Are you ready for catastrophe season?

Hurricane season began officially on June 1, and as any experienced responder knows — it only takes one storm making landfall to create chaos. Working a large catastrophe event takes several things: manpower, equipment, planning and resources. At last year’s Preparing to Respond event in Florida, Rusty Amarante, director of operations for BELFOR Property Restoration, outlined how their company responds, and what steps any company entering a catastrophe zone should take in order to protect their workers and prepare for the harsh conditions they will encounter.

“Companies need to scale up or down according to their capabilities,” he cautioned. “It costs more and hurricane work is not for the weak at heart. You need to be willing and prepared to deal with it.”

Responders beware

There are many upfront costs for insurers, restorers and other companies entering a catastrophe zone.

It costs more to access the area, bring in supplies, find accommodations and just manage the day-to-day issues of existing in a decimated area.

Insurance payments to policyholders and vendors will be delayed for a variety of reasons. Contractors working a catastrophe must be prepared to wait anywhere from six to 18 months for payment, so financing these projects is not unusual. They should also be prepared to walk away from some jobs; not all jobs are good ones, Amarante warned.

As with Hurricane Florence, many homeowners do not have flood insurance. They may be behind on their mortgage and could have been planning to just leave the property, he said. Commercial clients may not have the wherewithal to survive a catastrophe event, so it is important for responders to be aware of these issues and do their due diligence on a customer.

During a catastrophe, documentation is critical, both for the vendors providing the services and for the insurers making the payments. Memories become fuzzy, and frequently an adjuster or claims manager who wasn’t onsite is the person questioning what happened during a loss. “If it isn’t documented, it didn’t happen,” shared Amarante. Documentation includes photographs, moisture readings, statements of satisfaction, estimates, invoices and any other items to confirm the scope of work performed.

Third-party administrators can play an important role in any loss, but Amarante encouraged responders to make sure they work with TPAs who understand the additional costs encountered during a catastrophe. Many of the situations companies face are unique to this type of work, and standard pricing models will not apply.

Know before you go

Prior to entering a catastrophe zone, there are a number of issues companies should anticipate to keep everyone safe and ensure repairs and mitigation can occur as needed. Amarante outlined some of the factors BELFOR encounters when they respond to a catastrophe.

1. Fuel: Without energy, nothing happens. If you get someplace and there isn’t any fuel, everything comes to a stop. Gas stations are out of gas, and it is not unusual to see people following tankers to a gas station. Lines at stations will be long, and the gas may be rationed to only 5-10 gallons per person. Be prepared to wait in line for hours. BELFOR brings their own fuel to CAT events so they have control over it. You will have to consider how you’re bringing fuel with you too to keep yourself in business, warned Amarante.
2. Electricity: The restoration process will be slower and it is possible that the utility company could turn off the power as they work on different areas or it could already be off. The question for responders becomes: ’what do you do with your people if there is no power?’
3. Food, water, ice: Do not enter a CAT area expecting to find these items — everything needs to be trucked in after an event. Every store and restaurant is out of these items, so pack dry food, bottled water and energy bars. Driving two hours away for lunch may not be economically feasible, but people still have to eat.
4. Housing: Most housing options or hotels are severely damaged if they are anywhere near the event. It may take several hours just to get to a job site because of the conditions in the area. Hotels may not have power, running water, air conditioning or staff. Parking will be difficult to find. BELFOR has restored hotels in some areas just to provide a place for their staff to stay after a catastrophe. It is possible to build “tent cities,” but they come with some real challenges and at a tremendous cost. For companies that need people as close as possible to a loss, this may be the only option.
5. Looting & crime: There are a number of dangers that arise after a devastating event, and curfews are in place in many areas. BELFOR brings their own security force to keep their workers safe and it is a paramount concern wherever they operate.
6. Health and safety: There are also a number of hazards that arise such as contaminated groundwater and raw sewage. Individuals entering an area should be aware of the dangers and protect themselves accordingly. Try to anticipate the unexpected.
7. Limited medical facilities: With many local hospitals and medical facilities closed, getting treatment for cuts, falls and other injuries can require traveling more than two hours to get assistance. Ambulances will not be available, and pharmacies will not be open. Bring first aid supplies and medications with you, and make sure to get any required vaccinations in advance.
8. Communications: Today’s wireless systems are back in service faster than before, but companies need to be able to communicate with their people, and workers need to be able to communicate with their families. Satellite phones or a satellite dish will be necessary and should be purchased and tested prior to arriving in a CAT area.
9. Trucking companies: Don’t expect UPS or FedEx to deliver items following a catastrophe. It can take anywhere from 10 days to two weeks to deliver items and independent trucking companies will charge a premium with huge delays. It is also not unusual for items to be lost or not delivered.
10. FEMA will confiscate supplies: FEMA has the authority to commandeer supplies and hotel rooms. Be aware that their needs take priority and it may come at a cost to other companies in the area.
11. Storage rental: Finding a place to stage equipment or set up a headquarters location will be difficult since there are no Realtors in the area and industrial parks are frequently flooded. Be prepared to be as far as two hours away from where a job site is located.
12. Welcome to the city: Working in a big city like New York or Chicago brings its own set of challenges and costs. This includes dealing with unions who don’t like contractors being in their buildings; getting building access; and finding places to park vans, trucks and trailers. Even accessing elevators to move equipment and supplies can be challenging, so make sure to have cash for tipping tip elevator operators and other building personnel.

Amarante recommended that any companies responding to major catastrophes be well capitalized and anticipate prolonged payments for their accounts receivable. “Have good relationships with your vendors, since they will help you get through these events,” he advised. “Also make sure your contracts are legal in the state you’re working in. You can’t use a Michigan contract in Florida.” He also stressed the importance of having patience when working an event. “You need to slow down during a major CAT — think before you act or react because there is too much at risk.”

Patricia L. Harman is editor in chief of Claims magazine.