NEW YORK (CNN/Money) - It should be no surprise that big storms, including hurricanes and tropical storms, can cause big damage. In 1992, Hurricane Andrew caused $16 billion in insured losses.

But as Isabel, a category 2 hurricane, bears down on the Eastern seaboard, homeowners in the storm's path should brace themselves for an even bigger financial hit than they might have expected in prior years from a similar storm.

The Federal Emergency Management Agency (FEMA) advises homeowners to plan ahead. In addition to figuring an evacuation route, and stockpiling food, water, flashlights, batteries and the like, FEMA recommends protecting windows with storm shutters or plywood panels.

But if you waited until this week to storm-proof your house you may have to pay more for that plywood. Wholesale prices have tripled since April.

It has nothing to do with Isabel. It's mostly the strong homebuilding market. Government stats report housing starts are up about five percent in the year's first seven months, pushing lumber prices through the roof, according to Jon Anderson, publisher of industry tracker Random Lengths.

If you sustain damage, Allstate's Bill Mellander has this advice: • Make a record of all damage. Try to list all losses and be ready to point out storm-caused problems. • Take pictures. You should already have photos of your undamaged home. This will give you a visual record of damage. • File a claim quickly. Claims adjusters can get overwhelmed. • Make temporary repairs. This may limit later damage. Keep all receipts.

"Homebuilding reached levels that the industry did not expect," Anderson says.

As inventories declined and shortages boosted prices, the federal government sprung into action, ordering 20 million square feet of plywood to build barracks, guard posts, and other projects in Iraq. This comparatively small amount -- the industry produces 300 million square feet per month -- strained a market already out of balance.

Shortages ensued and wholesale plywood prices leapt from $259 per thousand square feet in April to $535 on September 12. A four-by-eight sheet of half-inch panel that retailed for $12 in April may go for $16 or more today. If you waited until the last minute, prepare to pay an extra $100 or more to cover the 25 windows in your home. Call it a procrastination penalty.

Higher lumber prices could also kick in during a repair and rebuilding period. Lumber accounts for about 10 percent of construction costs. With framing lumber prices also up nearly 40 percent, rebuilding costs could rise five percent or more, an extra $10,000 on a $200,000 house if you had to completely rebuild.

The second financial hit may come from insurers. Anyone who hasn't upgraded homeowners coverage may find that, should the house be totally destroyed, many policies don't pay all the costs of replacement. (Complete destruction of one's home is unlikely from a category two storm like Isabel, although considerable damage could occur.)

Some companies, including Chubb and Fireman's Fund, still offer guaranteed-replacement policies in which they'll pay for full restoration to original condition. Other insurers, however, will pay only a certain maximum percentage above the insured value. State Farm and Allstate, for instance, will pay up to 120 percent.

If the face value of your five-year-old policy is, say, $200,000 (what your home was worth at the time), your insurer will pay about $240,000 to replace it.

But building costs have increased even without factoring in the inevitable hikes in contractor's costs and materials prices that follow any widespread disaster. It could take $60,000 or more out of pocket -- that's beyond what the insurance would pay -- to get back the home you had.

Even if damage is only partial, homeowners could experience an insurance shortfall on payments for wind damage. In some risky areas State Farm, Allstate, and other companies have hurricane damage deductibles of one or two percent -- even five percent -- of the insured value of a home. Two percent of $200,000 comes to a whopping $4,000 taken right off the top of your payment for wind damage.

Bill Mellander, spokesman for Allstate, says that many of the homes it insures carry this kind of deductible. "They exist to ensure the affordability of homeowners insurance," he said.

Jim Taylor, spokesman for the National Association of Independent Insurers, said, "Most people have enough coverage to rebuild to original condition." But, he continue, homeowners will feel the pinch of increased premiums, as companies scramble to offset their losses.

Before Hurricane Andrew, premiums in Florida were low. The market was very competitive and insurers used homeowner's coverage as a loss leader to increase sales of auto insurance and other policies.

"After Andrew, insurers realized the premiums they were charging weren't enough," said Taylor. Rates more than doubled in the next 10 years, according to the Florida Department of Insurance.

As it is, home insurance premiums have risen faster than inflation, partly because of industry payouts from storms, the Sept. 11 terrorist attacks, and other disasters. The Consumer Federation of America reports that rates increased by 13 percent in 2002, and 7 percent in 2001.