Guide to Preparedness

CHAPTER 1

Up to now we, as independent agents, have thought of catastrophes coming mostly from hurricanes. Now, we need to expand our thinking to include man-made disasters as well as those of nature's.

This manual is intended to bring independent agents in Florida up to date on how to survive a catastrophe based on new developments and changes in our industry.

Florida was ravaged by four hurricanes from mid-August to late September. "It almost seems like we've got a "Kick Me sign on the state." said, Max Mayfield, director of the National Hurricane Center (NHC). Damages from the five hurricanes that lashed the United States - including Hurricane Alex, which brushed past North Carolina's Outer Banks on August 3 - could exceed $25 billion U.S. dollars, and the season will go down as one of the most active on record.

The 2004 season produced 16 named storms, including six major hurricanes. . Since 1966, the Florida peninsula was hit by only one major hurricane, Andrew, in 1992. Hurricane Charley underwent an astonishing intensification just before it made landfall at Punta Gorda, Florida, on August 13, 2004. The storm was this season's prime example of a storm that cranks up its strength almost before forecasters realize it.

The parade of destructive storms left thousands of Floridians homeless. Charley was followed by Hurricane Frances, which came ashore on September 5 with 105-mile-an-hour (169-kilometer-an-hour) winds at Sewall's Point - about 40 miles (64 kilometers) north of West Palm Beach on Florida's Atlantic coast. Frances was not considered a major hurricane at landfall, but still caused severe damage.

Hurricane Ivan was the season's monster storm. For two weeks the hurricane thrashed across the Caribbean Sea and Gulf of Mexico, killing dozens and inflicting massive property damage from the Leeward Islands to Cuba. At one point Ivan's winds reached 165 miles an hour (266 kilometers an hour), making it one of the strongest hurricanes in recorded history. It weakened considerably before its eye finally came ashore near Mobile Bay, Alabama, on September 16. The storm's front right quadrant - which contained its strongest winds and biggest storm surge - smashed into Pensacola, Florida, which is just east of Mobile Bay, with devastating effect.

Hurricane Jeanne, with winds of 115 miles an hour (185 kilometers an hour), went ashore on September 25 at almost the exact same spot as Hurricane Frances. Jeanne had already killed thousands in Haiti before striking Florida.

This year hurricanes killed 116 people in Florida. This is the first time since record-keeping began in 1851 that four hurricanes have impacted Florida in one year. The only other state to have experienced this level of activity was Texas in 1886. Hurricane Ivan was an encore performer with two landfalls during 2004, first as a Category 3 hurricane near Gulf Shores, Ala., and second as a tropical storm over southwestern Louisiana.

William Gray, the Colorado State University meteorologist, and other researchers, have noted that hurricane seasons run in 25-year cycles of alternating active and less-active seasons. Meteorologists think a new cycle of active seasons started in 1995. But Gray dismisses speculation that global warming is causing more hurricanes. "I want to emphasize these are natural changes, and you shouldn't blame it on global warming," he said. "In the last ten years, when the Atlantic basin has been so active, hurricane activity has been down a bit in other [ocean] basins."

James Franklin, the NHC forecaster, said there's no way of knowing whether the 2005 season will be similar to this year's. "Is this a turning point in the long-term steering pattern? Or will we go back next year, and the years to come, to when the steering pattern was turning most storms out to sea?" he said. "It's an open question whether the 2004 season will be an anomaly or a turning point."

The Insurance Information Institute estimates that one in every five Florida homes was impacted by a hurricane to some degree this year. Some 9.4 million Florida residents were evacuated from their homes this season. Losses are expected to eclipse the $34.9-billion in damage caused by Hurricane Andrew in 1992.

On August 24, 1992, South Florida was hit by Hurricane Andrew, the third strongest hurricane in history. Andrew's hurricane wall was strengthening at landfall. Its maximum sustained winds were 145-175 mph. Wind gusts were estimated at 200-225 mph. The death toll was minor the damage was incredible.

At the time, Andrew was the costliest hurricane in history. Over 200,000 were left homeless. If the storm had hit 20 miles north, the losses would have been double that amount.

Yet, despite the fact that Andrew's storm surge was 16.5 ft., it was considered a dry hurricane. Also, it was half the size of Hurricane Hugo. The amount of debris caused by Andrew (approximately 221,000,000 cubic yards) if laid end to end would go to the moon and back 42 times. Dade County lost 66 schools, 35 day care centers and two-thirds of its hurricane shelters

Andrew generated a total of more than 725,000 claims in Florida. Of those, 66% were homeowners claims, 25% were automobile claims, and the remainder were miscellaneous commercial and general liability claims. Insurers dispatched 17,400 claims adjusters (25% of the adjusters in the country) to South Florida.

While our attention is often focused on the "killer storms," smaller, less intense hurricanes can be quite devastating and deadly. Hurricane Agnes came ashore at Panama City in 1972 as a category 1 storm. By the time it had dissipated over the Northeast, 122 people were dead and $2.1 billion (in 1972 dollars) in property had been damaged. Many changes have taken place since Andrew roared ashore in South Florida.

Of course, there is a variety of other natural or man-made disasters - tornadoes, fires, floods, chemical spills, nuclear accidents and terrorism that could hit Florida at any time. It is, therefore, important that every insurance agency be prepared to serve its policyholders in the best way possible in the event of a disaster. Other professionals such as Red Cross, Civil Defense and National Guard know their jobs, and rehearse them, and the public expects a dependable response in an emergency. No less is expected of their insurance agent. We must prepare to function under adverse conditions. Until September 11, 2001 Hurricane Andrew was the single largest catastrophe anywhere in the world. This changed on 9/11/01, with the destruction of the World Trade Center in New York, which is expected to have losses of over $40 billion.