Coming THrough A Crisis

In the wake of the devastation wrought by a tornado which touched down near Pine Lake, Alberta on July 13, insurers were on the scene, doing their best to help victims at the Green Acres campground. Eleven people were killed and more than 130 injured in the wake of the twister. The violence of the storm sent mobile homes, recreational vehicles, boats and tents flying as wind speeds reached more than 300 kilometers per hour. The Insurance Bureau of Canada (IBC) estimates the damage caused by the tornado at between $10 to $15 million.

Sorting through the mess

Following the disaster, which ranks as the fourth deadliest in Canadian history, confusion reigned for victims. Alan Wood, prairie region vice president for IBC, said at the time that the bureau’s first job was to calm concerns for those who suffered property losses. “When we have a weather-related catastrophe, people think it’s not insured, that it’s an ‘Act of God,’ so it’s not covered.” Although windstorm coverage is optional, because of the value of the vehicles involved most of the damaged was insured, according to Wood.

The first insurer on the scene at Pine Lake was Elite Insurance Company, a subsidiary of CGU and Canada’s largest insurer of recreational vehicles (RVs) and motor homes. The company was no stranger to disasters, having insured about half of the mobile homes hit by the Edmonton tornado of 1987. The company had a catastrophe plan which was immediately put into action, says CGU’s Vancouver claims manager, Gordon Rasbach.

Although its was Friday evening, with offices shut down for the weekend, within 24 hours CGU had brought all of its claims staff into the Vancouver office, which handles claims for Elite. A temporary office was established at Underwriters Adjustment Bureau’s (UAB) Red Deer office, which is located about 60 kilometers from Pine Lake, “in anticipation of a flood of claims”. “We didn’t have reports of claims [yet], but because it hit a trailer park, we knew our book of business would be substantially affected.”

Preparing for action

Staff prepared for claimants over the weekend, preparing forms, setting up a toll-free telephone service and blitzing media with advertising to inform its policyholders where to get help. Keeping brokers up to speed was also a key part of the process, he notes. All 1,200 of CGU’s brokers had to be contacted with the emergency claims service information, and many of the brokers kept their offices open throughout the weekend following the disaster in order to field client calls. On the following Monday, victims were allowed back to the campground. “We made arrangements that if they let insureds onto the site, we would accompany them,” says Rasbach. It was an emotional time for victims as they sorted through the disaster site, and the company prepared itself to answer concerns as quickly as possible. Special settlement forms were developed and all necessary documentation was on-site for claimants returning to the campground to identify their property. Elite estimates it insured 35% to 40% of the units involved. By the end of Monday, 95% of those claims were reported and in processing, “we were set up for it, I guarantee nobody’s had that kind of response before”.

Swift cleanup

Many policyholders knew the fate of their vehicles prior to visiting the site. “People recognized their units mainly through the news media reports. A couple of people saw their units up a tree, some in the lake,” Rasbach recounts.

CGU also arranged for the swift removal of the damaged vehicles, setting up repair and storage with area RV dealers. “Our experience in these types of disasters is that once the search and rescue for victims is finished, they want to clean up fast, you really can’t keep up.” In this case, however, due to round-the-clock efforts of claims handlers and appraisers, the removal process “worked like a Swiss clock,” comments Rasbach.

It was this effort, he adds, that distinguishes the Alberta tornado response. While the company has a catastrophe plan in place, “the plans are only as good as the people who back them up”. In this case, staff gave up holiday time and flew in to get the job done. “These are the kinds of reactive approaches that make that make a cat response plan work.”