In 1997, Hollywood brought to the screen a film entitled "Twister," an account of how several scientists, fictional of course, attempt to come to grips with the havoc that tornadoes periodically bring to certain sections of the country. The film became notable for its computerized special effects, as colossal, cone-shaped winds swirled around cities and villages, uprooting houses, tossing huge vehicles about, and leaving an unbelievable amount of destruction, not to mention lives lost. Those in the audience who were faint of heart could avert their eyes from some of the more violent moments.
But last May, the people of Oklahoma who were unfortunate enough to be in the path of a tornado that was the worst insured catastrophe in the state's history could not avert their eyes. And the damage that was caused and the lives lost were not the product of Hollywood's nightmarish imagination.
Total insured property losses in the 18 states affected by the storms from May 3 to May 7 will be at least $1.485 billion, according to preliminary estimates by the Property Claim Services (PCS), a unit of the Insurance Services Office. At that level, the disaster will rank as the nation's largest-ever financial loss from a tornado-related catastrophe.
Oklahoma will absorb the brunt of those losses, about $955 million. This sum is more than six times the worst previous insured disaster in Oklahoma history--hail, tornadoes and wind storms that occurred in June 1992--and more than seven times the next worst insured catastrophe in the state--the Oklahoma City bombing in April of 1995.
According to the Federal Emergency Management Agency (FEMA), the May storms caused 41 deaths and 751 injuries, left 2 people missing and affected 7,024 homes. Immediately following the tornado, the federal government went into action. There were 68 federal housing inspectors on the scene; 358 federal personnel in Oklahoma overall; and three ArmeriCorps teams. The Economic Development Administration immediately began working with representatives of the University of Oklahoma and the City of Moore, the town that was hardest hit by the disaster. There were also representatives from the Department of Health and Human Services, the U.S. Army Corps of Engineers Power Planning and Response Team and state community relations teams.
And, as usual in times of catastrophes, the insurance industry was there in full force--insurance company representatives, independent adjusters and insurance agents. They were there to help those most affected by the disaster and to assess potential claims and assist in the payment of initial claims.
Dan Ramsey, chief executive officer of the Oklahoma Association of Insurance Agents, said that the first thing his association did was to construct a press release, establishing itself as a conduit for agents, insurance companies and insureds. "We had spots on television and radio to let insureds and agents know that they should contact us. We wanted to inform them that we would work with carriers to get claims paid. We had a claims contact at the First Baptist Church in Moore to get the claims process going."
Ramsey said that the association also established a fund to assist those most in need as a result of the disaster. "The independent agent's role in times like these is to act as a stabilizer," he said. "People are in shock. They are worried about being made whole and very often they don't understand their insurance coverages and are concerned that they will not be paid. The agent's job is to calm them down, assure them that they will be reimbursed for their insured losses and convince them to take things a step at a time. The first step is to get a roof over their heads."
Larry Johnson, of the Oklahoma-based Universal Insurance Agency, said his firm has two offices--one in Edmond and the other in Moore. The first office is 22 miles north of Moore and suffered no damages. The firm's office in Moore lost its central computer center; but its physical office, just 150 yards north of the center, was not hit. "But for the Grace of God and the bat of an eyelash, we would have been devastated," he said.
"We were able to restore power to our computer center through borrowed generators, and our computers were up and running a day after the tornado. It's times such as these you learn about carriers out there. All insurance companies with interests in the area were right there to assist and pay claims. One carrier in particular, State Auto, by the afternoon following the day of the tornado, had faxed our agency a list by zip code of all those in the area who were insured by them through us. They also included a dec sheet and claims notice form already filled out to facilitate any claims filed."
GAB Robins North America, Inc., a leading independent insurance services provider which offers adjusting, investigation, claims administration, catastrophe and information management services, sent a catastrophe response team of nine specialists to the Oklahoma tornado disaster area right after the disaster, bringing to about 30 the number of adjusters GAB Robins had throughout the state. Spending days that went from 7:00 a.m. to 7:00 p.m., the adjusters worked on behalf of most of the major insurers whose clients included small businesses and large commercial accounts with claims in excess of $1 million. Lap tops and cell phones enabled the team to communicate with the GAB Robins branch office.
"The first step in this type of catastrophe is to assist in cleanup," said Paul Kottler, GAB's branch manager in Oklahoma. "We work with the local authorities, including the police department, to help insureds take care of their immediate needs. Those needs include temporary housing and temporary loans to get things moving again. The thing about a tornado that makes it stand apart from other catastrophes is that, even though if follows its own path so that one side of the street can be affected and the other not, the wind rotates and results in large objects such as automobiles being thrown around. Therefore, there could be damage to property not in the path that was hit by the objects being flung about. In addition, commercial insureds not hit by the tornado might suffer business interruption because their suppliers were in the path. It's going to take quite some time for things to be sorted out," said Kottler.
It may be some time before the devastated areas of Oklahoma return to normal. Johnson of the Universal Insurance Agency said it could take years. "There had already been a good deal of construction going on in this area before the tornado, and so there already was a shortage of building materials and construction workers," said Johnson. "With this situation, the re-building could take some time. I would advise agents in catastrophe-prone areas to make certain that they have catastrophe plans in place to anticipate their insureds' needs. We, just as everyone else in this catastrophe, have contributed funds to assist those most affected. But we have also taken out ads on radio and television to say that we will help in any way in terms of interpretations of coverage on behalf of the insureds. We will provide this service for free. We felt that we had to do something more than just give money. It's our community after all." *
©COPYRIGHT: The Rough Notes Magazine, 1999