Think you’re ready for the next disaster? So did I.
It’s the disaster you don’t anticipate that poses the biggest risk, says Louie Castoria in his story of battling wildfires encroaching on his home.
If an ounce of prevention is worth a pound of cure, a pound of disaster preparedness is surely worth at least a ton of property insurance. The best insurance policy is the one the policyholder never has to call upon to pay an avoidable loss.
The insurance community plays a vital role in protecting the public from some of the financial losses caused by disasters but can also help prevent the physical losses they cause.
A personal story
In California, we are keenly aware of the risk of earthquakes. If we had any doubt about their destructive force, those doubts, along with much else, were erased in 1989 by the Loma Prieta Earthquake — the one that interrupted the World Series, broke a section of the Bay Bridge and collapsed the double-deck portion of a major highway.
When my wife and I built our new house, we took precautions. The structure is bolted to the foundation. Steel I-beams in the basement support the house. The basement has foot-thick reinforced concrete walls. It was engineered, so we were told, to withstand a 9.0 earthquake. We’re glad that estimate has never been put to the test.
We have a large water supply atop the hill behind our house to gravity-feed water to us if the power goes out, making the well pump useless. We have sealed containers of medical supplies, food, portable cooking ranges, tents, and other necessities in case nature compels us to set up a home-campground in our yard. We also have a garden, a greenhouse, two beehives, and a chicken coop to add to the food supply.
It’s the disaster you don’t anticipate that poses the biggest risk. In the early hours of Aug. 16, 2020, we and nearly everyone else in the Bay Area were awakened by an extraordinary demonstration of nature’s power, a “dry lightning” storm that unleashed a barrage of more than 11,000 lightning bolts into the drought-parched coastal forests. The storm continued into Aug. 18 as it moved across the state. Within hours, the state was battling 367 separate fires in its northern counties. Individual fires quickly coalesced into huge conflagrations.
Currently, more than 20 of those fires are still not fully contained. The fires have so far burned over 2,247 square miles — putting that in perspective, a land area greater than Delaware and more than twice the size of Rhode Island.
As of Sept. 15, the “CZU Lightning Complex Fire” continues to burn. The California Department of Forestry and Fire Protection (Cal Fire) reported it as covering 86,509 acres and 91% contained. It has stopped its northerly march, about 10 miles away from our house in Half Moon Bay, but the smoke from the fires has fouled the air quality, which is now classified as “unhealthy” or “hazardous” as measured each day by AirNow.gov.
We were lucky but woefully unprepared. Over the years, trees and bushes had grown and multiplied on our hill, leaving us without a defensible barrier against the CZU fire if it had leaped across the county road to our South. For four days, 10 volunteers and we cleared a 40-foot wide swath of bushes and limbed-up the trees to make a fire break.
As a 66-year-old attorney, I am more a “desk jockey” than a lumberjack. Suffice it to say that I’m still aching in places I didn’t know I had. That, too, could have been avoided if I had made a hobby of defending against fires, doing the tree-trimming and bush-whacking a little bit at a time. Lesson learned, and, thank God, not the hardest way.
My story is far less harrowing than those of the victims of hurricanes, tornadoes, floods, and the myriad other calamities Americans face each year. Still, it’s the first time since Loma Prieta that I felt that all our lives and worldly belongings were at risk. It was a call to action, and not only about earthquake and fire safety.
It’s one thing to watch a disaster unfold 2,000 miles away on the evening news but quite another to see it advancing directly toward you. By that time, it is usually too late to board-up the windows, limb up the trees, fill up the sandbags, or store up the supplies to tide the family over until normalcy returns.
Preparedness: a role for insurance
The Organisation for Economic Co-operation and Development published a 2015 survey, “Disaster Risk Financing,” which includes the roles for insurers, public-funding, and mixed funding programs. While it focuses on the aftermath of disasters, the report notes the importance of people being aware of disaster risks and modifying behaviors to reduce them:
Disaster risk awareness is a key element of DRM [Disaster risk Management] strategies. Human-induced factors greatly contribute to the costs of disasters. Changes in patterns of human behavior, perception and decision-making at all levels of government and society, therefore, can lead to a substantial reduction in disaster risk. Improving the level of risk awareness and the quality of disaster risk reduction education tools clearly stands out as an essential feature. Improving public awareness of financial protection options and the need for financial strategies to address disaster risks can also make an important contribution to increasing disaster insurance coverage.
In short, the more “woke” we are, the better we can avoid or reduce disaster losses, and the more available and affordable property and casualty insurance can become.
On a macro level, insurers, governments, and think tanks are publishing reams of virtual white papers on the need to enhance preparedness for and resilience to disasters. The Federal Emergency Management Agency has developed a series of disaster preparedness educational resources available at Ready.gov. There is no shortage of information. Why, then, did I ignore the wildfire risk for 30 years? I was in the Boy Scouts long enough to learn the motto: Be Prepared.
People sometimes need to be reminded of what they already know. For us, it was very close to home. I’ve listened for years to public service announcements about earthquake preparedness. But we didn’t get our act together until my wife, a registered nurse and public health nurse, started collecting and storing the things we’ll need someday. (Nurses are like that — they get things done. We lawyers prefer to talk the problem into submission.)
This is where you, the insurance professional, comes onto the stage. Though it’s not among your many duties as insurance licensees, you may be in a prime position to remind your policyholders about that pound of prevention mentioned earlier. Along with renewing the homeowner’s or business policy, or when sending that annual calendar or birthday card to your customers, please consider including a reminder to get prepared for disasters that they may face, and include links to publications from FEMA, the local fire district, and other reliable sources. You may be doing them the biggest favor of their lives.
Takeaways
2020 has been a year of unanticipated challenges. We also still have the anticipated ones. In California and other Western states, the threat of wildfires is ever-present, especially in drought years. Disasters vary by region. Policyholders in Omaha lose little sleep for fear of a tsunami, just as we on the coast rarely see a tornado. This we share: Each of us is susceptible to some forms of natural or man-made disasters.
A few take-away thoughts:
- Procrastinating is not a good strategy.
- Every dollar saved by avoiding or mitigating a loss is a dollar available to cover the unavoidable losses.
- The OECD and FEMA can provide plans to cope with disasters, but a personal outreach from a trusted advisor can motivate people to adopt those plans, and sometimes even save a life.
This time, call me lucky. Next time, I hope I won’t need luck.
Louie Castoria is the Chair Emeritus of the Professional Liability Practice Group in Kaufman Dolowich & Voluck LLP, a national law firm, a Mediator, and an Adjunct Professor at Golden Gate University School of Law. He is a member of the Board of Directors of the Professional Liability Defense Federation. This article does not provide legal advice. The views expressed are the author’s and not necessarily the firm’s or its clients’.
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