The Devastation of Flooding How to Identify Properties in Flood Plains and What to Do Before and After A Flood

Transcription

1 The Devastation of Flooding How to Identify Properties in Flood Plains and What to Do Before and After A Flood STEVE BOYER GALLAGHER BASSETT GARY WOOD GALLAGHER BASSETT APPRAISALS NIGEL WILSON DUFF & PHELPS AMPY JIMENEZ ARTHUR J GALLAGHER TIM DRANEY BMS CAT 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS

2 Convocation 2016 Flood Plan Issues

3 FLOODING Flooding is the most common and costly natural disaster in the United States, causing an average of $50 billion in economic losses each year. Most U.S. natural disasters declared by the president involve flooding. In order to improve the development of proper insurance coverage and avoid the risk of underinsuring, appraisal companies are now being asked to provide updated flood risk information ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 3

4 A FLOOD IS... General and temporary condition of partial or complete inundation of 2+ acres or 2+ properties (at least one of which is your property) from: Overflow of inland or tidal waters Unusual and rapid accumulation or runoff of surface waters from any source Mudflow - A river of liquid and flowing mud on the surfaces of normally dry land, as when earth is carried by a current of water Collapse or sinking of land along shore resulting from erosion or undermining caused by waves, or currents of water exceeding anticipated cyclical levels- RAPID erosion 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 4

5 FLOOD ZONE DEFINITIONS Base Flood Elevation (BFE) - The base flood is the 1%-annual-chance flood, commonly called the "hundred year flood." Base Flood Elevation is the water-surface elevation of the base flood. The depth of the base flood can be calculated by subtracting the ground elevation from the BFE. The probability is 1% that rising water will reach BFE height in any year; which compounds over a thirtyyear period to 26% or more. In the flood zone - This term is used by most people to mean the property is in the Special Flood Hazard Area (SFHA), as depicted on the Flood Insurance Rate Map (FIRM). The NFIP flood zones are A and V zones and sometimes have letters or numbers following the A or V (e.g. AE, AH, AO, VE). The officially adopted FIRM is the basis for all flood insurance rating. The community may be using a more restrictive map with broader flood zones and higher flood standards for regulating floodplain development. The community's regulatory map also may include allowances for increased runoff, subsidence, failure of dams and levees, or sea level rise, which are not reflected on the FIRM ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 5

6 FLOOD ZONE DEFINITIONS CONT. Too low- From an insurance-rating standpoint, "too low" means the elevation of the building is lower than the BFE. Building elevation in the A-zones is measured at the top of the lowest floor. Elevation in the V-zones is measured at the bottom of the lowest horizontal structural member of the foundation. Enclosures that are lower than the living space may be considered the "lowest floor" in some circumstances; machinery and equipment located below the living space may raise insurance rates. The following resources may be helpful: NFIP Elevation Certificate with lowest floor diagrams FEMA Technical Bulletin 1-08: Openings in Foundation Walls and Walls of Enclosures From a practical standpoint, "too low" means the risk of flooding is higher, a fact that has been concealed till now by artificially low (subsidized) insurance rating. The lower you are relative to BFE, the higher your risk of flooding. Being too low in the flood zone can cause hardship for the owner if the building is substantially damaged by fire, flood, tornado, earthquake or other event and must be raised before it can be repaired. The cost of raising the building usually is not covered by home owners insurance, but may be offset to some extent by the Increased Cost of Compliance coverage of the NFIP policy ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 6

7 FLOOD ZONE DETERMINATION Can be captured on the buildings appraised. For flood zone determination, the appraisal company will provide the following information: The Zone Community Number Map Panel Number Map Date Letter Map Amendments if any The certified flood zone determinations for each building will be coordinated through a third party vendor. The certified flood zone determination letter is then added the clients COPE spreadsheet. The physical flood zone identifier certificate, is then kept in the clients correspondence file. A certified flood zone determination information provides protection in case of errors that may lead to the wrong flood zone determination letter and loss to the client ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 7

8 FLOOD ZONE DETERMINATION In order to develop the proper flood zone determination, the appraisal company will first obtain the following information: The individual clients building name Building address COPE Data Global Positioning System (GPS) coordinates or longitude/latitude coordinates This data is then providing to a third party vendor to develop the certified flood zone determination letters ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 8

9 Component-Based Appraisal Methodology Buildings - site inspection Review of available as-built plans Measuring of dimensions Determination of primary construction components Opinion of quality of materials and construction Review of building services, interior and exterior finishes, additional features, etc. Photographing of each building Development of replacement cost using local construction cost resources Reporting of values and COPE data by building Evaluation of land improvements (if required) - parking lots, signage, outdoor lighting, etc. We do not recommend trending building costs: High probability of capitalized renovations results in excessive replacement cost Unable to break out original costs by individual building 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 9

10 COPE DATA Underwriters are interested in receiving more than just a valuation; they also want COPE data. Construction (e.g., frame, brick, masonry, masonry veneer, etc.) Occupancy (how the building is being used) Protection (e.g., quality of the responding fire department, adequacy of water pressure and water supply in the community, the presence or absence of smoke alarms, etc.) Exposure (risks of loss posed by neighboring property or the surrounding area, taking into consideration what is located near the property, such as an office building, a subdivision or a fireworks factory) Primary COPE data should be requested as a primary deliverable of all appraisal services 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 10

11 Standard COPE Data Occupancy Address Class of construction Year of construction Square feet of space Number of stories Average story height Wall construction Roof construction Heating system Cooling system Fire alarm Sprinklers Entry alarm GPS coordinates Optional COPE Data Plot plans Flood zone certification Secondary Windstorm COPE Data: (more detailed structural/location specific data elements) Construction quality Roof covering Roof age/condition Roof geometry Roof anchor Roof equipment bracing Basement Appurtenant structures Cladding type Roof sheeting attachment Frame/foundation attachment Ground-level equipment Opening protection Flashing and coping quality Content grade 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 11

12 Convocation 2016 A Flood Is

13 ELIGIBLE BUILDINGS A structure with two or more outside rigid walls and a fully secured roof, that is affixed to a permanent site; FLOOD ZONES Special Flood Hazard Areas (SFHAs): Zones A, A1-A30, AE, AH, AO, A99, AR, V, V1-V30, VE Mandatory purchase applies Non-Special Flood Hazard Aarea (Moderate/Minimal Flood Risks) Zones B, C, X 25-30% claims paid in these zones Insurance optional - highly recommended 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 13

14 WHAT YOUR AGENT SHOULD BE DOING FOR YOU Flood mappings are constantly being re-zoned Annual Flood determination on your schedule of locations Avoid E&O s- Property policies wording : - Deductible: should be Excess of available coverage from NFIP weather purchased or not. - Flood Zone determination: It is hereby agreed and understood that for the purpose of applying the flood deductible, flood sublimit and flood aggregate, the flood zone determination for locations whole or partially located in a Special Flood Hazard (SFHA) as determined by FEMA will be the determination as listed on the SOV at time of binding and will be used for the duration of the policy. With respects to locations added after binding, the flood zone determined at the time of addition will be applicable zone for the duration of the policy term ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 14

15 NFIP What you need in order to receive FEMA reimbursement Who is not covered by FEMA Are you prepared: 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 15

16 FLOODSMART.GOV For customers wanting more information on: Flood Risks Map Changes Coverages Exclusions 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 16

17 Here Comes The Flood Now What Do I Do? 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 17

18 PRE FLOOD PLANNING Remove Contents If Possible Move Contents From Lower Level To Higher Areas Focus On Valuable Papers & Records Focus On Valuable Artifacts Check Sump Pumps To Insure They Are Working Identify Restoration Contractor 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 18

19 HERE IT COMES 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 19

20 SOMETIMES YOU RE LUCKY 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 20

21 AND SOMETIMES YOU RE NOT! 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 21

22 The Flood Has Arrived THE FLOOD HAS ARRIVED Shut Off Main Electrical Switch o Water In The Building o Down Power Lines Shut Off Basement Furnace And Outside Gas Value Evacuating Building o Do Not Walk In Moving Water o Do Not Return Until Water Has Receded 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 22

23 My Home Town Again And Again!! 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 23

24 THE CLEAN UP

25 STEPS TO RECOVERY Recovery is a Process Implement your recovery plan Stabilize the property Limit the Damage (your responsibility) Electrical issues Water leakage/structural issues Security Replacement equipment Contents/documents Determine the scope of restoration and repairs Agree with adjuster, time line for work, initiate activity Document for claim presentation 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 25

26 STEP 1: MITIGATION Emergency services to stabilize and limit damage Remove water, stop source of water, begin muck out of structure, emergency power, security, board up Determine need for drying, desiccant vs room units moisture map, mobilize equipment Pull moisture attackers (carpet, insulation, drywall, celling tiles, particle board) Look for special items, books/records, paper, art work, things that YOU NEED TO PROTECT POC/contractor/adjuster, consultant meetings daily 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 26

27 STEP 2: RESTORATION, REMEDIATION Recovery begins Agree on scope, coverage issues discussed, estimate of costs, time line Drying continues and is monitored, moisture readings are taken, can t dry to fast, microbial issues Controlled demo per the scope, not just cut and go Pull carpet/pad and dispose, discard debris, Sanitize, seal, clean furniture, equipment, Freeze drying of paper items Complete per scope, daily meetings, look at put back and the approach Sign off on work complete 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 27

28 STEP 3: PUT BACK RECONSTRUCTION Final part to reopen structure Scope and estimate of repair Going back the way it was, remodel, coverage Award contract to GC Monitor GC progress, change orders required, update meetings 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 28

29 WRAP UP Implement your contingency recovery plan Daily meetings on large projects is critical Make sure the scope is accurate, changes documented in writing Keep adjuster aware of issues Remodeling may be out of the scope of coverage Document everything Patience, recovery is an arduous task but with the right partners and planning it can go smoothly 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 29

30 Thank You 2016 ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS