Monster Storms Threatening Our Businesses
Thursday, October 12, 2017
by: Jeff Taxier, American Technologies, Inc.

Section: Trends and Tips

As I write this, it is just a few days after Hurricane Maria has pummeled Puerto Rico and as it continues its course across the Atlantic Ocean is threatening parts other states (particularly North Carolina). Following closely on Hurricanes Harvey, and Irma, 2017 marks the first time in recorded history that three Category 4 or stronger hurricanes have made landfall on United States territory in the same year.
For insurance companies and restoration companies, these monster storms represent either the best – or the worst – of what we can offer our customers. I can say with some certainty that much has changed and improved over the years as we all learn various lessons from responding to earlier events. Another improvement has been the tremendous changes in technology, leading to better forecasting, quicker loss reporting, and easier communication tools with the public who needs us.
Of course, all that goes out the window if – like in Puerto Rico – the storm has knocked out power to virtually everyone and virtually all the cellular technology.  But certainly in Texas and in Florida – with much better infrastructure – technology has enhanced the response and repair process.
The ability to be back in business at the earliest opportunity is always paramount after a disaster. Studies following Hurricane Sandy suggest that there is a 70% chance or greater of a business not reopening at all if it is not back and running in some manner within 30 days, and a 90% chance of the business not reopening if it is not up and running within 90 days. For some of the hotels and hospitality businesses (most heavily impacted on Florida’s West Coast and in the Caribbean) the lessons learned from a Category 3 storm that hit Cabo San Lucas three years ago is very telling. Tourists will come back! The attractions of the areas don’t change as a result of the storm. But they won’t return if the attraction/resort/hotel is not rebuilt to even better standards than before. The Hilton Resort in Cabo was closed for 14 months, but when it reopened they had made the investment in totally revamping the award-winning property, and it is now booked at 75% or greater capacity. Other resorts have had to shut their doors due to poor business.  So it is very important for the property owners to make the financial commitment – and work with quality contractors – to do the repairs better than right.
The insurance claims being reported are astronomical.  As of September 27, the Florida Department of Insurance is reporting 600,000 reported claims, and the Texas Department of Insurance is reporting 450,000 reported claims. In Texas the number of damaged properties is certainly in excess of the reported claims but due to the fact that the primary cause of loss in the Houston area is Flood, and only 18% of the property owners carried any flood insurance (typically only offered by the Federal Government for residential customers with some commercial carriers offering this coverage for a very high premium), there are many property owners and businesses who are going to have to self-finance the repairs (or hope that the Federal Government will offer some bail-out). 
For the West Coast, for whom hurricanes are not an issue – now may be the time to take a good look at your earthquake coverage. Don’t stick your head in the sand and be caught without coverage when the next shaker comes – because you know it will.
For companies like ATI and other companies alike, our primary responsibility early on is assessment and then mitigation so that business customers can at least operate some of their business as quickly as possible. The approval process for final repairs will, of necessity, take some time.
Catastrophes don’t have to be disasters. Make sure your business has an adequate Emergency Response Plan and practice it.  Ensure that you will receive first attention service by entering into Emergency Response Agreements with qualified vendors. And have a team ready to respond – to include your Risk Manager, broker or agent and emergency vendor. 

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