CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its newest analysis, the 2019 Insurance Coverage Adequacy Report, which shows increases in reconstruction costs in certain disaster-prone areas range from 5.6 percent to 7.6 percent from 2016 to 2018. In this report, CoreLogic examines potential underinsurance issues in four regional scenarios of the U.S. with exposure to natural hazards: The Northeast Atlantic and Gulf Coast regions with hurricane-related storm surge risk; California with wildfire risk; and Oklahoma with tornado risk.
Data from the 2019 Insurance Coverage Adequacy Report underscores the need for insurers to ensure homeowners carry the proper amount and type of coverage that is based on updated reconstruction cost values which also includes the variation of labor by market. The report also analyzes the impact of underinsurance on the lending industry through an increase in loan delinquencies following natural hazards.
“Underinsurance issues can cause financial devastation for property owners, artificially low coverage limits for insurance carriers, and increased loan delinquencies,” said Amy Gromowski, senior leader analytics at CoreLogic. “Homeowners who experience natural hazard events, such as the California wildfires, are often struck by personal and financial devastation and many aren’t able to rebuild their homes, which prolongs the region’s recovery and often causes homeowners to default on their mortgages.”
Underinsurance figures are based on an analysis of increased reconstruction costs over just a two-year period for homes that are at very high-to-extreme risk of being destroyed or even partially destroyed in the event of a natural disaster. Highlights include:
Delinquency rates spike following natural hazard events. Following 2017’s hurricanes Harvey, Irma and Maria, delinquency rates on home mortgages tripled in the Houston, Texas and Cape Coral, Florida metro areas and quadrupled in San Juan, Puerto Rico.
For more information, read the full 2019 Insurance Coverage Adequacy Report, which includes charts and figures.
CoreLogic (NYSE: CLGX) is a leading global property information, analytics and data-enabled solutions provider. The company's combined data from public, contributory and proprietary sources includes over 4.5 billion records spanning more than 50 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, and the public sector. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in North America, Western Europe and Asia Pacific. For more information, please visit corelogic.com.
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