September 2013 Flood Devastation, Coverage, and Loss Adjusting Considerations

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1 September 2013 Flood Devastation, Coverage, and Loss Adjusting Considerations Presented by: Skyler Rorabaugh, CPRP/CPSI/AFO/Executive Director - Estes Valley Recreation & Park District Joe DePaepe, CPCU/CIC/Sr. Vice President - McGriff, CSD Pool Administrator Russell Clark, CPCU/AIC/Executive General Adjuster - Engle Martin Associates

2 Devastation Skyler Rorabaugh, CPRP / CPSI / AFO/ Executive Director Estes Valley Recreation & Park District

3 What Happened Lots of rainfall 17 inches over a few days in some locations Destroyed watersheds; rock slides and mud slides Gilligan s Island Groceries and supplies No outside contact No mail service Limited utilities

4 What Happened (cont.) Access & Travel No immediate outside travel access Trailridge Road, part of highway 7; Blackhawk, Gold Hill, Highway 34, Highway 36 Neighborhood access limited; new roads, backyards Port-a-potty s

5 Business Not As Usual Personnel Glen Haven, Pinewood, Big Elk Meadows, Drake employees Family Housing Commuting Safety Remote work capabilities

6 Business Not As Usual (cont.) Public IGA counterparts Emergency Shelter Storage (resource) Equipment Opportunities for Preparedness (County plan) Public meetings Safety

7 Initial Evaluation Establish Staff Meetings and Plan Stabilize Health and Safety Risks Document Your Losses pre, during, and post pictures (GPS) Extent of Damage to Property Engineer estimates Maintenance records

8 Emergency Repairs FEMA Visit Timeframe Engineer Estimates Contract Agreements Responsibility of maintenance and management Resources Evaluate Insurance Coverage Immediate needs

9 Insurance & FEMA Understand Funding Challenges between FEMA, the State, and Insurance Insurance Review policy and your coverage Collect bids for work Photos and documentation Business Interruption; destination challenges

10 Insurance & FEMA (cont.) FEMA Temporary and Permanent Repairs Permits NEPA Constraints on equipment and resources Contractor availability Material and construction costs Widespread impact Communications with FEMA, Insurance, the State

11 Financial Considerations Cash Flow and Cash Reserves FEMA is a reimbursement program Insurance funds Budgeting; Current Year and Future Years Additional Funding Sources Cash Reserves Leverage available resources and funding Grants Coordinator Project Managers Disaster Specialists

12 Miscellaneous Tips Emergency Action Plan Prepare for FEMA, the State, and Insurance Staff Changes Keep good files Maintenance Records Long-term Recovery It s not a race Continual learning

13 Miscellaneous Tips (cont.) Educating the Public on Recovery Evaluate Your Insurance Coverage Annually Mitigation Discovery of Unknown Damages Volunteer Coordination Staff Burnout

14 Checklist Protect Your Employees Secure Your Assets Facilities, equipment, software, and data temporary relocation Comprehensive Inventory Video/digital record in a safe location away from your property Resume Business Public perception and media coverage Contact Lists Contractors Suppliers

15 Checklist (cont.) Creditors Customers Employees Construct a Financial Plan Continuing payroll expenses and debt obligations Loan assistance Communications Documentation Survival Kit; Evacuation Plan

16 Coverage Joe DePaepe, CPCU / CIC Sr. Vice President McGriff, Seibels & Williams CSD Pool Administrator

17 Flood Coverage Considerations Pool Coverage has $2,000,000 limit Automatic for Scheduled Property only Not associated with coverage available from National Flood Insurance Program Higher limits available

18 Building Business Personal Property Debris Removal Pollution Cleanup Loss of Business Income Extra Expense Ingress - Egress Interruption by Civil Authority Expediting Expense Offsite Service Interruption What We Will Review

19 What We Will Review (cont.) Demolition and Increased Cost of Construction Trees, Shrubs, and Plants installed Property at Unscheduled locations Personal Property of Employees or Volunteers Loss Adjustment Expense Consequential Loss Spoilage

20 Building Buildings on premises must be scheduled Where a building is not scheduled then it is deemed to be self insured Where infrastructure is not scheduled it is deemed to be self insured Once claims for damages have been reimbursed by FEMA you must obtain coverage or your entity will not be eligible for the next event Errors or Omissions will be considered by the Pool Board, reviewed, and charged for

21 Business Personal Property All Owned Business Property not attached to scheduled buildings Where it is not scheduled we assume you choose to self insure it Errors or Omissions will be considered by the Pool Board, reviewed, and charged for

22 Debris Removal - Limited Limited to 25 % of damaged property and does not increase the limit of insurance Debris from unscheduled property not covered From property of others - not covered The Pool does not pay for clean-up of undamaged scheduled premises

23 Pollution Cleanup $25,000 Limited in Property Coverage Form to Member s Scheduled Property damaged by Pollution for the clean-up from any source Pool has First and Third Party Liability from a standalone separate specific Pollution coverage for $1 million - limited to scheduled locations on the Property Form for new events newly discovered Fuel storage tanks must be scheduled

24 Loss of Business Income $250,000 Including Extra Expense Loss of Income and Extra Expense is a supplemental coverage provided by the CSD Pool to our members Coverage includes continuing payroll for key employees as well as ordinary payroll, to the extent that these must necessarily continue, while the covered damaged property is not operational Up to one year with the exercise of due diligence and dispatch to rebuild, repair, or replace

25 Extra Expense Included Within Business Income Limit Extra Expenses within the Limit to reduce or mitigate Business Income Loss Some employees were able to get to the flood damaged area but had to stay in hotels in order to be able to get to work to start mitigating the loss and resume operations Extra Expense to: Temporarily relocate the operations Temporarily replace services Conduct ongoing operations to mitigate Loss

26 Ingress-Egress Included Within Business Income Limit Loss of Business Income from Inability of constituents to reach facility do to a covered cause of loss The Pool does not pay for clean-up of undamaged scheduled property or non-owned property However, Loss of Income may be available through the Business Income Coverage Sublimit if the member suffered a Loss of Income due to the debris around the Scheduled Property making the property inaccessible for business

27 Interruption by Civil Authority Included Within Business Income Limit Loss sustained during the period of time when, as a direct result of physical damage by a peril insured against, access to insured real or personal property is prohibited by order of civil or military authority

28 Expediting Expense This coverage component includes the reasonable extra cost of temporary repair or expediting the repair or replacement of damaged covered property Includes overtime, express freight, or other rapid means of process or transportation Such expenses may not exceed the amount by which the loss under this coverage is thereby reduced

29 Off Site Service Interruption $ 100,000 Coverage for offsite service interruption that could be applied within the $250,000 Business Interruption sublimit

30 Demolition and Increased Cost of Construction This limit is likely not sufficient if the building is large, old, and in need of mandatory upgrades in electric service, plumbing, ingress and egress to current ADA compliance Coverage for the remaining structure that is not damaged by an insured peril and demolition cost to demolish the condemned structure and rebuild

31 Trees, Shrubs and Plants $25,000 Physical damage to member district s Scheduled plants, trees, or shrubs installed at locations listed under the district s Property Schedule

32 Property at Unscheduled Locations $25,000 Property at locations not owned, leased, or under the control of member Property left offsite for repair Work on goods in process, in the custody of a manufacturing subcontractor Property in a public warehouse

33 $25,000 Limit For Each Personal Property of Employees or Volunteers Loss Adjustment Expense Expenses incurred for preparing and certifying details of a claim resulting from a loss which would be payable under the Coverage

34 Consequential Loss Loss to the insured property caused by a change of temperature or humidity, or by interruption of power, heat, air conditioning, or refrigeration resulting from physical loss or damage by a covered peril Spoilage

35 What is Not Covered Unscheduled Property Undervalued Property (125% Margin Clause) Non Owned Property Damage Debris Removal Contingent Business interruption Mold Asbestos Excluded Property in Coverage Form Limits above sublimits stated unless scheduled

36 Terms and Conditions Proper Notice Documentation Photos Mitigate further damage Cooperation with investigation Signed Proof of Loss

37 Loss Adjustment Russell Clark, CPCU / AIC Executive General Adjuster Engle Martin Associates

38 Members Affected 24 members made claims Of the 24, 10 members had claims that were either not covered or under the deductible Underground pipes Claims for land improvements Claims for trails, ponds, landscaping and roads 14 remaining members have claims that may total $1.8 million Largest claim is about $450,000 Number of locations to deal with One member had 12 buildings In this case the locations per member were minor

39 Accessibility of/to Locations Hwy 34 to Estes was down ATV & helicopter access only Hwy 36 to Estes was down Had to take 119 up through Central City & Black Hawk; Three-hour drive Estes Park became like an island in the middle of an ocean 1 ½ mile hike to get into Jamestown

40 Accessibility of/to Locations (cont.) In many cases temporary access roads had to be built to do any type of repair Required for temporary power Required to build roads Smaller bridges were out No access to some buildings and homes Due to road damage The Jamestown WWTP was not accessible for seven months River cut new mini canyons through Lyons Dam ruined in Loveland

41 Complications In The Process Difficulty in finding new locations for temporary building or replacement buildings Need to work with FEMA & Insurance adjusters simultaneously Who gets priority Many times we have to deal with Historical (hysterical) societies Temporary buildings are required for storage Current code enforcement makes erecting temporary buildings difficult

42 Complications In The Process (cont.) Claims for property we rarely see WWTP for example What are the EE implications when the water system is down? BI claims? Bridges Power line systems Hydro power plant RCV/ ACV complication, dam is ruined

43 What Entities Must Do Secure all employees and their safety Assemble teams and evaluate all damages Prioritize repairs As part of an emergency plan, have a large restoration contractor on board & ready to go Start pulling up documentation, call contractors, and begin getting bids Begin assembling inventories with as much detail as possible Age & RCV Cost

44 What Is Needed To Get Payment Original documentation Inventories with pricing and ages of items Replacement documentation Ask for an advance, 33% of projected loss

45 Tough Situations Experienced Finding temporary facilities to operate out of

46 Opportunities for Improvement Entities should hire part time resources to assemble claims, so normal operations can continue

47 Thank You! Contact Information Skyler Rorabaugh, CPRP / CPSI / AFO / skyler@evrpd.com Executive Director, Estes Valley Recreation and Park District Joe DePaepe, CPCU / CIC / jdepaepe@mcgriff.com Sr. Vice President, McGriff, CSD Pool Administrator Russell Clark, CPCU / AIC / rclark@englemartin.com Executive General Adjuster, Engle Martin Associates