Preparing For The Worst; Hoping For The Best

A retired adjuster in British Columbia offers up a reminder, along with some tips, on why having an up-to-date catastrophe plan is essential.

Every time I see a catastrophe on television — flood, fire, windstorm or earthquake — my mind automatically wonders how and what we would need to handle the resulting claims. I dare say some of you looked at the disaster in Haiti and concluded the majority of the damaged buildings would not be insured and switched to another channel.

However, a devastation such as this one is a reminder to the insurance industry that it should pull out its catastrophe plans, read them over and determine whether they will work or if revisions are required.

Living as I do on the Pacific Coast, I am conscious of the inevitable earthquake that will affect residents of British Columbia; it is not a question of “if” but “when” it will happen. Priority number one, when the earthquake hits, will be survival and many establishments have a stockpile of emergency supplies to help with this goal.

Now let us transpose the damage in Haiti to Vancouver and re-evaluate. The city is filled with bridges and one tunnel. In fact, every time I drive through that tunnel I wonder, what if? The exact location of the earthquake — be it on land or out at sea creating a tsunami — will have great effect on how we proceed.

Being prepared

Yes, the industry has catastrophe plans that have been tried and work well. However, anyone who has been worked a catastrophe, knows the problems that can arise. During these cats, which involved floods, hurricanes and tornadoes, the local infrastructure remained, for the most part, intact, and bringing in adjusters from other parts of the country was not problematic. Adjusters and others involved in claims handling could get to the scene and rent a car and a hotel room and local claims services were still available to help out. This was not the case in Haiti — there was little to no air service, and there were no hotels, restaurants or car rental locations in Port-au-Prince.

When the tornado hit Barrie some years ago, it happened on a Friday evening and I was at a Toronto Blue Jays game. A gentleman a few seats over, who was a doctor in Barrie, got a page and left immediately. I did not understand the full extent of the damage until I arrived on scene Sunday morning.

By Monday, the company I was working with had a mobile office in situ staged with adjuster, appraisers and clerical personnel. We were issuing cheques to insured for $5,000 to get the necessities to get them started on rebuilding their lives.

Accessing the location

In Vancouver, however, if the bridges are down or unsafe, we would be left with areas approachable from only one direction. Hence, adjusters would most likely only be assigned to a specific area. Getting around even an assigned area could be problematic; we would be governed by the availability of rental cars and gasoline in that area. Further to that, I can’t imagine we would even be allowed access to the area until EMO had rescuing those trapped and ensured the area was safe for us to enter.

There is a light here, however, as the delay could be to the industry’s advantage, giving us a little more time to get our ducks in a row.

Getting around

Vancouver has two airports; one is located on the coast where an earthquake and tsunami could render it inoperable, the other is in Delta and it could just slip into the ground. This would leave either Abbotsford in British Columbia, or Bellingham in Washington, if those were not damaged. However, both are a good hour’s drive from Vancouver. Once adjusters arrive at either of these two further airports, what is the plan for getting to Vancouver if rentals cars — and fuel — are scarce? We could be reduced to mini scooters and motorbikes, which, incidentally are easier to lift over obstructions in the road. Insurance companies and adjusting firms should be aware which of their adjusters are able to operate this type of vehicle.

Accommodation

Accommodation could be at a premium, and by the time outside adjusters are brought it, it would be doubtful as to whether enough, if any, accommodation would remain. However, adjusters and support staff cannot be housed hours away, so what are the alternatives? Do we need to set up a facility closer in to the area to provide for their needs? While it might seem far-fetched to assume there’s no accommodation and that another facility would have to be set up, it must be considered when conducting catastrophe planning. While doing so, I recommend checking with EMOs in various areas to determine what local policies are for accommodation. For example, I am under the impression that in Victoria, EMO takes control of all accommodation in the event of an earthquake.

Communication

Communication must be considered. Despite the advances we’ve made in technology — mobile phones and internet — there can be issues with reception if towers are down, etc. Having a back-up, such as ham radio operators, to handle this task should be considered.

As local policy information may be destroyed and the insured’s may not be able to report a loss, insurers should have policy information available out of the immediate area and a computer programme to determine who has earthquake coverage.

I realize all this sounds very alarmist, but we must consider the very worst case scenario, plan for it and if it turns out not to be as bad as we thought, then things should work out well.

Don Manley is a retired adjuster living in British Columbia.