Storm & Security

PROTeCT/YOURSELF 2011: RECORD-BREAKING YEAR October Northeast Snow Storm. . . . . . . . . . . . $3+ billion Tropical Storm Lee . . . . . . . . . . . . . . . . . . . . . . $1+ billion Hurricane Irene. . . . . . . . . . . . . . . . . . . . . . . . . $7.2 billion Missouri & Souris Rivers Flooding . . . . . . . . . . . $2 billion Texas Drought & Wildfires . . . . . . . . . . . . . . . . $5.2 billion Mississippi River Flooding . . . . . . . . . . . . . . . . . $5 billion Midwest, Southeast, Plains Severe Storms . $1.25 billion Midwest, Southeast Tornado Outbreak . . . . . . . $8 billion Midwest, Southeast, Plains Sever Storms. . . . . $1 billion 2011 Super Outbreak . . . . . . . . . . . . . . . . . . . . . $9 billion Midwest, Southeast Tornado Outbreak . . . . . $2.5 billion Southeast, Midwest Severe Storms . . . . . . . $2.25 billion Midwest, Southeast Severe Storms . . . . . . . . $2.5 billion Groundhog Day Blizzard . . . . . . . . . . . . . . . . . $3.9 billion continued TORNADOES REPORTED IN THE U.S. 2011 . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . 2008 . . . . . . . . . . . . . . . . . . . . . . . 1,877 1,543 1,282 1,156 more vulnerable to damage than a building with a concrete roof. The second: Aluminum buildings versus steel buildings. Both are fire rated metal and non-combustible, but the effect of wind loss is drastically increased for the aluminum structure. The fourth component was "Number of Stories." A building's height determines its aerodynamic profile when faced with high wind speeds. A single-story building has a higher loss factor from flood than a multi-story building because most flooding occurs in the lower area. High-rise buildings would get a better modeling factor for flood damage, but an increase factor for wind shear and glass destruction. Reconstruction Plan Even with all these factors indicating that property premiums obvious in the previous version of risk modeling is that structures used for retail sales establishments would generate a much higher property loss than an office occupied by an accountant. Occupants that depend on outside structures, such as golf courses and gas stations, would sustain higher losses with less wind speed verses hotel and grocery stores, which would be susceptible to higher losses with an increase in the length of time before repairs begin because of stock contamination from lack of refrigeration and increase moisture content on food stocks. "Year built" was second in importance. The effect of higher building standards is that the newer the building the less suscep- tible it is to high winds. Conversely, structures built prior to 1985 or in areas with weak compliance to building standards tend to have much higher property losses. According to one modeling insider, the most penalized states for inferior building standards compliance were Louisiana, Mississippi and Georgia. The importance of "Construction Type" is best illustrated by two examples of construction type that would cause a difference in premium. The first: Steel and concrete buildings are equally resistant to storms, but a metal deck roof makes a building much 16 will rise, there are three ways to save on next year's premiums. The first is to move inland and away from the tornado belt. The second is to take the time and money to retrofit your structures to the Insurance Institute for Business & Home Safety (IBHS) recommended standards paying particular attention to protecting all of the building openings from high velocity wind gusts. A pre- vious study of building design and damage showed that struc- tures built to the 2004 Florida Building code or better would reduce hurricane losses by 50 percent for residential and 40 percent for commercial. The final way to reduce your premium is to enroll in a recon- struction plan. The plans are tailored to each specific location and the labor and materials needed to repair or replace the structure are reserved at pre-storm prices. This price guarantee, and being familiar with the structure before a storm, allows the reconstruc- tion to begin immediately following a storm. Most of the programs have been modeled after the Insurance Office of America property-plus restoration program, which includes an automatic 10 percent reduction in the buildings losses from a covered peril. Don Leggett has been in the insurance industry for 30 years and is currently the managing partner for Insurance Office of America, the seventh largest privately held insurance broker in North America. STORM&SeCuRITy PROTeCTION / 2012 DIRECTORY & RESOURCE GUIDE

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