Weather and flood insurance are important components
It is often said that well-designed insurance programs provide clients with piece of mind. One big question is how to design a program for the kind of weather we are currently experiencing. We are providing three articles this month that discuss some excellent products to help your client be prepared.
Many people view weather insurance as event cancellation coverage and that is indeed one type of weather insurance. Weather cost containment insurance is available to pay when the costs to remove snow exceed estimated costs. Weather income stabilization insurance is available to protect a client's income when weather patterns disrupt a profitable season, such as when rainy weather keeps golfers away from the country club. Weather insurance is also available to protect a client that offers a promotional incentive plan based on the weather.
Rapid response is necessary when a tornado, hurricane, snow, flood, or other weather-related disaster strikes in order for your client to move from despair to hope. Pre-planning contracts with restoration contractors can get damage assessed quickly and restoration started more quickly. Proper advance preparation by you and your client can speed up restoring, repairing, or replacing damaged property.
Weather insurance and flood insurance are important components that help your clients protect their assets following unplanned weather events. Combining insurance with pre-planned restoration and remediation efforts will help your clients survive and thrive in difficult times.
Weather Insurance Offers Vast Opportunities for Agents, Brokers
You can't control the weather, but you can save your parade
By Dave Willis
Nobody likes it when someone rains on his parade. That's especially true if you're an enterprise-a municipality or business association, for instance-hosting an actual parade or similar event that has associated costs and revenue potential. Weather insurance can't prevent rain, but it can reduce or eliminate its financial impact.
The product is available in a number of forms. Event cancellation is one of the most common. But other forms also exist. "We have seen many creative uses and product expansion in weather insurance," explains Sean Curtin, senior vice president of contingency and commercial package for HCC Specialty. "One such use is to contain costs outside of the traditional event space."
Weather cost containment insurance most often applies to insureds looking to protect their businesses against excess cost for things like snow removal. "The typical buyers of this insurance are property managers, private schools and hospitals, condominium associations, retail operations and others responsible for removing snow from parking lots, streets and roofs," Curtin notes.
Another option is weather income stabilization insurance. "This product is used by businesses that rely on good or normal weather conditions necessary to maintain and/or grow their businesses," he explains. "Typical buyers of this insurance include restaurants, movie theaters, country clubs and golf courses, car washes and building contractors."
"The past two springs have been unusually wet and cold," notes Christine Ingraham, vice president of contingency underwriting at WKFC Underwriting Managers. "Golf course managers are used to certain months being rainy. So they may expect revenue to be down in, say, April across much of the Northeast and into the Midwest, but when May and June are too wet to play two years in a row, that presents a real challenge."
Another growth area is with weather promotional insurance. "While this is not new, as our economy continues to improve, more and more retail operations are using weather promotions to stimulate sales during key sales periods," Curtin remarks.
And it's not just auto dealers and jewelers doing this anymore, he adds. "We have written policies for furniture stores, home electronics businesses, pool installers, recreational vehicle and boat dealers, new home builders and many more." The product can be written for a single day or a season, with the occurrence of a specific weather condition driving customer refunds for purchases made during the period.
Ingraham sees interest in weather insurance expanding, driven in part by increased media attention and the perception of changing weather conditions. "Whether predictions call for increased extremes for snowfall or other precipitation or the latest National Weather Service Climate Prediction Center maps the next La Niña pattern, consumers appear to be bracing constantly for the next iteration," she says. "Consumers are looking more and more to the insurance industry for viable solutions."
Continuous broadcasting of storm events on The Weather Channel and other media, and the use of real-time radar and warning alert scrolls, contribute to the awareness. "You look on the TV and you see these large bands of color across the entire screen," she comments. "These are the types of things I try to avoid on the weekend when I'm trying to relax, but they're part of our reality; we and our clients can't avoid them."
She's seen keen attention to what she calls bottom-line income stabilization. "The hurt is real," she observes. "Almost every business segment has reported uninsured losses caused by weather events. We're hearing from clients and the press constantly. Concerns are growing equally for private businesses and public entities."
According to Ingraham, "Consumers are demanding from insurance professionals real-time solutions for their clients. And we're seeing more insightful plans internally, at the boardroom level, for preventing future losses, despite the fact that we simply cannot control the weather." Clients are calling for support through retail agents as well as wholesalers.
She points out that shareholders today are "spending hundreds of thousands of dollars modeling, predicting, and triangulating with expert consultation. They're deploying multiple expert resources to predict the next wave of climate change, in the hope they'll be ahead of it."
Traditional insurance products typically can't address the issue head-on. "Our primary goal in this arena has been to position specialized products capable of filling gaps not covered in the traditional sense, using a mono-line coverage approach instead," she adds.
Technology is playing an increasingly important role in weather insurance. Curtin's firm has developed an app for weather claim verification that makes the claim process completely straightforward and streamlined. "Real-time reporting direct to the smartphone device and automatic claim payment in seven business days change how verification and claims payment works," he explains. In this scenario, verification no longer relies on the closest weather station but on an overlaid 1km by 1km grid.
In-house underwriting experience also comes into play. "We combine our underwriting expertise, proprietary rate systems and long-term domestic and foreign carrier support to provide products that address emerging weather risks," Ingraham says. "We're finding consumers asserting a more active role in the solution. They're especially intuitive and show a real willingness to participate in the process."
Using the product
Weather insurance offers a range of solutions for businesses and other entities. "Applications for weather insurance products vary as much as the weather patterns themselves do," Ingraham says. "We're seeing the need for clients to protect revenue for short-term, seasonal and long-term business exposures."
"Weather insurance can be used in a variety of ways," explains Curtin, "from the traditional rain coverage to protect expected revenue for an outdoor event, such as a fair or festival, to the more uncommon cost containment insurance to protect a condo association against unexpected costs associated with snow removal during an abnormally snowy winter season."
He adds, "The weather seems to affect many types of businesses and individuals in a variety of ways. The most common type of weather insurance is event coverage to protect revenue and expenses against rain, snow, lightning, temperature or any other measurable weather peril for outdoor events, including fairs, festivals, concerts, sporting events, road races and more."
Other lesser known types of weather insurance include cost containment insurance, a seasonal policy that helps contain costs associated with adverse weather conditions. "The most common type of this policy is used for towns and municipalities, condo associations, private schools, private hospitals and other organizations, to protect their snow removal budget against an abnormally snowy winter," Curtin explains.
Ingraham is seeing seasonal exposures, such as haunted house attractions, concert venues and restaurants, where coverage periods extend throughout a calendar of events or certain dates over a full season. "They're buying contracts from 10 to 45 days for each short-term, single-day exposure within the calendar/season," she notes.
Others are considering long-term annual contracts. "Many snowplow and landscape contractors, for example, were very glad to have managed risk for excess or lack of snowfall over an entire season, in geographic regions ranging from the East Coast and Mid-Atlantic through the Midwest," she explains. Only certain risk classes, such as agriculture or ski mountains, are prohibited in domestic markets, she adds. "We see literally hundreds of risk classes on an annual basis."
Curtin says income stabilization insurance is being used to help businesses, such as restaurants, car washes or pay-for-play golf courses, protect against frequently occurring adverse weather conditions that interfere with their normal revenue flow.
Ingraham points out that many snowstorms and blizzards this past winter occurred on weekends, severely affecting retail business revenue. "As a result, we anticipate clients will elect to cover income exposed over weekends only," she notes.
Last, Curtin says, "There is prize weather insurance, which is a unique way for retail businesses to help boost their sales for a selected period of time based on a certain weather event occurring. It can be used for jewelers, electronics stores and furniture stores to promote a sales period and refund their customers' purchases if it snows or rains X inches on a given day."
Building a book
Curtin says retail agents and brokers can offer unique opportunities to their existing clients just by looking at their current customer database and thinking outside the box. "If they have retail clients, why not suggest a weather promotion to help boost sales?" he asks. "If they have private schools or hospital clients in a winter weather-exposed area, offer cost containment insurance to help them better budget for an abnormally snowy winter. If they have clients who are getting married, offer a rain insurance policy that can pay out big if it rains on their client's wedding day."
Ingraham concurs. "After a quick analysis of an existing book of business, it's easy to identify opportunities. We can meet with an agent or broker, learn what their core competencies and markets are, and show how and where to integrate weather insurance. For example, if an agent has a large book of restaurant business, we can help them dovetail the product to meet the needs of restaurateurs."
She points out that with traditional P&C coverages, if a weather disaster strikes, clients might find themselves underinsured. "That's because coverage for business income is subject only to what's offered within the standard property or businessowners policy form," she explains. "For example, waiting periods do not exist in the weather insurance arena."
Also, Ingraham notes, weather policies are designed to address the occurrence of a specifically named peril. "If the insured peril is triggered on the coverage date and verified by the claims verification source, the policy responds on an agreed value basis," she notes.
"Once a broker takes time to understand the unique application of the product, cross-selling to long-term property and casualty clients complements existing coverage," she says, noting that weather insurance does a good job of filling gaps in coverage for business income that simply cannot be addressed by traditional policies.
Weather insurance can be a value-added element when prospecting for new business. "To set themselves apart, producers can offer weather insurance along with a full package of protection," Curtin says. "For example, they could target personal lines for a client and then also cover special event liability and weather insurance for their wedding or any other big events."
If they target retailers and write traditional lines of commercial property and casualty, he adds, retail agents could focus on a niche such as jewelers and also offer a variety of different types of promotion insurance options including prize weather insurance.
"While weather insurance may once have been viewed as an insignificant component of risk analysis, or coverage geared only for one-day special events such as fairs and festivals, headlines today are telling us otherwise," Ingraham observes. "It's still a niche product, but weather insurance is probably one of the most underutilized coverages in the industry today."
She believes that staying ahead of clients by understanding the most viable solutions available will be critical to protecting any client's business. "Weather is a real threat, not only to profit but, for some businesses, to survival," Ingraham notes. "Hazardous weather outlooks are popping up every day. In many cases, we're facing never-before-seen frequency and severity. Our clients, large or small, need to understand the best industry solutions."
Curtin points out that weather insurance may have earned a reputation for being too expensive and too difficult to understand. "But with a little education, it can be a very profitable business for agents and brokers and affordable for their clients," he comments.
An obstacle to overcome is lack of awareness. "Agents and brokers tend to shy away from products they don't fully understand," he remarks. "The truth is, many of their clients have a weather exposure. If agents and brokers are willing to learn and make their clients aware of how it can be used, they can grow the market and boost their agency revenue."
DOING THE HEAVY LIFTING AND MORE: DISASTER CLEAN-UP AND CATASTROPHE REMEDIATION
Providing assistance after flood and fire
By Dave Willis
Seven of the ten most costly catastrophes in history were hurricanes, according to the Insurance Information Institute. The others: explosion and fire resulting from the 9/11 terrorist attacks in New York City and at The Pentagon; the massive Northridge, California earthquake in 1994; and flooding, hail and wind, including tornadoes that struck Tuscaloosa, Alabama, and other areas four years ago.
But the most common disasters-those affecting individuals and businesses day in and day out-aren't usually widespread events, but rather single-location incidents that generally involve fire and water damage.
"The things we're called in for most of the time are fire and flood," explains Abe Simon, president of Perfect Restoration and Cleaning in Suffern, New York. "Often, they're part of the same event. Flooding occurs because of the water used to put the fire out."
"Water damage emergencies are the most common types of call we get from customers," explains Malcolm Stone, director of marketing and communication for Paul Davis Restoration, a Jacksonville, Florida-based network of some 370 franchises across North America. "Most of these incidents result from accidents, appliance failures and leaks."
In the winter, frozen pipes and roof dams lead to flooding. "In those situations, we can be out for days at a time," Simon notes, "and the working conditions are, of course, not the best."
Often, clean up jobs can be complex, even when they might have seemed simple at the start. "You can't always come in and tell the customer up front exactly what the problem is and how you're going to fix it," Simon adds. "It's not uncommon to uncover issues as you go along."
Restoration firms are accustomed to responding quickly to emergency events. "Our standard response time is to call the customer back within minutes of the first notice of loss, and to be on-site for most service requests within an hour or two," Stone explains.
Gary (Gadi) Shaked, president and owner of TERS (Total Environmental Restoration Solutions), Inc., in Nanuet, New York, concurs. "We provide a plan of action and mobilization of environmental teams-generally within an hour, as well as filtration systems, environmental restoration equipment and air quality monitoring," he says.
Improved response time is actually a trend in the restoration and clean up industry. "With lessons learned from events like Hurricanes Katrina and Sandy, we're seeing speedier response and better coordination between restoration companies and insurance carriers," explains Stone.
He says national restoration contractors and insurers are working together to develop CAT response plans. "These plans include dedicated response crews, written work standards, CAT service level agreements, centralized dispatch and customer liaison, as well as other specialized processes and procedures that help ensure the highest level of customer service during difficult events," he adds.
"Greening" is another trend. "Ours is actually a 100% green company," Shaked notes. "We don't use any toxic or harmful chemicals." He says the company uses cutting-edge technology to monitor humidity, moisture, air flow, air particles, volatile organic compounds, mold bacteria and more.
While many jobs are smaller, firms often are tapped to handle big projects, too. "After Hurricane Irene, for instance, we were called in to work on a 100,000-square-foot nursing home that was flooded from the basement to the second floor," Simon notes. "It required specialized equipment and an awful lot of man hours."
He points out one special challenge in working on such a job: "It's like you're dealing with 200 home owners all at the same time," he says.
Shaked's company cites extensive work at the Manhattan Criminal Courthouse as an example of a notable project it handled. "In March of 2010, there was extensive fire damage in the courthouse in downtown Manhattan, which contaminated over a million square feet with smoke and soot," he recalls. "We were called in for first response measures and a decontamination plan of action. In less than 96 hours, we completed the environmental clean up, air, filtration and environmental restoration, and air quality monitoring."
Earlier this year, Stone's company participated in the "Siberian Express" CAT response in Massachusetts. "We cleaned up damage to residential properties caused by record snowfall and subsequent ice dams in the Boston area," he explains. "To support our local offices and better serve the customers in the area, we mobilized more than 80 crews to the area. As a result, we handled several thousand claims over a 12-week period."
Clean up and restoration firms also work on major, sometimes widespread, catastrophes. "Disaster debris clean up is primarily what we do," explains Brian Thomason, vice president of Bergeron Emergency Services, Inc., in Ft. Lauderdale, Florida. "When homes and home owners are affected by anything from a land-falling hurricane to a tornado to a technological disaster-really anything that can create debris fields-we respond."
The response is part of FEMA's Public Assistance Program. "Through the program, we're able to assist municipalities with uninsured portions of work that needs to take place after a disaster," he explains. "Municipalities actually have pre-positioned contracts in place with qualified contractors to facilitate immediate response to the community once a disaster strikes."
This is important, he says, because one of the most costly expenditures following a disaster, if not the costliest, is disaster debris management. "A disaster could generate three, four, sometimes five times the amount of debris a jurisdiction may deal with in a year's time," Thomason adds, "and this can have a real impact on home owners."
In communities where these contracts are in place, home owners can put eligible storm debris at the curbside and the city or county will pay to have it removed. "The contracts are with the local government entity, but FEMA will fund no less than 75% of the eligible disaster expenditures under the program to include debris removal," he explains.
Sometimes that will increase, based on the magnitude of the event. "States sometimes contribute, as well," he adds. "For example, Florida pays 12.5% of the eligible disaster expenditures. North Carolina picks up the tab for the entire 25% FEMA doesn't cover."
According to Thomason, the use of pre-positioned contracts is growing. "For communities in Florida, it's a no-brainer," he explains. "After Sandy, we've seen a tremendous increase in the use of them in the northeastern U.S., especially in coastal areas. If a community didn't have a contract in place and they got impacted, I can pretty much guarantee you they have one in place now."
Contracts also are prevalent throughout the Midwest because of tornadoes, and in areas where wildfire risks exist. "But we're seeing them in other areas, too," Thomason notes. "Take Minot, North Dakota, for example. They had severe flooding a few years back. There was no pre-positioned contract in place, but there is now."
He sees a side benefit to these contracts. "If a community has a program like this in place, home owners-and especially those who may not have been through a hurricane, for example, and they don't know how it all shakes out-can take comfort knowing a contract is in place," he explains. "In my opinion, it increases property value and draws people in, because they recognize that the community has its act together and is ready to serve citizens if, in fact, they are impacted."
Agent and broker role
Thomason encourages agents and brokers to become familiar with FEMA's Public Assistance Program. "If a pre-positioned contract is in place in your area, explain to clients how it works and how they could benefit," he suggests. "If one's not in place and it should be, help officials understand the value and encourage them to consider it."
He adds, "Nobody really thinks about disaster debris removal, or if they do, they think only about their own insurance and how that might respond. You see the pictures after a massive tornado hits; just the looks on the people's faces is reason enough to do something."
He recommends that agents and brokers become familiar with other disaster-response programs available through government agencies, as well. "There's a multitude of programs out there that complement what insurance does and can help customers get back on their feet more quickly," he notes.
Shaked stresses the importance of asking the right questions when dealing with restoration contractors. "Ask about experience and knowledge, about warranties, and about how the firm monitors the project," he says. "Determine whether the contractor uses any toxic materials, whether the firm is licensed and certified for mitigation and indoor environment jobs, and how the contractor estimates and bills for its work."
According to Stone, it's important for agents and brokers to become familiar with the restoration contractors in their area. "Find a strong local firm that can leverage the power of a national network to bring in the necessary resources, equipment and expertise to respond to and successfully manage the high volume of losses that are typical in the wake of CAT events," he advises.
He adds, "It's equally as important for carriers to share the number of insureds in an area affected by the CAT, so the restoration firms can best deploy resources, staff and equipment to respond to customers' needs."
Simon wants agents and brokers to know that clean up contractor responsibility often goes beyond the technical work they perform. "We're the company that comes in after disaster strikes, and that's a really important time in the life of an insurance agent's customer," he explains.
"I've been doing this since I was 16 years old," he adds. "I know that, whether it's 11 in the morning or 11 at night, we are there for the customers-the insurance agent's customers."
He concludes, "I have people tell me all the time that, in addition to the work we do restoring their property after a disaster, we also serve as psychologists of sorts-someone they can share their problems with, someone who is there, trying to calm them down during what clearly is a highly stressful situation."
CATASTROPHE RESPONSE: BEFORE AND AFTER A STORM
Carriers and trade groups help your agency prepare to respond to a disaster
By Dave Willis
It's been a decade since Hurricane Katrina hit the Gulf Coast and nearly three years since Sandy struck the northeast. However, the relatively low number of major named storms of late doesn't mean we've been disaster-free. In fact, the opposite is true.
"We may not have had as many large and very significant events, but there have been a lot of what we call small catastrophic events," explains Pat Gee, senior vice president, personal insurance claims at Travelers. "That reminds us that, in order to respond to catastrophes effectively, we need to plan for any combination of frequency and severity of events."
He says his firm is responding to events every day. "Even in times when there's less media coverage, we're deploying resources around the country, day in and day out," he adds.
Pat Borowski, senior vice president, industry affairs at the National Association of Professional Insurance Agents, points to flooding as an example of how broadly disasters reach. "I often say, 'Everybody is in a flood zone,'" she explains. "If you think back, since 2010, most of the flood damage that's occurred has been either in the interior of the U.S. and/or in coastal areas that hadn't been hit for 30 years. And the majority of these are located in non-high hazard zones."
Dan Muhlenkamp, a partner at Preferred Insurance Center in Coldwater, Ohio, knows this to be true. This spring, his 5,000-person town saw several inches of rain fall in a short period of time, leading to widespread flooding. "Customers were affected and our agency had flooding issues, too," he explains. "In fact, the largest claim for back-up of sewers and drains our agency has ever paid will be for our own building. We had three inches of water in our 6,000-square-foot basement for six hours."
The key to minimizing damage and speeding response is to be ready ahead of time. "We are seeing many more preparedness resources put out by local communities and the federal government," explains Madelyn Flannagan, vice president, agent development, education and research at the Independent Insurance Agents and Brokers of America. "There are a lot of social media outlets that have great information about how to prepare and what to do in case of a catastrophe or disaster."
She adds, "The Big 'I' has always urged members to work with their communities and individual insureds to be prepared, to have a plan of action, and to be ready to provide critical information to insureds in the event of a disaster."
Agents and brokers can provide information showing clients how to properly document and insure their property, how to keep documents safe, and how to create a plan with their family and/or employees. "It's important for agents to know and help customers understand what types of disasters could occur in their communities," Flannagan adds, "and where they can go for help."
Borowski encourages agents to get involved in community and other initiatives. "The Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) have done a really good job in improving the community rating system," she explains. "Agents and brokers can become familiar with these efforts and get involved in local initiatives to improve their community readiness and protection. They deal with these types of things in the regular insurance world every day, and they need to get involved."
Flannagan points to one resource agents can use to expand their own knowledge and then share with customers and prospects. "Every agent should be a part of the Ready.gov national campaign, to get their hands on all the information they might need to help their insureds and their communities," she explains. "It's an excellent place to get 'How To' guides on any type of disaster."
The National Association of Insurance Commissioners (NAIC) also offers tools. Its InsureU website, at InsureUOnline.org, has a section dedicated to disaster preparedness. The site offers a number of useful tips, as well as print and mobile versions of a handy home inventory form customers can use to document possessions.
"PIA and other associations have a host of resources, including expert panels of agents to connect with," Borowski notes. "We also have tool kits agencies can use to prepare their own operations." Local PIA affiliates also offer classes on preparedness and response.
She also encourages agents and brokers to tap social media. "Not too long ago, NFIP's FloodSmart program redesigned all of its resources," Borowski explains. "They have an entirely new agent area at FloodSmart.gov that offers content agencies can use on their own websites, in email campaigns and on social platforms."
Carriers offer agent resources, too. "We have what we believe is one of the best libraries of consumer-friendly digital resources-Travelers.com 'Prepare and Prevent'-that agents can use to learn and share with customers," Gee explains.
"We work with our agents to understand how they'd like to communicate with their customers," he adds. "We also provide comprehensive digital tool kits, so agents who are following us on Twitter and Facebook can merge content into their local streams."
The company also offers weather alerts. "People can sign up and get notifications, based on their physical location, of weather or other incidents they should be ready for," Gee notes.
Borowski reminds agents not to forget about selling flood coverage as part of their preparedness work. "Talk to customers and write flood business before somebody else does," she says, "because when they do, they'll probably write the rest of the account, too."
Over the past several years, disaster response has changed. Social platforms and media outlets have brought up-to-the-minute attention to catastrophes. "Corporate America has really seemed to step up and provide a great deal of support and response to communities when a disaster hits," Flannagan notes. Charities and citizens are quick to lend a hand, as well.
There's been a dramatic shift in industry response, too. "Technology and advanced analytics are providing us opportunities we might not have had in the past," Gee explains. "For example, we now use sophisticated geospatial tools to effectively monitor activity. We can know, virtually in real time, where hail is falling around the country, how large it is and exactly what footprint it's falling in. That lets us position ourselves to respond."
The tools integrate with the carrier's customer database and workforce planning and logistics modeling. "As a result, we can almost immediately determine what our initial response needs to be, before we get actual information and physical evidence from the ground," he notes.
Smartphones and apps have brought other changes. "We can assess the footprint of a roof using satellite technology, as well as the inner dimensions of a building," Gee notes. "We may even be able to use infrared equipment to determine whether there's water running behind a wall. It's really transforming how we inspect properties and respond to catastrophic events."
Among the newer tools are unmanned aerial vehicles (UAVs), more commonly known as drones. "The FAA has released 'small UAV' guidelines," he explains. "Many companies, including ours, have exemptions that let us start pursuing the use of UAVs in the commercial space. We'd like to be in a position, over the next couple of years, to deploy that equipment very broadly throughout our whole organization. This will let us expand our ability to respond to regular claims, as well as catastrophes."
Technology is just part of the story. "To be ready for very, very large events, we've trained a broad part of our company to assist," Gee explains. "We do that so we can have our own employees helping our customers. That's something we've heard from clients-they prefer, where possible, to work with our employees when dealing with their claims."
The company maintains five mobile claim offices that can be deployed when and where needed. "They can travel anywhere around the country in a very short amount of time," he says. "This lets us get set up quickly to help our agents and our mutual customers." The firm also has arrangements with outside contractors to speed hotel room procurement for our deployed staff, tree removal, roof damage mitigation, fuel and more.
An important part of disaster response is helping agents. "We offer everything from temporary space and backup copies of files to our communication services and other employer resources, as well as supplies they might need to operate," Gee notes. "We maintain very close contact with our agencies before, during and after an event-not just with preparation information, but also claim status and coverage information."
Borowski stresses the importance of getting agents operational. "The agents are living in the same communities where the disaster hit," she explains. "Their businesses, as well as their staff, are likely affected. We have a whole focus around helping these agencies get back on their feet."
Flannagan adds, "We have the Trusted Choice Disaster Relief Fund to help our members and their employees if they experience a loss that isn't covered by insurance or if there's some other circumstance that requires them to seek help after a disaster."
Muhlenkamp's agency saw about fifty claims-including his own-following his community's flooding. Most weren't too severe.
One of the first things he did was create an informational email blast. "I sent it out to everybody I had an email address for-whether or not they were my clients," he explains. "I listed contractors that do water restoration work, along with their phone numbers. I knew most of them were already swamped, because I had been calling them through the night, either for client or myself. But I also knew people needed to call in and get their names on the list."
After sending the emails, the agency got a lot of replies. "Several hundred, in fact," Muhlenkamp notes. "People had additional questions. We tried to have responses organized and be as helpful as we could be. We ended up having conversations that wouldn't otherwise have occurred. We had discussions with people who weren't even our clients, because they found it easier to respond to our email than try to get through to their agents, who were busy doing their best to help other customers."
He also posted on Facebook. "I put a few posts up and responded to a few people," he explains. "I actually posted a picture of myself pumping water out of our basement. Apparently my face looked a little stressed, because people commented on that. They actually talked to me in person about it and mentioned that they could tell from the picture that I could relate to how they were feeling."
He realized very quickly that his agency's ability to handle normal claims volume was not a reflection of its ability to handle a lot of claims while operating in crisis mode. "One thing we did was, we took our sales staff-people who normally aren't involved with claims-and had them answering phones," Muhlenkamp explains.
"To prepare them," he adds, "we sat down with our service team and wrote out scripts, if you will, answers to common questions that the sales folks could use. We also prepared email templates with information customers could use that the salespeople could send out. It worked well; they did a really great job helping with claims calls."
Despite the frustration of having damage to the agency building, he sees a benefit. "It was good to see first-hand how dealing with building damage works and to experience everything that comes with it," he explains. "It helps me to relate to my clients better." And that-relating to clients-may be more important than any other element of an effective agency disaster response program.
Dave Willis is a New Hampshire-based freelance insurance writer and regular Rough Notes magazine contributor.