snow off the roof and remove ice dams, and consider installing heated cables to gutters and downspouts to prevent ice dams from forming and have a contractor inspect the insulation in the attic to avoid heat loss.
