This September will mark two years since Hurricane Ian hammered the southwest coast of Florida. The storm took out large amounts of infrastructure, destroyed electrical systems, and caused many private insurers to pull out of the market. The total cost of Hurricane Ian's destruction is estimated at $118.5 billion, according to the National Oceanic and Atmospheric Administration (NOAA).

The fallout from Ian persists today, as many insurance claims resulting from the storm are still open. Unlike previous storms, such as Irma and Charlie, which were mainly wind events, Ian not only brought wind but significant flooding. Carriers continue to assess wind claims and flood claims, bringing in engineers to delineate flood damage, which is typically anything below the flood line visible on walls, versus wind damage, which is typically anything above the flood line.

The anticipated risk of damaging hurricanes like Ian is elevated this year. An “extremely active" 2024 Atlantic hurricane season is predicted by weather forecasters at Colorado State University (CSU), forecasting 23 named storms, 11 of which will be hurricanes and five will be Category 3 or higher. NOAA's hurricane forecast calls for 17-25 named storms, 8-13 hurricanes, and 4-7 major hurricanes. NOAA also indicates an 85% chance of 2024 being an above-normal season. 

As we approach the second anniversary of Ian, here are four tips agents should be providing multifamily property owners to prepare for and mitigate the risks posed by the storm season ahead:

1) Make the property more hurricane resilient. Advise clients to make properties more hurricane resilient by conducting an interior and exterior assessment to ensure everything is ready to take on the punishing conditions posed by storms. Taking the time to do this and make adjustments will improve the property's ability to withstand hurricane impacts, preventing larger issues and significantly reducing the risk of damage.

Some of the proactive measures property owners and managers can take include:

• Removing dead trees and pruning tree branches.
• Removing loose items and debris from around the property.
• Installing storm shutters or accordion shutters.
• Repairing or replacing windows, latches and door hinges that are weak or damaged.
• Cleaning gutters and storm drains.

2) Have a restoration game plan. Agents should encourage clients to proactively develop a property repair game plan for restoration long before a storm hits. In the aftermath of a hurricane, contractors will be in high demand and possibly unavailable for a considerable time after the event.

Associated Builders and Contractors (ABC) Florida Gulf Coast President Steve Cona estimated that Florida faced a shortage of 50,000 construction workers before Hurricane Ian struck and that an additional 30,000 workers were needed to handle rebuilding after the storm, according to Bisnow.

Today, the construction industry continues to face a labor shortage, needing to attract more than half a million new workers in 2024 to balance supply and demand, according to estimates from the ABC.

To avoid the worry and stress of trying to find available contractors, it is important for property owners to pre-negotiate contracts with cleanup, repair and construction providers while maintaining ongoing agreements with these providers for repairs and supplies. As part of this process, property owners should meet virtually or face-to-face with service providers to discuss potential needs and review costs and necessary deposits.

Having a restoration game plan in place will help expedite repairs and cleanup to more quickly secure properties, mitigate losses and get things back to normal.

3) Maintain an emergency fund for repairs. Agents also should advise clients to maintain an emergency expense fund or business line of credit to cover necessary repairs and remediation. Clients should understand that when a hurricane hits, it can take months for insurance claims to be settled and funds to be dispersed.

In Florida, for example, after an insurer receives notice of an initial, reopened or supplemental property insurance claim from a policyholder, the insurer has 60 days to pay or deny the claim or a portion of the claim, according to Chapter 627 of the 2023 Florida Statues. 

Clients also might need to cover the cost of an engineering report, which details what needs to be done to bring the building back up to code. Complying with recommendations contained in this report can be a lengthy and costly process.

4) Review insurance coverage. Agents should encourage multifamily property owners to review their insurance coverage and discuss potential gaps at least once a year. Meeting with clients to review valuations and policy limits, deductibles, exclusions and limitations can help determine if the policy is aligned with the current cost to repair property damage from a hurricane.

This is especially important because of escalating construction materials and labor costs. Construction costs in the U.S. are expected to increase 3%-6% in 2024, according to a report by Currie & Brown.

The number and cost of natural catastrophes are increasing in the U.S. “The U.S. has been impacted by landfalling Category 4 or 5 hurricanes in five of the last seven years," including Hurricanes Harvey, Ian, Ida, Irma, Laura, Maria, and Michael, according to NOAA. From 1980 to 2023, these and other storms have caused the most damage at $1,379.3 billion and, at an average of $22.2 billion each, have the highest per-event cost.

With hurricane season underway, now is the time for agents to work with community owners in hurricane-prone areas to assess their exposures and provide recommendations to mitigate risks, reduce losses and accelerate recovery.

Ali Pool is a vice president with Insurance Office of America. Pool has over 20 years of experience as a commercial insurance broker helping clients overcome catastrophic natural disasters in the ever-changing world of insurance.