In the wake of the disaster that Hurricane Harvey left behind, experts estimate up to $23 billion dollars in damage occurred in just two southeast Texas counties.
That number reflects market value, rather than total storm damage, and it doesn’t include the storm’s total reach. Experts are still calculating the total cost of damage across the rest of Texas and Louisiana.
It’ll take many business owners – especially those of small businesses – years to rebuild, if they do at all. Over 40% of small businesses don’t reopen after a disaster because they simply don’t have the resources.
Here are some serious issues to consider before the next hurricane hits:
Develop a business continuity plan.
Get the right types of insurance – and review coverage periodically.
Many businesses in the storm’s path did not have flood insurance, which means there may be few options for filing flood-related claims. Business owners should look to the federal government’s National Flood Insurance Program, which can issue policies that cover businesses in the event of a flood.
Consider the emotional toll on employees.
Your business was hit by a hurricane; that means your employees’ homes were likely affected, too. Hurricane Harvey displaced an estimated one million people. While getting your business back up and running is a priority for you, consider the impact of the storm on your colleagues. Following a natural disaster, it’s important to keep the lines of communication open and be flexible with employees as they deal with damage to their homes. Put policies in place before a storm hits that outline how you’ll handle working after the storm. Your employees may need to work flexible hours while they care for kids who aren’t able to go to school or elderly relatives who typically live on their own or at a nursing home or assisted living facility.
Organize and protect your records.
In the days leading up to a forecasted hurricane or other severe weather, you’ll likely want to spend it preparing for physical damage, preparing to evacuate and making sure that your family and your employees’ families are safe. You don’t want to spend it scrambling to organize your policy files. While most of the information you need is on the web, make sure you can easily access it from your phone. You might also want to print out backup copies of policies and carry them with you so you can reach out to insurers after the event.
Put your smartphone to use.
When it’s time to assess the damage and begin rebuilding, put your smartphone to use. Take pictures and video to capture the damage to your business. As an added measure, take pictures of paper receipts during your rebuilding efforts as a backup. It’s an easy way to help you document your expenses that can contribute to your deductible.
These recent powerful storms are a reminder to prepare ahead of time for these types of natural disasters – even if you don’t think it can happen to you.
Louisiana homeowners’ insurers are largely expected to escape a significant loss burden from the deluge that has flooded large areas of the state in recent weeks, according to underwriting sources. Flood cover is typically not included in homeowners’ policies, with owners of properties in high-risk areas instead left to buy protection from the National Flood Insurance Program (NFIP), or standalone private products where available.
But according to modeling firm AIR Worldwide, the vast area affected by the floods meant that the modeled probability of the event corresponded to a 1,000-year return period, with an estimated 60,000 homes damaged across 20 state parishes.
While up to 75 percent of properties are considered a total loss in one of the worst-hit areas of Livingston, the number of coverable claims received by carriers across the state remains relatively small. The extent of flooding outside of Louisiana’s high-risk zones means that many of the properties affected will not have bought cover.
“The penetration of flood insurance in some of those areas is very low, so you will have a lot of retained losses, certainly on the homeowners’ side,” said an underwriting executive.
With residential flood cover usually onlyavailable through the NFIP, the Federal Emergency Management Agency (FEMA) has estimated that 42 percent of homes in Louisiana’s high-risk flood zones have cover in place for the peril.
In low and moderate-risk zones, however, that drops to just 12.5 percent. Across the Baton Rouge area, no more than 15 percent of homes have flood insurance, while Lafayette, also hard-hit, has a take-up rate of 14 percent.
According to Enda McDonnell, co-CEO of Louisiana carrier Access Home Insurance, the flooding will predominantly be an expense event for his company. That is because many affected homeowners will lodge uncovered claims with insurers that will need to be assessed first in order to get the letter of denial they need to then apply for federal aid from FEMA.
Another senior executive at a Louisiana homeowners’ carrier told The Insurance Insider that his company has been able to determine coverage for only around 10 percent of the claims calls it has fielded. With no flood cover included, payouts instead will be for damage from falling trees or minimal wind damage to properties that has led to water losses.
“But of the other 90 percent, very few will have had flood coverage [from other sources] so they’re just going to be uncovered losses,” he continued.
The executive added that owners of properties outside of the flood plain would not have been recommended to buy flood cover by their insurance agents, even at a minimal cost.
One area of exposure for insurers might be where they have significant portfolios of mobile home business on their books.
A number of mobile home carriers in the state allow flood to be endorsed to their property policies. Indeed, Louisiana carrier, Maison listed parent 1347 Property Insurance Holdings said that it expected to incur losses from claims related to damage from the storms that caused the flooding. It explained that the event had impacted its manufactured and mobile home policies, with some wind damage claims also expected on its homeowners’ book. The company said that losses were not expected to exceed its $5M cat reinsurance attachment point, but that it may have recoveries under its per-risk program.
By David Bull, Insurance Insider, August 30, 2016.
There are serval items which are often overlooked when preparing for storm season. In addition to developing a plan of action and photographing your home and valuables, consider taking the following measures:
1. Prescription medications (2-4 week supply).
2. Non-prescription drugs (aspirin or non-aspirin pain reliever).
3. Extra pair of prescription glasses or contacts.
4. Mosquito repellent / sunscreen.
5. Pet medications (2-4 week supply).
6. Pet cage (if traveling with pet).
7. Emergency phone numbers.
8. Important documents (insurance/passports/Soc. Security card, medical records)
9. Home PC backup disks/drive
10. Antibacterial wipes/wet wipes.
11. $100-$300 in extra cash (small bills)
12. Extra set of car/house keys
13. Disposable diapers
14. Feminine supplies
15. Personal hygiene items (toothpaste, deodorant, shampoo, soap)
16. Toys/games for kids (deck of cards or a roll of construction paper and crayons).
Food / Water/Cooking:
1. Water – 1-2 gal/person for 7 days
2. Nonperishable food – enough for 7 days (peanut butter, bread, canned goods, protein bars)
3. Camp stove and extra fuel
4. Ice chest(s)
5. Extra charcoal/propane for BBQ pit
6. Disposable plates/cups/utensils/napkins
8. Aluminum foil
9. Garbage bags
Other Preparedness Tips:
1. Sit down with your family and develop a plan in case of a hurricane.
2. Take pictures or video of your house and valuables for insurance claims.
3. Prepare shutters or other coverings for doors and windows
4. Reinforce roof trusses
5. Examine and repair roof shingles
6. Caulk openings, flashings and soffits
7. Reinforce entry doors and collect exterior covering as required.
8. Replace hard mulch with soft material
9. Buy and install a backflow-prevention device in your sewer line
10. Trim trees and shrubs
11. Purchase a generator, gas cans, CO detectors and extension cords
12. Decide how to tie down large outdoor equipment
13. Reinforce or replace your garage door. Garage door bracing hardware: www.securedoor.com.
14. Purchase supplies for cleanup and repair
15. Purchase a road atlas. In times of evacuation you will need to develop plans on how to escape depending on advice from your local Emergency Management. Knowing the routes out of town and beyond is very important. Also don’t rely solely on a GPS, if everybody follows the same set of standardized directions on their GPS systems then there is going to be mass congestion. Instead plan a route, and a set of alternate routes by hand ahead of time and save yourself a lot of trouble.
16. A solar powered charging device for electronic products such as phones and tablets may be handy to have. A source to purchase these: www.solio.com.
Finally, take the following points into consideration:
1. Prepare now. You are at risk of some form of disaster. Keep a “Go Bag” of key items (clothes, meds, docs, digital backups).
2. Pet food, medications and crates should readily available should you need to evacuate quickly.
3. Establish out-of-area contact for your family. This reduces phone calls, streamlines check-ins and eases fears of your family members.
4. Make a plan for when you’re at home, at work, at school, in transit. Make sure you have access to “Go Bag”.
5. Educate yourself with your specific local hazards. These will vary greatly in different parts of the country and even from community to community.
6. Is one form of communications down? Try another. Text messages often get out, however, they will likely be delayed due to cell towers being overloaded or down. So, if your phone call fails, try sending a text. Add backup charging sources & cords to your “Go Bag” .
7. Once your area is under an Evacuation Order, leave and do not go back. You’re not just risking your life, but also rescue staff if you need to be rescued. In fact, rescue companies will likely not respond to your rescue call during the worst part of the hurricane due to their own safety and standard operation procedures.
Do you know what to do in the event of a major power outage?
Follow these steps to protect yourself and your family before, during and after a blackout:
Make sure your flashlights and radios have working batteries.
Keep mobile devices charged.
Assemble an emergency kit with warm or dry clothing and medications.
Always have emergency cash on hand.
Make sure your family knows where to take cover in the event of a weather disaster.
Check on neighbors, family and seniors.
Only use generators in open areas away from windows and doors to prevent carbon monoxide poisoning.
If the power was out for an extensive period of time, throw away unsafe food.
Replenish any dead radio and flash light batteries.
Adapted from Ready.gov.