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High Net Worth

7 Ways to Prevent High Net Worth Flood and Fire Losses

High net worth homes are increasingly being built in disaster-prone areas.
By: | August 30, 2018 • 2 min read

Based on conversations with executives for PURE, Baldwin Krystyn Sherman Partners, AIG’s Private Client Group, Vault, Collector Systems, LLC, and Bruce Gendelman Insurance Services, here are 7 sensible tips brokers can share for preventing fire and flood losses on high net worth properties. Increasingly, high net worth homes are being built in remote areas prone to wildfires, storms and flooding.

1) Have a plan

Or maybe more than one, depending on whether the homeowner will be present or if staff or contractors will be responsible. A risk assessment will help determine what needs to be done to

Stephen Poux
SVP, Head of Risk Management Services and Loss Prevention, AIG’s Private Client Group.

prepare the property for whatever disaster maybe approaching, and how long such preparation might take. Removing possible projectiles or flammable materials can take longer than you expect.

2) Get a backup generator and be sure it works

Backup generators are recommended, and it is important to have a service contract and to test it regularly. Make sure there is adequate fuel, and secure access to more in case of a disaster. Also, know what will be powered by it, and make sure sump pump, if you have one, is on that list – the times you need a sump pump the most are often the same times you lose power.

3) Develop relationships ahead of time

Clients caught in a disaster are going to need help, but so are lots of other people. Establishing a relationship with the contractors, roofers, or other vendors you might need to recover can move them up the priority list after a storm when they’re getting inundated by calls from people they don’t know. Many of those vendors can help disaster proof your home, anyway.

4) Prepare your home for responders

If your property is gated, you need to have a way for police and fire departments to access your home in an emergency, such as a Knox box.

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Ensure that your street number is visible, so emergency services and responders can easily identify your location.

5) Unplug all electronics

Lightning strikes can fry sensitive electronics, but so can power surges when the power is turned back on, which was a major issue after Irma.

6) Be ready to move artwork and collectibles

If you have valuable artwork or collectibles, be sure you have custom crates or other means to safely transport them in the case of an evacuation, and know in advance what your plan is to protect them.

7) Don’t rely on the NFIP

The National Flood Insurance Program is in a state of flux, but for the high net worth, it was never intended to cover all losses.

And when you share these tips with clients, don’t make it too scary. Yes, you want them to take threats seriously, but you don’t want them to become so overwhelmed that they close their minds and don’t even hear you. When discussing risks, include the solutions! &

And for more ways to protect your high net worth home from growing risks, Here’s How to Build a Disaster Resiliency Plan You Can Be Proud Of

Jon McGoran is a novelist and magazine editor based outside of Philadelphia. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

2018 Risk All Stars

Stop Mitigating Risk. Start Conquering It Like These 2018 Risk All Stars

The concept of risk mastery and ownership, as displayed by the 2018 Risk All Stars, includes not simply seeking to control outcomes but taking full responsibility for them.
By: | September 14, 2018 • 3 min read

People talk a lot about how risk managers can get a seat at the table. The discussion implies that the risk manager is an outsider, striving to get the ear or the attention of an insider, the CEO or CFO.

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But there are risk managers who go about things in a different way. And the 2018 Risk All Stars are prime examples of that.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Goodyear’s Craig Melnick had only been with the global tire maker a few months when Hurricane Harvey dumped a record amount of rainfall on Houston.

Brilliant communication between Melnick and his new teammates gave him timely and valuable updates on the condition of manufacturing locations. Melnick remained in Akron, mastering the situation by moving inventory out of the storm’s path and making sure remediation crews were lined up ahead of time to give Goodyear its best leg up once the storm passed and the flood waters receded.

Goodyear’s resiliency in the face of the storm gave it credibility when it went to the insurance markets later that year for renewals. And here is where we hear a key phrase, produced by Kevin Garvey, one of Goodyear’s brokers at Aon.

“The markets always appreciate a risk manager who demonstrates ownership,” Garvey said, in what may be something of an understatement.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Dianne Howard, a 2018 Risk All Star and the director of benefits and risk management for the Palm Beach County School District, achieved ownership of $50 million in property storm exposures for the district.

With FEMA saying it wouldn’t pay again for district storm losses it had already paid for, Howard went to the London markets and was successful in getting coverage. She also hammered out a deal in London that would partially reimburse the district if it suffered a mass shooting and needed to demolish a building, like what happened at Sandy Hook in Connecticut.

2018 Risk All Star Jim Cunningham was well-versed enough to know what traditional risk management theories would say when hospitality workers were suffering too many kitchen cuts. “Put a cut-prevention plan in place,” is the traditional wisdom.

But Cunningham, the vice president of risk management for the gaming company Pinnacle Entertainment, wasn’t satisfied with what looked to him like a Band-Aid approach.

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Instead, he used predictive analytics, depending on his own team to assemble company-specific data, to determine which safety measures should be used company wide. The result? Claims frequency at the company dropped 60 percent in the first year of his program.

Alumine Bellone, a 2018 Risk All Star and the vice president of risk management for Ardent Health Services, faced an overwhelming task: Create a uniform risk management program when her hospital group grew from 14 hospitals in three states to 31 hospitals in seven.

Bellone owned the situation by visiting each facility right before the acquisition and again right after, to make sure each caregiving population was ready to integrate into a standardized risk management system.

After consolidating insurance policies, Bellone achieved $893,000 in synergies.

In each of these cases, and in more on the following pages, we see examples of risk managers who weren’t just knocking on the door; they were owning the room. &

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Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, clarity of vision and passion.

See the complete list of 2018 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]