2022 Sept PIA Vermont

Life for today and tomorrow

COVER

FEATURE

27 As hurricane season continues factors that could drive the North Atlantic’s risk

Statements of fact and opinion in PIA Magazine are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of the Professional Insurance Agents. Participation in PIA events, activities, and/or publications is available on a nondiscriminatory basis and does not reflect PIA endorsement of the products and/or services.

President and CEO Jeff Parmenter, CPCU, ARM; Executive Director Kelly K. Norris, CAE; Communications Director Katherine Morra; Editor-In-Chief Jaye Czupryna; Advertising Sales Executive Susan Heath; Senior Magazine Designer Sue Jacobsen; Communications Department contributors: Athena Cancio, David Cayole, Patricia Corlett, Anne Dolfi, Crystal Ringler, Calley Rupp and Lily Scoville. Postmaster: Send address changes to: Professional Insurance Agents Magazine, 25 Chamberlain St., Glenmont, NY 12077-0997.

“Professional Insurance Agents” is published monthly by PIA Management Services Inc., except for a combined July/August issue. Professional Insurance Agents, 25 Chamberlain St., P.O. Box 997, Glenmont, NY 12077-0997; (518) 434-3111 or toll-free (800) 424-4244; email pia@pia.org; World Wide Web address: pia.org.

©2022 Professional Insurance Agents. All rights reserved. No material within this publication may be reproduced—in whole or in part—without the express written consent of the publisher.

COVER DESIGN Cayole

BRIEFIN

It’s all in the planning

Preparedness. It can mean the difference between helping your clients get back on their feet quickly or having them look for a new insurance agent after a disaster. You need to be ready to help your clients when they need you the most. Part of the preparation is helping them know what to expect before they need to file a claim. Do you know the ins and outs of the restoration process so you can help your clients understand the process and timeline? If not, read this month’s cover article “Don’t let your clients do it alone.” And, it’s been determined that hurricane season runs from June 1 through Nov. 30— with the most active part of the season starting now—but have you considered all the influences that help to deter mine how active a hurricane season will be? This month’s feature article “As hurricane season continues” examines the factors that drive the North Atlantic’s “above-normal” risk this Educatingyear.your

clients is one part of the preparedness equation, the other part is making sure your agency is ready. If the same disaster that affects your clients affects your agency, are you ready to hit the ground running and keep moving forward as if nothing happened? You have a better chance of doing so if you take the time now to plan what you would do after a disaster.

Preparedness

In recent years, hurricanes and tropical storms have been heading up the East Coast with greater frequency. Every hurricane season, we are reminded that bad weather, natural disasters and more can happen anywhere at any time. Having a plan in place before a storm happens is vital to determine how your agency will function after one hits your area.

Pre-disaster preparation gives you the chance to review your policies, have trial runs and update actions/respon sibilities accordingly. If, based on your most recent office disaster plan, Jack is supposed to bring vital information home with him before a storm is scheduled to hit your area—but he left your agency six months ago—does Jill (his replacement) know it is now her responsibility to protect the Remember,data?events that can affect an agency go beyond major natural disasters, pandemics or terrorists attacks. They can include:

• having your computer system down for weeks;

• a fire that destroys your records;

• local power outages;

• localized flooding;

• a civil authority refusing access to your business due to a riot or other civil commotion;

• a chemical spill or leak;

• a nuclear accident; or

• unsafe conditions at nearby properties.

Your agency’s disaster and recovery plan should include information such as plan development; office resources and personnel issues; external business considerations; post-event activities; and consumer information. It’s also a good idea to include an appendix for quick reference. Your plan should help you:

• assess your agency’s vulnerability to potential risks;

• identify key contacts and their contact information;

• create a catastrophe contingency budget;

• identify critical business functions;

• establish a back-up plan (for data);

• design an evacuation plan (for employees);

• create a shelter-in-place plan; and

• establish a claims process (for clients).

Your agency’s plan should address the internal workings of your agency, as well as how you are going to continue operations and respond to client concerns and needs in the post-event aftermath. A disaster and recovery plan is not a one-time deal. After you create the initial plan, you should conduct a mandatory annual review to account for new information and to make sure everyone in your agency is familiar with the plan and knows his or her responsibilities.

PIA has tools to help

PIA offers its members resources and tool kits help your planning process and prepare your agency (and your clients) for a worst-case scenario. These include the •following:theFlood Insurance Tool Kit;

• Hurricane Info Central;

• Storm Info Central; and

• member communications.

What your insureds need to know before filing a claim DISASTER CLAIMS

When your insureds have su ered a loss—especially one caused by a disaster—they may not be thinking clearly. That’s why you are there to help them each step of the way. To make it easier, here are some helpful tips that you can use to guide them through the claims process.

Even before they have claims:

Make sure your insureds know to call your agency if they su er a loss

Educate them, so they understand the claims process, and understand what their policies will and will not cover

Only 30% of homeowners feel confident that they know what’s covered in their home insurance plan.In2019,

5% of insured homeowners filed a claim

Make sure they know how their deductible works

Give them an idea of how long the typical claims process may take, explain how it might be longer if a claim is more complex.

Make sure they know the di erence between:

Replacement cost and actual cash value

Extended and guaranteed replacement cost

The most common errors people make when filing an insurance claim include:

Having the wrong coverage

54% of homeowners think home insurance is based on the home’s market value

Waiting too long to file a claim

Trying to handle a claim on their own

Not maintaining their property Not conducting a home inventory

Make sure they know they are not alone. Start educating your clients today about the claims process.

These resources are found on the PIA Northeast website (www.pia.org) under “Tools and Resources.” In addition, if you have questions unanswered by these resources, you can contact PIA’s Industry Resource Center at resource center@pia.org or (800) 424-4244.

Flood Insurance Tool Kit

According to the Federal Emergency Management Agency, flooding is the most-common natural disaster in the U.S. Moreover, nearly 30% of all insurance claims are made by people in low- to moderate-risk areas. To help association members with their questions regarding flood insurance, PIA provides them with access to its Flood Insurance Tool Kit. This information can help you advise current and prospective clients and answer their floodrisk Likequestions.allofPIA disaster-related resources, this tool kit is updated as needed with news about floods (federal and

before and after the storm and offer tips for both your agency and your clients on how to prepare and what you should do in the aftermath.

PIA’s Hurricane Info Central also includes a live Twitter feed to the National Hurricane Center’s updates on named storms, so PIA members could track the storms if they make their way up the East Coast.

Member communications

PIA recognizes that each event (natural or fabricated) is unique. As different events unfold, PIA will post infor mation on PIA Northeast News & Media (blog.pia.org) and on Facebook, Twitter and LinkedIn; and send out emails to make sure you have the information you need, in a format that you can access.

Insurance(federalnewstooldisaster-relatedPIAresources,thiskitisupdatedasneededwithaboutfloodsandstate-specific)andtheNationalFloodProgram.

Like all of

If you haven’t done so already, contact PIA’s Industry Resource Center with your agency’s emergency contact person and a cell-phone number that your association can use if it needs to get in touch with you. We promise to use this information only in a true emergency.

Consumer content

You have made a promise to help your clients on their worst day. This promise is kept easily when the event is unique to the client, but if your agency is affected by a shared event, you still need to keep that promise.

To make sure your clients are informed about any disaster that might affect them, all the resources and tool kits listed above also have resources that are designed to educate your clients. There also are links to marketing materials that you can send to them (many of which have sign-offs for declined coverage that you can use in the event of an errors-and-omissions claim).

insurance. For more information, email design.print@pia.org.

Storm/Hurricane Info Central

PIA keeps track of winter storms and hurricanes that may threaten its member agencies. A tool kit for each includes information about an imminent storm (e.g., snow or hurricane, respectively). They provide information for

If you want more information about PIA’s marketing materials, consumer content or are interested in creating your own campaign, contact PIA’s Design & Print at design.print@pia.org or (800) 424-4244, ext. 338.

Remember: A little planning now goes a long way later. Your association will be with you before, during and after the events that Mother Nature may throw at you, so you can concentrate on getting your agency back in order and fulfilling the promise you have made to your clients.

CLARE IRVINE, ESQ. Government affairs counsel, PIA Northeast Insuring Hogwarts: A guide for Muggle schools

A recurring theme throughout the seven Harry Potter books and eight movies is that Hogwarts, the school for young wizards in the United Kingdom, is a very dangerous place. From the straightforward dangers that come with potions and Quidditch to the more frightening risks of Dementors, the entire Triwizard Tournament, and the ongoing threat of He-Who-Must-Not-Be-Named—Hogwarts poses a surprisingly high level of danger for 11- to 18-year-old students. Even student punishments have an element of danger, including a trip to the Forbidden Forest to investigate the crime of killing unicorns.

So, how would you insure a school with such a range of risks? While the likeli hood of actual Dementors trying to take a student’s soul should not be high on the list of risks facing American students, many similar dangers do create risks and potential exposures for school districts across the country. Rather than talk about real schools, let’s use Hogwarts to examine certain consider ations for insuring American schools from student injuries, angry parents, and outside risks.

Alleged discrimination

For Harry and the readers, the Sorting Hat has a starring role in the intro duction to Hogwarts. Harry and the other first-year students arrive at school to be sorted into houses immediately based on an expert hat’s determination of which house they would best fit. The basics come from the house system common in British schools, which sorts students for purposes of intra-school competitions and boarding when applicable. Additionally, Hogwarts houses are each associated with different traits and qualities. While Gryffindors are considered loyal, Slytherins are known as cunning and for becoming dark Harrywizards.1knewlittle

about Hogwarts when he stepped up for his sorting, but he already knew he did not want to end up in Slytherin. When he made this clear to the Sorting Hat, the Sorting Hat assigns him to Gryffindor. Instead of living in a dungeon, Harry gets to live in a tower with his new best friend, Ron Weasley. He goes on to play Quidditch for Gryffindor and he spend most of his next six years at school with other Gryffindors. Throughout the book series, house membership becomes a short-hand for student characteris tics with deviances noticeable (e.g., Cedric Diggory being a surprising leader from Hufflepuff).

The parents of Harry’s peers seemed to have no issues with the immediate stereotyping of their 11-year-olds by the Sorting Hat, but modern parents may have concerns. They may have raised their little witches or wizards with dreams of them being a brainy Ravenclaw only for the Sorting Hat to announce, “Hufflepuff!” Nonwizard parents (Muggles) may have their pride of having a wizard son erased upon learning he had been assigned to the evil house, Slytherin (and then been forced to live in a dungeon). That is only the start to the issues parents may have with Hogwarts’ attitudes toward student equality. Harry broke the rules only to end up on the Quidditch team— an opportunity no other first-year student received. Professors doled out punishments and awarded house points with such wild inconsistency that some students’ grumbles are wholly justified.

In many instances, unhappy parents talk to school administrators and work things out on their own. A student may not be reassigned from Slytherin, but the headmaster may convince his parents that the assignment confirms their child’s cunning resourcefulness along with assurances the dungeons are quite comfortable. Increasingly, parents have been unable to work through

LEGAL

their issues with the school and file a lawsuit. Hogwarts may be a castle, but it still needs protection from such lawsuits.

A thorough general liability policy for schools should always include litiga tion defense costs. Schools cannot access this coverage to pre-emptively defend against a lawsuit, but as soon as the parents’ lawyer serves Hogwarts with the court filings—alleging the school discriminated against their darling witch by penalizing her repeatedly for no clear reason—Hogwarts can access the defense coverage. Ideally, Hogwarts would prepare for the inevitable parent lawsuit against the school, educators, and other staff by having a specialized general liability policy that specifically includes coverage for effectively every thing going on at the school.

Hogwarts professors—intentionally or not—may pose just as much of a risk due to a wrong comment or intentional act. The liability policy specifically should include them or be complimented by an educators’ policy that ensures coverage. A key term to watch for is whether the insurance carrier selects the defense attorney or if the carrier reimburses the school for the attorney of its choosing. While general liability policies may not always be as exten sive as the name suggests, the defense litigation costs may end up saving Hogwarts enough money to consider paying house elves for their labor.

Threats outsidersfrom

Throughout the Harry Potter series, the school faced the ongoing threat of Lord Voldemort or He-WhoMust-Not-Be-Named. The most-evil wizard to ever live, devoted his time to trying to kill Harry because of a prophecy. During Harry’s time at Hogwarts, Voldemort went to great lengths to try and breach the security of the school. He attempted to do so through a teacher, through another student, and then just breaching the defenses of the school. The consis tent threat to Hogwarts and students created a real risk that the administration (Dumbledore, but really Professor McGonagall) would need to consider insurance to cover.

Whenever Hogwarts did come under attack, the school and its community did not have time to wait for someone to file a lawsuit to trigger coverage. This would quickly expose the gaps in coverage caused by exclusions in the general liability policy Hogwarts obtained to defend against angry parents filing lawsuits. To adequately protect the school, students, staff, and magical creatures

in the event of an attack, Hogwarts would be advised to look at the UK wizarding community’s version of active-shooter insurance.

Generally, active-shooter policies are triggered as soon as a person commits a targeted attack on the property of the insured. If Hogwarts obtained such coverage by the seventh book’s Battle of Hogwarts, then coverage would have been trig gered when the Death Eaters—Lord Voldemort’s followers—breached the defenses that had kept them from the Hogwarts grounds. They would not necessarily need to break through the only door to the school/ castle for coverage to take effect.

The Battle of Hogwarts led to exten sive damage to Hogwarts. While magic could help with some of the repairs, active-shooter policies also should include coverage for the nonphysical costs to address the extensive harm caused by an attack on a school. A thorough policy to provide Hogwarts and the wizarding community with the resources they need should include coverage for crisis management, counseling services, and funeral expenses. Hogwarts also should be wary of terrorism exclusions altogether. No policy may cover all the risks posed to Hogwarts from outside attacks. For example, an activeshooter policy most likely would not have applied when the Triwizard Tournament, which ended with Harry and proud Hufflepuff Cedric Diggory being transported off school grounds. Yet, one of the most valuable aspects of an active-shooter policy is a security review that would help the school bolster its defenses. For schools looking to best protect themselves, the active-shooter poli cy’s value may come from the services available to do its best to minimize

the risk of student harm. Hogwarts may only have one entry into the main building, but the risk assessment would likely have alerted the school that the Triwizard Tournament may have been an inadvisable idea for many reasons, such as bringing dragons onto the campus.

Conclusion

No amount of effort by Hogwarts’s administrators or their insurer can fully protect students from danger—after all, Hogwarts students learn how to disarm each other and play a sport that involves flying around on broom sticks. Like any school, Hogwarts still would need to continually reassess its insurance coverages to ensure the best defenses against litigious parents and outside threats.

Irvine is PIA Northeast’s government affairs counsel.

1 While not all Slytherins become dark wizards, no dark wizards have come from Gryffindor, Hufflepuff or Ravenclaw.

Technology/automation resources

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How can we help you? Call us at 732.972.0600 or email us at info@brooks-ins.com Insurance Agency A Venbrook Company 70 Bridge Plaza Drive, Manalapan, NJ 07726 732.972.0600 www.brooks-ins.com Group Insurance Agency, LLC | NJ License 1575143 Brooks Insurance Agency, LLC is a wholly-owned subsidiary of Venbrook Group, LLC. All Rights Reserved.

How to stand out in business and sales

Today, it seems as though work ethic, sales skills, follow-up, and attention to detail are all at historic lows in many sales forces. So, it should be easy to attract positive attention in business and sales if you follow the fundamentals of good sales behavior.

These fundamentals will help you stand out from all salespeople—even the best. Many of them will make the average salesperson groan because they require next-level commitment and hard work. On the other hand, the top salespeople will love them—and probably do most of them already.

Some of these tips will help you stand out among other salespeople from your clients’ perspective—while others are tips to help you stand out from your peers’ perspective.

From the perspectiveclient’s

To help meet your prospective and current clients’ expectations, remember to do the following: No. 1: Be responsive. Answer your phone—and respond to emails— on nights and weekends. Answer your phone right away or return calls within an hour or two. Return emails within a few hours. Make

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sure you are early for all your appointments. Always follow-up—even if you’ve handed the client off to someone else, and overcommunicate: Don’t make a client call you to check on how things are going.

No. 2: Know your clients. Learn as much as you can about each of your clients. And, always be on the lookout for new ways to make your clients’ lives easier. Find other ways to help your clients and solve their problems, both those related to your business and those that are not related. Make sure you focus on the prospect’s or client’s needs first, and always do what is in his or her best interest.

No. 3: Have the right attitude. Focus on what you can do, not what you can’t. Be open to what is being said and be affirmative with your responses. Always be honest with your clients and operate with complete integrity.

No. 4: Have good follow through. Make it as simple as possible for people to do business with you. Eliminate anything in your sales process that is difficult or time consuming for the prospect or client. Deliver more than promised and expected; go the extra mile. Don’t forget to send hand-written thank-you notes—I recommend using blue ink—to your clients.

From the peer’s perspective

To stand out among your peers, remember to do the following: No. 1: Have a good system. Follow-up with leads nine to 13 times—and in some cases even more than that. Most sales and appointments are made after the fourth contact. Be over prepared for all sales calls and interactions. Know exactly what to do and say in all sales situations. Always do one more (e.g., make one more call, send one more thank-you note, make one more contact). Prospect and grow your business every day—always be building and nurturing your network.

No. 2: Continue to learn. Continually improve your sales and customer service skills. Never stop learning and be coachable. Stay updated on every thing going on in your industry and with your clients’ businesses. Join associa tions, read industry publications, etc.

No. 3: Have the right attitude. Always be growing personally and profession ally. Always have a great attitude. Be enthusiastic. Be known as the hardest worker—or one of the hardest workers anyone knows.

No. 4: Have the right work ethic. Connect other people, and outwork everyone else. Always put in extra effort—persist and persevere. Get along with people. Focus on building many good, solid, long-term relationships with clients, co-workers, friends and family. Make the call you’ve been thinking about forever, but you have been putting off because you’re afraid to make it. You’re going to have to fail a lot to be successful in sales. Your goal should be to at least double your failure rate—that way you’ll increase your sales rate, too.

Make your life better

Once you’ve incorporated these practices into your professional life, you may find that your personal life also benefits from your new attitude and capabili ties. To continue this growth, here are some additional steps that you can take:

No. 1: The right educational investments. To become better professionally and personally, invest in yourself. Read books, take courses and classes, go to seminars, and do other things to constantly improve. Don’t be reluctant to do hard things.

No. 2: The right environment. Surround yourself with the right people and the right environments.

No. 3: The right focus. Pay atten tion to details. Focus on solutions, not problems or who’s to blame. There will be time to analyze what happened later. Fix the problem first.

No. 4: The right attitude. Don’t be afraid to make mistakes. Just make sure they aren’t thoughtless or repeated mistakes. Be accountable and take 100% responsibility for everything in your life. Don’t make excuses.

Chapin is a motivational sales speaker, coach, and trainer. For his free eBook: 30 Ideas to Double Sales and monthly article, or to have him speak at your next event, go to www.completeselling.com. He has over 34 years of sales experience as a No. 1 sales rep, and he is the author of the 2010 sales book of the year: Sales Encyclopedia (Axiom Book Awards).

Reach him at johnchapin@complete selling.com.

YOUR CLIENTS DO IT ALONE DON’T LET

Quick action leads to better restoration

isasters from water, fire, smoke or mold can occur at any time. These types of disasters are not only stressful for property owners, but costly. Common restoration and mitigation timelines and repair estimates can increase drastically when unexpected asbestos materials are discovered, subrogation investigation occurs, air quality testing is needed, or when homeowners attempt to DIY. It’s important to understand the typical process and timelines; do’s and don’ts to pass on to policyholders; and how these additional problems can affect the bottom-line costs, and the restoration and mitigation process.

Broken pipes and hoses, sump-pump backups, appliance leaks, or toilet over flows occur in homes and businesses every day, and let’s not forget seasonal concerns such as ice dams, frozen pipes, flooding and hurricanes. And when they do, homeowners need to react—fast! Often, homeowners don’t realize how quickly mold will grow, wood floors will experience cupping and building materials will become saturated. The common misconception is, “If I don’t see water, it doesn’t exist.” But water easily finds its way between floorboards and baseboards, soaks concrete and drywall, and carpet pads will act as sponges to keep subfloors wet and delaminating carpets. Shop-vacs and standalone fans for DIYers aren’t powerful enough to create the airflow needed to thoroughly dry materials and belongings. That’s why we say: Don’t wait to mitigate!

Asbestos

Often, houses built prior to 1978 have asbestos-containing building material, which is included in tile flooring, joint compound, drywall, mastic (tile adhe sive), vermiculite and pipe insulation, siding, and plaster. Even today, asbestos materials find their way into recently built or repaired homes because powerful storms and hurricanes cause supply-versus-demand struggles, and everyday supply-chain issues. When asbestos materials are suspected, the restoration company is required to stop its work until the testing of materials and proper removal and abatement occur. While each state’s laws can vary on who must be notified and how long this process might take (days to weeks), the abate ment, containment and testing can increase claims by thousands of dollars and this unforeseen challenge immediately stops the drying process, creating potential for mold growth.

Ask the right questions

Information is a powerful tool to help restoration companies quickly and accurately assist clients and reduce costs. The more questions insurance profes sionals ask clients, the better prepared the restoration company will be with needed equipment, products, staff members and timeline needs. Helpful ques tions to ask include:

Is the water source fixed? For example, if the cause of the damage was a burst pipe the restoration company can’t begin the drying process until the pipe is fixed, and roofing repairs are needed before mitigating an ice-dam leak.

Exactly what belongings are wet? Different items are treated with specific equipment and products.

How large is the affected space and where did the water travel? The answer to this question will help the restoration company determine the correct quantity of equipment.

Is it safe to use electric outlets? Water can find its way into outlets easily, causing wire-shorts and outages, or safety concerns for the homeowner and the restoration company. And, while the restoration company knows its drying equipment is loud, customers turning it off for some quiet time only delays the drying process.

Set expectations

To set policyholders’ expecta tions, it’s helpful to share the three phases of the recovery process after a water loss:

Phase 1: andresponse—jobEmergencysiteinspectionassessment

Phase 2: Water removal and drying—daily inspection of job progress

Phase 3: Reinstallation, cleaning, and prevent spread of mold growth

Mold remediation

No other disaster process is more misunderstood than mold reme diation. (Mis)information on the internet and tales-of-old have led countless homeowners to overlook health effects, and DIYers to try to eradicate mold growth themselves by using bleach or paint (and becoming frustrated when these methods fail). They disbelieve how rapidly mold grows, the remediation process itself, and why some family members expe rience mold-related health struggles while others don’t, so let’s set the record straight.

Mold is more than a smelly nuisance. Indoor mold contamination has been identified as a major contributor to allergies and respiratory problems, property destruction, and poor indoor air quality, and there are over 100,000 unique types. Mold can grow in as little as 24-48 hours any time excessive moisture is present indoors—whether the result of a flood, a slow leak, broken pipe, or just high humidity—and quickly spreads as mold spores fly from room-to-room with even the slightest air flow, and a hot air/cooling system

can transfer mold in attics and base ments to other areas.

As mold multiples it releases chem icals called mycotoxins. These mycotoxins are especially harmful to seniors and children, diabetics, chemotherapy and surgery patients, allergy or asthma sufferers and others who are immune-suppressed. They cause itchy eyes, runny noses, coughing or wheezing, aggravation of asthma or allergies, skin rashes, headaches, drowsiness, conges tion and more. It’s common for one household member to be more sensi tive to mycotoxins and experience symptoms while others don’t. Those individuals with exposure concerns should avoid spaces and belongings with mold.

This pesky fungus can grow on virtu ally any organic material if oxygen and moisture/water are present. The growth requirements are:

Spore + Moisture + Temperature + Nutrient + Stagnant Air Flow = Mold Growth

When properties have noticeable mold, a thorough inspection is needed to verify and repair the water source. Inspectors use scope cameras as a non-invasive way to look for mold lurking behind walls, under floors and above ceilings.

When your client can’t see mold, but there is an earthy or mildew smell—or someone is experiencing reactions to the mycotoxins—then air-quality testing is helpful. These tests are completed by a certified professional, who typically takes at least three samples (depending on overall square footage)—including one outside the house—which will be overnighted to an accredited labora tory for definitive results and guidance on what areas require cleanup and removal.

Now that a restoration company knows where to begin, the priority is the safety of the homeowner and mold-removal technicians. Setting-up contain ment barriers with thick plastic sheeting prevents mold spreading to unaffected areas in a home. When mold growth is covering a space of over 10 square feet, PPE including respirators is required. Once safety precautions are in place, the technicians initiate the mold remediation.

Methods of mold remediation:

Method 1: Remove standing water/repair source

Method 2: Damp wipe topical mold

Method 3: HEPA vacuum finite mold spores

Method 4: Dispose of unsalvageable materials

While it’s tempting to DIY, special expertise and PPE is needed for effective mold and mildew cleanup and removal. Bleach or other retail cleaning prod ucts will stir up and spread mold spores. Today’s bleach contains high levels of water and is banned by the U.S. Environmental Protection Agency for mold cleanup due to its ineffectiveness. The EPA has published a helpful guide book for homeowners about mold cleanup and prevention of mold problems in homes. This booklet, “A Brief Guide to Mold, Moisture and Your Home,” is available on the EPA website (bit.ly/3uIYreU).

Fire damage

According to the National Fire Protection Association, U.S. fire departments respond to 1,000 home fires each day—that’s 42 per hour, costing $228 in damage every second. When a fire tragically strikes your policyholder’s home, or a faulty furnace causes a puffback, policyholders lose more than possessions—they lose peace of mind, and they often turn to you to restore both.

They don’t realize that even after the fire is out, several feet of water could remain in their lower levels, the structure may be unsafe to enter, or that damage to their home and belongings will continue as the smoke continues to burn. Materials that are found in furniture and flooring can be synthetic and when they are burned, it can result in complex chemical reactions. In just a few days, their treasured belongings go from cleanable to unsalvageable.

Whether the soot and smoke are a result of a simple fire creating dusty residue, a complex fire producing an oily residue, or a protein fire in which all the items require detailed surface cleaning, there are four important factors that can increase damage and claim costs:

No. 1: Time. The longer soot or odor sits prior to removal, the more difficult and more expensive it will be to remove.

No. 2: Humidity. It transports odor and causes chemical reactions to continue.

No. 3: Temperature and pressure. The amount of pressure is directly related to the temperature generated by the fire, and pressure-driven smoke will infil trate all porous surfaces. As the fire’s temperature rises every 10 degrees, the air volume doubles, compressing the smoke molecules and increasing the soot into a wider range of surfaces.

No. 4: Materials affected. Generally, smoke residues from fires of natural origin, such as wood or paper, are easier and less costly to clean up. Fires of synthetic (plastic) or protein origin are more difficult and time-consuming. Some at-risk objects are comprise of brass, aluminum, chrome, marble, tile and Beforeporcelain.acompany

can begin smoke mitigation to restore a home, several items need to be addressed. Fire departments will use thousands of gallons of water to extinguish flames, which often leave several inches to several feet of standing water for a restoration company to extract. Doors and windows may be destroyed and gaping holes in walls create a security challenge and need to be boarded up, along with tarping roofs and walls to protect against the elements. Once a structure is deemed safe to enter, belongings and personal items may need to be packed up and relocated, and dry-cleaning arranged, an alternative power source established, and emergency pre-cleaning of carpets and floors (to prevent smoke residue penetrating additional rooms) or treating at-risk surfaces and items with a corrosion inhibitor to protect against further smoke damage.

The insurance professional’s role is vital to establish whether simple smoke mitigation is possible or more extensive cleanup or demolition is needed. This can be determined from the additional questions you ask your policyholder.

First ask, “Is everyone OK?” Items can be replaced—loved ones can’t. When a fire occurs, there may be an investigation or family arrangements that take precedent over beginning the mitigation process.

Your next question should be, “What burned?” Since various household items and materials have complex reactions including acid gases, it’s important to have as many details as possible about the objects affected and determine if an emergency pre-cleaning is needed.

Another good question is: “When did the fire happen?” If it has been several days or weeks, it’s probably beyond the point when mitigation can be accom

plished, and everyone may need to plan for more costly restoration and/ or Toreconstruction.helpdetermine whether hydroxyl, ozone, thermal fogging or air scrub bers are needed, ask: “Is there a strong odor?”

It’s also a good idea to ask: “Did you begin cleaning items yourself?” Homeowners should avoid the temp tation to DIY using retail products as this improper method will set the soot and escalate claim expenses and time.

Set expectations

To prepare your policyholders for the work ahead, it’s helpful to share the five phases of fire and smoke mitigation and restoration:

Phase 1: Emergency precleaning Phase 2: Content cleaning Phase 3: Content inventory, packout and removal

Phase 4: Wall, ceiling and floor cleaning

Phase 5: Deodorization

Once all phases of fire and smoke mitigation and restoration are completed and the technicians have cleaned and removed soot and smoke and restored the property, all content and possessions will be returned to the home.

The lines communicationof

When an unexpected disaster strikes, the more information shared to-andfrom your policyholder will help determine the accurate products and equipment, workforce, timeline, and

critical actions needed, and ensure a prompt response that will reduce the severity of the claim, expenses and stress.

The restoration experts understand that suffering a loss may be a first for your policyholder, and they will guide them through the process to keep them step of the way with advanced realtime

Policyholderstechnology.should

be discour aged from attempts to clean and resolve the issue themselves and from delaying the needed mitigation or remediation services. After all, resto ration companies are available 24/7 to help your clients in their time of need and begin the critical process of restoring their property to pre-loss condition.

Markowski-Roop is the marketing director and certified continuingeducation instructor for Service Master By Mason, with offices located in Connecticut and Rhode Island. For more information, visit www. servicemasterbymason.com. Sorensen is the sales & marketing manager for ServiceMaster Superior Cleaning & Restoration Services Inc., located in Port Chester, N.Y. For more informa tion, visit www.servicemastersci.com.

Policyholders resolve the issue delaying the

As hurricane season continues

At the time of this writing, the 2022 North Atlantic hurricane season scorecard already has recorded three tropical storms with Tropical Storms Alex, Bonnie and Colin. With the peak of the season quickly approaching and with eight hurricane landfalls in the last two seasons, the question on everyone’s mind is: Will the 2022 North Atlantic hurricane season be as impactful and costly as both 2020 and 2021?

Even though 2021 was the third most-active North Atlantic hurricane season on record, in terms of the number of named storms, it will be remembered by insurers for just one event: Hurricane Ida. It looks likely that Ida will be one of the costliest hurricanes on record. Observed insured losses to date are in line with the RMS ® estimated range of between $31 billion and $44 billion. To put this into context, the total loss from Ida alone exceeds the total loss caused by the six hurricanes that made landfall in 2020 in the U.S.

The main meteorological forecast agencies and groups have issued their initial hurricane season forecasts, and RMS analysis of their predictions indicates overall that 2022 is likely to be another above-average hurricane season. If these current forecasts prove right, 2022 would

be a record seventh consecutive above-normal season, extending the current ongoing record of six seasons dating back to 2016.

What does an average hurricane season look like? Using the U.S. National Oceanic and Atmospheric Admin istration 1991-2020 U.S. Climate Normals, an average hurricane season would produce 14 named storms, seven hurricanes, and three major hurricanes.

For the 2022 season, NOAA has forecast 14-21 named storms, of which 6-10 are expected to become hurricanes, and 3-6 of those are forecast to become major hurricanes (Category 3 or stronger). Outlooks from other meteoro logical forecast agencies and groups are broadly in line with the guidance issued by NOAA in calling for an above-average season.

Not all hurricanes make landfall, but long-term statistics indicate that the probability of a hurricane making landfall increases during more active seasons in the U.S. Colorado State University anticipates a 76% probability of at least one major hurricane making land fall in the U.S. this season, while Tropical Storm Risk forecasts two hurricanes and four tropical storms to make landfall over the contiguous U.S. in 2022.

The factors that could drive the North Atlantic’s risk

JAMES COSGROVE Senior modeler, RMS

So, what are the major factors driving hurricane risk for this season? These forecasts of an above-average season reflect the influence of several key seasonal oceanic and meteorological factors, including the El Niño-Southern Oscillation, sea-surface temperatures in the tropical Atlantic, and the Atlantic Multidecadal Oscillation/Variability. Let’s examine each of these factors.

El Niño-Southern Oscillation

A large proportion of the uncertainty associated with seasonal hurricane activity forecasts can be attributed to the uncertainty about which El NiñoSouthern Oscillation phase will materialize during the peak months of the hurricane season.

ENSO is a coupled ocean-atmosphere climate phenomenon characterized by periodic fluctuations in sea-surface temperatures and sea-level pressure gradi ents across the equatorial Pacific Ocean. Over a two- to seven-year period, sea-surface temperatures in the equatorial Pacific transition between anomalously warm (El Niño) and anomalously cool (La Niña) phases. But ENSO’s influence extends far beyond the boundaries of the equatorial Pacific Ocean; it is regarded as the leading mode of climate variability at interannual timescales and recognized as a key influencer of North Atlantic hurricane activity.

Typically, El Niño conditions (anomalously warm sea-surface temperatures over +0.5°C) in the equatorial Pacific Ocean lead to stronger upper-level west erly winds and stronger lower-level easterly trade winds across the Atlantic Basin, enhancing vertical wind shear in the region. Generally, this suppresses hurricane formation, development, and intensification. The troposphere across the tropical Atlantic also is generally more stable during El Niño periods, deterring Conversely,cyclogenesis.duringLaNiña

phases (anomalously cool sea surface temperatures below −0.5°C), hurricane activity in the North Atlantic generally is marked by a reduction in the vertical wind shear and an increase in atmospheric insta bility in the Atlantic Basin, resulting in a more active hurricane season.

For this year’s hurricane season, most forecasts favor cooler La Niña condi tions, and in the absence of influence from any other atmospheric or oceanic conditions and all other factors remaining equal, this generally would result in slightly above-average tropical activity in the North Atlantic Basin.

Atlantic sea-surface temperatures

Generally, there is low skill and high uncertainty in forecasting North Atlantic sea-surface temperatures several months in advance. Both the NOAA Climate Forecasting System and North American Multi-Model Ensemble models are forecasting average-to-above-average departures, with many areas forecast to experience anomalies of between +0.08°C to +1.2°C for the period covering the peak months of the hurricane season between August and October 2022. The average departure across the main development region is anticipated to be +0.17°C. Typically, warmer sea-surface temperatures enhance tropical activity by providing increased energy and moisture to the environment.

Another key factor is the Atlantic Multidecadal Oscillation—or Atlantic Multidecadal Variability as it has been more commonly referred to in recent

literature. It is a mode of natural climate variability that results in 25-to-40-year periods of increased or suppressed hurricane activity in the North Atlantic. In its positive (warm) phase, sea-surface tempera tures in the main development region are anomalously warm, and the tropical Atlantic is anomalously warm compared to the remainder of the global tropics—these conditions are conducive to increased hurricane activity in the basin. The opposite impacts are associated with its nega tive (cool) phase.

The forecast of an above-average sea-surface temperature pattern in the tropical Atlantic and a warmer pattern compared to the remainder of the global tropics is consistent with the ongoing positive (warm) phase of the Atlantic Multidecadal Oscillation/Variability. According to NOAA, the AMO/AMV has been in a positive (warm) phase since 1995, which is representative of a highactivity era.

During warm phases of the AMO/ AMV the frequency of weakcategory storms, such as tropical storms and low-end hurricanes, is not much affected. However, the number of storms that intensify into major hurricanes is noticeably greater than during cool phases—at least twice as many.

Atlantic wind shear

Vertical wind shear, which is defined as a change in wind speed or direc tion with height, is another key atmospheric driver that modulates tropical cyclone activity in the North ChangesAtlantic.

in wind shear in the North Atlantic are strongly governed by which phase of ENSO is prevalent in the equatorial Pacific. During La

Niña phases (anomalously cool), the Atlantic Basin typically experiences weaker vertical wind shear over the Caribbean and main development region, weaker trade winds across the tropics, and increased atmospheric instability. These conditions gener ally are conducive to hurricanes, and typically lead to an above-average number of storms and hurricanes forming during the season.

The latest wind shear forecast for the period between August and October 2022, which demarcates the peak months of the season, indicates that negative vertical wind shear anoma lies are expected across parts of the tropical Atlantic and the Caribbean Sea. In the absence of other factors, this would indicate an increase in tropical activity compared to average.

There are other factors, such as the North Atlantic Oscillation, the Madden-Julian Oscillation, and the Saharan Air Layer, that can influence tropical cyclone activity on a weekly or monthly basis, but are difficult to forecast at seasonal timescales.

forecastsMid-season

Climatologically, tropical cyclone activity in the North Atlantic Basin peaks during a period between midAugust and mid-October. NOAA states that the peak of the hurricane season is on Sept. 10, and this peak almost makes it a “season within a season.” Some 96% of category 3, 4, and 5 hurricane days are within this period.

As useful as the initial season forecasts are, with most of the hurricane activity during this peak, conse quently, some forecasting groups (most notably NOAA, CSU and TSR) issue a revised forecast in early

August. These updated forecasts better reflect the increased certainty in the meteorological and oceanic variables that will govern conditions in the North Atlantic during the peak months of the hurricane season, and generally provide a more valuable outlook than those issued in June.

It pays to remember that even as all these main factors point to an aboveaverage hurricane season, as 2021 shows with Hurricane Ida, it takes just one major event to turn a season.

Based in London, Cosgrove works as a senior modeler within the RMS Event Response team, supporting real-time event response operations and assisting on various event response projects. He holds a bachelor’s degree in Physical Geography and Geology from the University of Southampton and a master’s degree in Applied Meteorology from the University of Reading. RMS is well prepared for the season and will deliver guidance, event footprints, reconstructions, and loss estimates as any potential events unfold. Innovative applications such as RMS ExposureIQ™ on the cloud-native RMS Intelligent Risk Platform assesses the impact of events on their exposures. And, with our renowned RMS HWind real-time hurricane information, clients can analyze the latest ensemble forecasts to see how an event could change over time.

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Clear up misconceptions about hurricane coverage

Considering past catastrophic weather events, insurance agents, property owners, and the general public can benefit from a crash course on insur ance coverages for these types of events. Such storms seem to be more frequent and more severe in their scope of damage and aftermath.

There are some frequently misunderstood or misinterpreted coverage issues or items that only seem to come to light after a catastrophe has occurred. These are areas that can lead to misunderstandings between agents and their clients—which can develop into uncovered losses and errors-and-omissions claims against the agent who handled the insured’s coverage before the loss.

Misunderstood coverage issues

Misunderstanding: Standard policies cover flooding. Property owners (personal/homeowners and commercial/commercial property policy) tend to think their regular property coverage includes damage caused by flooding, such as the type experienced in Texas from the effects of Hurricane Harvey in 2017.

Fact: Most homeowners and commercial property policies sold in the United States specifically exclude coverage for flood damage. Less than 10% of the property owners in Texas who sustained flood damage from Hurricane Harvey had flood coverage on their buildings!

Misunderstanding: Coverage is available after a flood. Many property owners tend to search for flood coverage for their property after an event— such as Hurricane Harvey and Hurricane Irma in 2017—only to be disap pointed that they cannot immediately purchase flood coverage.

Fact: The National Flood Insurance Program has a mandatory 30-day waiting period before coverage will become effective. Note: This does not include a policy scheduled for a mortgage closing transaction. These are applied effective for the closing date.

Misunderstanding: Deductibles. There always is confusion with flood poli cyholders regarding their deductible(s). Depending on what coverage was purchased, there may be two deductibles that will come into play after a loss. For this fact, let’s assume that a homeowner has purchased an NFIP policy and he or she has elected to have both building and contents coverage under the policy.

Fact: Flood coverages are considered separate in regard to application of the deductibles. There would be a deductible for the building structure damage

and a deductible for the contents that are damaged. The deductible amounts are chosen when the appli cation is completed by the insured when he or she applies for coverage.

Misunderstanding: Loss-of-use coverage. Often there is confusion after a policyholder files a claim under an NFIP policy for loss-of-use coverage for personal lines, or busi ness income interruption coverage for commercial lines. These coverages are included under regular personal or commercial policy types and are sometimes mistakenly assumed to be on the flood policy as well.

Fact: The NFIP policy does not offer any type of loss-of-use coverage under the personal (dwelling form) coverage or any business income interruption coverage under the commercial (general property form) coverage forms, respectively.

Misunderstanding: Windstorm coverage. Another CAT coverage matter that often creates issues for insureds with sustained damage from a hurricane event is whether homeowners policies include wind storm coverage within their scope of coverage for an insured’s prop erty. In some coastal areas, many homeowners carriers will exclude windstorm coverage altogether on the policy. This causes the property owner to have to purchase a separate windstorm policy as it will be

required by the mortgage holder and it’s a coverage necessity, especially in coastal areas due to the hurricane-wind exposure. Therefore, a homeowner may either have windstorm coverage included with the homeowners policy or it may be excluded and a separate policy fills the need. In either case, there usually are multiple deductible applications that come into play for coverage for any loss from windstorm damage.

Fact: Most coastal windstorm policies (standalone or included with the home owners coverage) have a regular deductible of a chosen dollar amount (e.g., $500 or $1,000) for non-CAT types of losses, and then they have a sepa rate deductible for CAT types of losses, and the policy language varies with different carriers as to how it will apply. Typically, the CAT deductible is a percentage of the total insurable value of the building and it usually is reserved for named storms that cause the damage, but not always. For example, if the building value is $500,000 and the windstorm named-storm deductible is 5% of TIV, the property owner’s deductible for a named-storm loss would be $25,000. As mentioned above, the policy language may vary from carrier to carrier and from state to state, so your agency staff members and your insureds should know and understand the differing deductibles that may be on home owners or individual windstorm coverages.

Helping to better educate your insureds can enable them to be aware of exposures they might not have known existed, and then they can address those exposures by purchasing the proper types of coverage.

Utica National Insurance Group and Utica National are trade names for Utica Mutual Insurance Company, its affiliates and subsidiaries. Home Office: New Hartford, NY 13413. This information is provided solely as an insurance risk management tool. Utica Mutual Insurance Company and the other member insurance companies of the Utica National Insurance Group (“Utica National”) are not providing legal advice, or any other professional services. Utica National shall have no liability to any person or entity with respect to any loss or damages alleged to have been caused, directly or indirectly, by the use of the information provided. You are encouraged to consult an attorney or other professional for advice on these issues. © 2022 Utica Mutual Insurance Company

FEMA grants, business interruption and more

Tax implications–FEMA disaster grants

Q. My insureds have received Federal Emergency Management Agency disaster assistance because of a severe storm. How will this affect their income (regarding taxes, Social Security or other assistance)?

A. Disaster assistance/grants from either state or federal governments are not treated as income. Since these grants are not considered income, they are not taxable. Therefore, this type of assistance will not have any effect on other assistance programs such as Medicaid, food stamps, Temporary Aid to Needy families, Social Security benefits or taxes.

For more information, see FEMA’s press release on this issue, bit.ly/3Ot8GvZ. —Clare Irvine, Esq.

FEMA’s HO declination requirement for disaster assistance

Q. My clients—whose house suffered only flood damage—are being required to get a declination of coverage from their homeowners insurer in order to collect FEMA disaster assistance. Why is this necessary?

A. The short answer is that FEMA states: “By law, we cannot provide money to individuals or households for losses that are covered by insurance.”

But, that does not mean the existence of insurance will preclude payment of FEMA disaster assistance.

Despite the homeowners having insurance, there may be extraordinary delays in payment by the insurer; limits may have been exhausted; needs may have been unmet by the insurance policies; or local housing may be unavailable.

Given that the homeowners’ property might not get inspected right away, FEMA will need assurance that no portion of the direct damage or loss of use is covered by the homeowners policy. For example, there may be wind damage to the roof and flood damage to the lower part of the house. Before assistance can be offered, the loss first must be denied under the terms of the insurance policies in place on the house.

Obviously, the claim processing and denial of flood damage losses by the homeowners insurer is a gross misuse of adjuster resources—especially when those resources are so scarce in the midst of a catastrophic event. Unfortu nately, until FEMA finds a better way to administer these claims for assis tance, producers will need to cooperate as best they can.

For more information from FEMA on the application for disaster assis tance, see bit.ly/3HTSqla.—Dan Corbin, CPCU, CIC, LUTC

interruptionBusiness from power outage

Q. Because of a storm, my client lost power and he is unable to operate his business until it is restored. Will the Business Income Coverage be applicable to this loss?

A. According to the language of most business owners and commer cial property policies, the failure of power (or any other utility service) being supplied to the insured premises is excluded if the failure occurs off the premises, regardless of cause. The cause might be a flood event, vehicle damage, an earthquake at the generating plant, a fire at the trans former, an explosion at the substa tion or transmission lines downed by Fortunately,wind. a solution exists with the Utility Services–Time Element (BP 04 57 or CP 15 45) endorse ment, which may be offered by the insurer to provide business inter ruption coverage when property of the power supply company has been damaged from a covered cause of loss. An option in these forms can

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—Daniella Kirfeld

provide coverage for loss resulting from damage to overhead transmission lines, as well as other power company property.

However, keep in mind that flood is not a covered cause of loss on the typical BOP or commercial property policy. If the power company suffered damage from wind, this endorsement should respond, but not if the cause was flooding. If coverage for the breakdown of a power company’s equipment is desired, an Equipment Breakdown Policy will be required.—Dan Corbin, CPCU, CIC, LUTC

Seawall damage

Q. During a heavy windstorm, a dock broke loose from another prop erty and crashed into a seawall on our client’s property. The owner of the dock remains unknown. Our insured has a Dwelling Fire (DP 00 03) policy. The insurer has denied a claim for damage to the seawall under General Exclusions, Item 3. Water. The insurer’s claims manager and adjuster both take the position that this damage was an indirect result of tidal water and, therefore, would fall under this exclusion. We cannot see why this exclusion would apply for damage caused by the collision of the dock into the seawall. Doesn’t the exclusion refer to damage caused by the water itself?

A. The General Exclusions language of this policy states that the exclusions apply to “loss resulting directly or indirectly” from any of the excluded causes. The damage to the seawall is clearly an indirect result of one of the excluded causes, i.e., “water damage, meaning ... waves, tidal water ... whether or not driven by wind.” Because waves, driven by wind, broke loose the dock and carried it into your client’s seawall, the company appears on solid ground in denying this claim.—Dan Corbin, CPCU, CIC, LUTC

Fire after lengthy unoccupancy due to storm aftermath

Q. What if my insured’s house is unoccupied due to a storm, and a fire or any other type of loss happens? Will the insured still have coverage for the subsequent loss?

A. Yes, if the loss is a result of a covered peril. However, the adjusters will have to review the loss and see what would be considered new damage and what would be attributable to the prior loss.

Unoccupancy does not impact the validity of the subsequent fire claim.—Dan Corbin, CPCU, CIC, LUTC

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Your one-stop shop

Recipe For E&O Lawsuit

Welcome to cooking with PIA! Today we are going to be preparing the prefect E&O lawsuit. Let’s take a look at the recipe:

• 1 policyholder who thinks they have coverage for a loss, when in fact they do not

• 4 cups celery, chopped

• 1 large gap in insurance coverage

• A dash of one insurance agency that did not provide notice to its client of the potential gap in

Whencoveragemixed together, this is the recipe for one hearty errors-andomissions lawsuit against your agency. Make sure you pay your agency’s E&O deductible!

How does all of this factor into selling your clients flood insurance?

The frequency of coastal flooding has doubled in the past 30 years and the national average precipitation is at historic highs. This creates a situation in which a person living in a 100-year floodplain is twice as likely to experience a flood loss over the course of a 30-year mortgage

than they are to experience a loss due to fire.

There are roughly 126 million households in the U.S. As of 2018, only 5,178,978 were insured by an insurance policy from the National Flood Insurance Program—a decrease from 5,700,235 policies about 10 years ago. So, there are at least 120 million households not covered by flood insurance.

Many homeowners mistakenly believe that they have flood coverage under their homeowners policy. Of course, we know this is not true. So, what does it create? A gap in coverage. And, as we know from our recipe above, when there is a gap in a client’s insurance coverage, that is when an insurance producer gets sued.

Let’s change the recipe a bit:

• 1 policyholder who thinks they have coverage for said loss, when in fact they do not

• 1 insurance agency that sent notices to its clients about the importance of purchasing flood insurance

When mixed together this recipe creates a meaningful touchpoint for agents and their clients—which simultaneously helps the agent educate their clients, helps the agent sell more insurance policies, and provides protection for the agency in the event of an E&O lawsuit.

PIA can add a little flavor to the recipe

To help you educate your clients, PIA Design & Print has floodrelated materials and consumer content that you can personalize for your agency’s individual needs. Or, we can create a marketing piece that is unique to your agency. These materials can include sign-off options—should your clients decline flood insurance—which will offer your agency additional protections against an E&O claim. Additionally, we can print and mail these resources to your client list, which we will keep confidential.

PIA Design & Print offers a collaborative design experience tailored for insurance agencies. Give us a call today.