ACE USA White Paper Explores Cost to Consumers When Extreme Weather Hits Home.

PHILADELPHIA -- ACE USA, the U.S.-based retail operating division of the ACE Group of Companies, reports that the increase in extreme weather events has long-term financial implications for consumers and their communities. As reported in its white paper titled "Extreme Weather: Events, Trends & Consumer Impact," Hurricane Katrina broke all records, with estimated total property losses of $135 billion while other weather events caused damage and losses impacting millions of consumers. Los Angeles experienced severe rainfall in 2005, triggering flash floods and landslides that killed 10 people, damaged and destroyed homes, and accounted for $300 million in property damage. With persistent drought affecting wide areas of the Southwest and Southern Plains, wildfires burned 8.53 million acres in 2005, breaking the record set in 2000. That year, the devastating Cerro Grande Fire in Los Alamos, N.M., resulted in insured losses of $140 million.

According to Kimberle Kennedy, Vice President, ACE Accident & Health, author of the white paper, homeowners, even those living in high-risk areas, seldom expect to be driven from their homes by natural disasters like tornadoes, wildfires, or hurricanes. Adding to their vulnerability, some homeowners assume that their basic homeowners insurance policy will provide them with adequate financial protection if their homes are damaged or destroyed. As unexpected expenses are incurred, homeowners must still meet their mortgage obligations, even if their homes have been severely damaged or completely destroyed.

According to weather experts, it's likely that extreme weather events will continue to escalate in number and severity. With the 2006 hurricane season upon us, tropical storm experts predict 17 named storms, and nine hurricanes, and scientists predict that the Atlantic Basin, where hurricanes form, is likely to remain very active for at least the next decade.

After enduring a record-setting 1,819 twisters in 2004, "Tornado Alley," the most tornado prone region of the U.S., experienced "only" 975 tornadoes in 2005, a welcome, if short-lived respite. Already this year, in March, the first month of tornado season, 226 twisters touched down, the greatest number reported for that month in more than 50 years.

The white paper examines consumer issues associated with extreme weather events, including supplementary insurance products designed to protect the financial health of homeowners faced with the daunting task of recovering from hurricanes, floods, fires or any other disaster that renders the home uninhabitable. According to Kennedy, homeowners can avoid financial disaster by purchasing affordable "mortgage disaster protection" insurance, designed to:

--Cover monthly mortgage payments, including taxes, insurance and other escrow items (when the home is deemed temporarily uninhabitable)

--Reimburse the homeowner's deductible for losses covered under the mortgage disaster protection insurance policy

--Provide a monthly emergency cash benefit

--Cover the remaining mortgage balance (when the home is deemed permanently uninhabitable)

"Recovering from a hurricane or any other disaster can be emotionally devastating and extremely costly. Many homeowners may not have the financial resources needed to fully recover. Coping with additional expenses such as building contractor advance payment, lost wages and replacement of necessary personal and household items, while continuing to make monthly mortgage payments can be extremely difficult for some homeowners," Ms. Kennedy added. "To protect their personal financial strength in the event the worse happens, consumers are wise to complete a regular review of their insurance needs, existing policies and coverage, as well as supplemental products available in the market. ACE Disaster Mortgage Protection(sm) is one of those supplemental products that can make a difference."

ACE Accident & Health is committed to delivering a diverse portfolio of innovative insurance products--from traditional employer accident programs to supplemental plans designed to serve the needs of its clients and their members.

For more information about ACE Accident & Health's products and services, visit www.aceaccidentandhealth.com and www.dmp-ace.com.

ACE USA is the U.S.-based retail operating division of the ACE Group of Companies, headed by ACE Limited (NYSE:ACE), and is rated A+ (Superior) by A.M. Best Company and A+ (Strong) by Standard & Poor's. ACE USA, through its underwriting companies, provides insurance products and services throughout the U.S. Additional information on ACE USA and its products and services can be found at www.ace-ina.com. The ACE Group of Companies provides insurance and reinsurance for a diverse group of clients around the world.