When Trouble Comes Naturally

Tips to Prepare and Repair

By Kathy Danforth / Published July 2017

 

From time to time, communities suffer physical assault, whether from weather or other natural phenomena. The more attention that is given in advance, the more likely it is that damage may be aver-ted and recovery will proceed smoothly. While hurricanes set the agenda for most disaster planning and provide important procedures that can apply to other situations, it is still important to consider the details of other potential problems.

Mold

Give It Immediate Attention

Though the costs and health issues have not diminished, mold is an issue that has faded into the background, according to Valerie Hoover with Sentry Management. “People are not paying attention anymore because they’re just thinking of hurricanes,” she observes. “The first thing we try to do is be proactive. Once there is a report of any kind of water or sewer leak, the key is immediate attention to start the drying out process. Some associations require thermostats to be set at a certain temperature to prevent mold growth, which we recommend, especially in communities with seasonal residents.”

Gordon Wolfram with Sentry Management explains, “We’re talking to communities about a lot of little things to prevent mold. You have to keep structures clean. We advise landscape vendors to not mulch up to the sides of buildings and to create slopes so water drains away. Sprinkler heads should be adjusted so they don’t spray the building.”

Wolfram explains, “In one condominium with owners who travel quite a bit, we have plans for maintenance staff to turn off water to water heaters in unoccupied units. That association is paying for replacement of all valves and water supply lines, as well as replacing water heaters based on their age before they fail. The genesis of this was an event with significant damage to adjacent units when a water heater blew. There were mold issues, and even though they had an insurance policy that covered the damage, people were upset and inconvenienced.”

Ralph Klein with Herbie Wiles Insurance advises, “Many policies will exclude coverage for mold. If covered under ISO Form 1030, there is $15,000 of limited coverage, which may occur, for example, as the result of a broken water pipe and subsequent water damage. The property must be insured by a covered cause of loss for the mold damage to be covered. If it occurs as the result of flood, then it will most likely be excluded from coverage, and you must look to the flood policy, which also has its own specific exclusions on when coverage will apply. These exclusions usually include loss due to structural or mechanical defects and failure to maintain the property after a flood recedes.”

Star Herbig with HIG Insurance Group notes, “Mold is excluded under all policies unless there is a specific endorsement. We make sure that our policy holders are aware of that, and they’re offered some type of mold coverage, even if it’s a supplement. The cost varies depending on the value of the property, but can be anywhere from no additional charge to about $2,500.”

With mold remediation, as with other restoration activities, Hoover has found that it is best to establish good relationships with multiple companies in case other customers in the area are affected at the same time. “Before Hurricane Charley we only had one go-to company. When we had the disaster, they had spread themselves so thin that they had to respond to hospitals, schools, etc., before anyone else. Now we are on the preferred list with several companies since we’ve learned not to put all our eggs in one basket. Companies you’ve been using through the years are the ones that will be there for you when there’s a bigger disaster—that we’ve learned!”

Pest Invasion

An Avoidable Problem

Pest invasion is usually an avoidable problem primarily requiring due diligence. “We recommend monthly to quarterly pest control treatment for condominiums and HOA common areas,” reports Wolfram. “If there are palms adjacent to a building, rats can build nests and jump on to the building; so when we have a tree service out, we request that they clean or report nests.”

“The big thing we hear of is bedbugs being brought in, especially in buildings with rental units; but we use pest control companies that can handle that type of pest so we know who to go to,” says Hoover. “In condominiums, termites are treated per unit now, so that’s not as big an ordeal.”

Drought/Temperature Extremes

Reasonableness Is in Order

“When we’re in a drought and there are watering restrictions, boards need to be reasonable about issuing violation letters for grass dying,” Hoover notes. “Also, communities, especially more rural ones, need to cut back dead trees and branches so there is no extra fuel for a fire in dry conditions.”

Though plants may suffer, Klein advises, “The basic property policy excludes coverage for landscaping, as these policies are designed primar-ily to cover structures and the property contained within; however, the policies do allow a small limit of $1,000 or $2,000 to provide for trees or shrubs destroyed by fire or lightning. In some cases a company may endorse a policy to provide additional coverage for landscaping if this is desired.”

“It was an eye-opener when we discovered several years ago that insurance did not cover landscaping, even for hurricanes,” shares Hoover. “We have suggested a reserve fund for landscaping replacement, not just for storm damage but also for eventual loss or drought, so the community can replace plants once we get water again.”

For extreme heat, Wolfram reminds communities, “Make sure the HVAC for common areas has been serviced and the lines flushed so there is no down time. Similarly, for forecasts of cold weather, check the propane if the community uses gas.”

Extreme conditions may precipitate a power outage, which has its own set of challenges regardless of any heat, storms, or general flurry of activity that may be going on. “We had the primary circuit breaker for an entire high-rise fail,” recalls Wolfram. “The breaker costs more than $30,000 and is rare—there were only two available in the country. Within six hours we secured a contractor with a generator truck and fuel tank to run the entire building. It ran 24 hours a day for five days, until we located a breaker and had it installed. The bill for the generator and fuel was $15,000, with $7,000 for the electrician and more than $30,000 for the breaker, which insurance paid after the deductible was met. The owners and board were ecstatic because we saved the refrigerated food and air conditioning.”

Hoover notes, “High-rises above 75 feet are required to have a generator, and those need to be tested routinely.”

Sinkholes

A Slight Identity Change

Sinkholes have undergone a slight identity change, primarily affecting insurance coverage. Klein explains, “Florida law requires the insurer to make available coverage for sinkhole loss for properties located in the state of Florida, subject to the following limited exception: An insurer may non-renew policies, which include sinkhole loss coverage; however, ‘catastrophic ground cover collapse’ must be offered. Catastrophic ground collapse is the result of sudden ground collapse, which is the way most of us think of sinkholes. However, the wording of the original sinkhole coverage forms allowed the courts to expand coverage beyond sudden collapse, and insurance carriers were having to look at any crack in a wall or foundation due to normal ground settling. Now Florida statutes mandate that catastrophic ground cover collapse must be included on every policy, and an insured may purchase sinkhole coverage for an additional premium.”

According to Wolfram, “Renewal policies will include or exclude sinkhole coverage, which the board has to consider. We just point out the policy’s coverage and initiate a conversation about it. We have not had any communities change from what the policy provided, and in some parts of the state sinkhole coverage is very expensive.”

Herbig notes, “Depending on the geo-survey results conducted by carriers, locating sinkhole activity in the area, some companies won’t offer sinkhole coverage within a one to three-mile radius of the risk. However, catastrophic ground collapse coverage is still offered since it’s a statutory requirement.”

Fire

Quick Action Needed

Fire requires possibly the quickest action to safeguard owners. According to Hoover, “Prevention goes back to routine inspections—check that there are no exposed wires or outdated electrical panels, keep walkways and stairwells clear, and work with the fire department on inspections two–four times per year. We work closely with the fire department so they know who we are and how to get in touch with us.”

Wolfram advises, “In condominiums we talk to the residents about the call system and evacuation route to use—when the elevator isn’t working [or is reserved for the fire fighters], the residents must use the stairs. We ensure equipment is inspected, pressure in sprinklers is adequate, and panels are being monitored, so if an event triggers an alarm there will be a short response time. When an alarm is triggered, the air conditioning shuts down so flame and smoke don’t blow through the building, and fire doors close to partition the building.

“The board and management will be calling those residents they haven’t heard from—we want to know if someone is trapped. This is the call system used for hurricanes, as well,” notes Wolfram.

Herbig points out, “If a community has a sprinkler system and a fire panel that is monitored, it is often eligible for an insurance discount.”

Flooding

Precautions Are Location-Specific

Flooding can come with a hurricane or on its own, and precautions are very location-specific. Wolfram comments, “In some cases, a property doesn’t need sandbagging but needs special precautions such as moving furniture from low-lying areas, securing low-level garage storage, or having sump pumps available.”

For many HOAs, drainage is an interrelated system with neighbors in the area. “We learned a lot from the flooding in ‘05,” states Hoover. “Now we clear obstructions and debris from drainage paths two to four times a year, depending on the trees and community layout. Wetland areas that are supposed to take care of extra water have to be cleared of excess growth, keeping exotics treated and cut back. How you take care of your part of the system will affect someone else, and they affect you, so we inspect and Southwest Florida Water Management District inspects the property also.”

“Insurance coverage for flooding is one of those perils that is specifically excluded from standard policies,” Herbig reports. “It has to be purchased from the National Flood Insurance Program, which just had a 10 percent increase in rates, or on the private flood market. Because of the soft market, some insurance companies are offering a flood supplement if you are not in a high-risk flood area. If you are in the ‘x-zone,’ outside the 100-year flood area, you can buy this insurance.”

Klein adds, “The insurance coverage you purchase on your condominium unit for wind and fire is usually far broader than the coverage offered by the federal flood program. For example, the federal program does not provide coverage for loss of use or even for the replacement cost of your contents. We saw hundreds of families in our community displaced by the storm surge of Hurricane Matthew, but the federal flood program did not provide any financial assistance for the cost of relocating for the two or three weeks it took to get their homes repaired.

“For a condominium association, a key issue is the elevator and its equipment,” explains Klein, “because for beachfront condominiums, this equipment could be located below the base flood elevation of your area, which means it would be excluded under the federal flood program. There are now construction firms that can build flood protection for elevator equipment and help an association avoid costly repairs after a flood. This protection can certainly accelerate the recovery time for high-rise condominiums.”

Hurricanes

Preparing for the Inevitable

Flooding is only part of the buffet of damage brought on by a hurricane, with its onslaught of wind and water. Preparing for this Florida threat should be a routine part of everyday life, affecting maintenance, renovations, finances, communication, and more.

Steven J. Mainardi, PE and principal with Delta Engineering, advises, “Associations need to have a plan of action. As part of that, they need to identify shortcomings in their buildings to determine whether a component is old or not compliant with current building codes. Key components are roofing systems, windows, sliding glass doors, garage doors, truss connections, ancillary buildings like carports, and enclosures around structures.” This information should then be used—“Always keep hurricane-proofing in mind for any restoration procedure,” Mainardi states, “and if you are considering roofing repairs, you may want to consider upgrading to code standards, which goes for windows and doors as well.”

Herbig notes an additional benefit: “If all windows and doors have hurricane-resistant coverings, some carriers offer a premium credit of up to 10 percent. A new roof, also, can save up to 10 percent with some companies. In addition, if all openings are covered, each individual unit owner’s policy may be eligible for a discount.”

Every community needs a disaster plan spelling out what needs to be done and who is expected to do it. “The plan should include procedures to identify residents who may need assistance and should clearly assign tasks such as clearing outside furniture, fueling generators, shutting off electricity and water, and leaving the gate open on exit in case of power outage,” states Herbig. “Community and individual plans should cover emergency phone numbers, medications, provisions for pets (which may not be accepted at shelters), water, batteries, and non-perishable food supplies. All insurance policies require the community to mitigate against damage, so you should be prepared for water extraction and boarding up to prevent more damage.”

Ashley Dietz Gray with Campbell Property Management reminds communities of an assignment you don’t want to consider when a storm is already in the news. “Get trees trimmed and greenery pruned now so they don’t create a safety hazard in strong winds.”

Dietz stresses, “Once you have the plan, you must execute it. Ensure that the residents know exactly where to go and what to do in case of an emergency. Post an evacuation route in the hallway, elevator, or clubhouse to make sure everyone is fully aware. Distribute a packet containing contact information for the property manager, the management company, and local police and fire departments. Also include addresses and phone numbers of local shelters and food stores.”

Hoover observes, “Often an association has prepared a plan years ago, but it has not been updated. When reminded, they too often defer it to ‘next year.’  Even though the management company has a plan, individual associations need to keep looking at areas that are vulnerable and update plans in advance for any elderly or handicapped residents who need help, current photos to show what was destroyed, and contacts for communication. You need to document anything you can.”

Mainardi recommends, “Keep records of any improvements and copies of the building plan digitally on file, at multiple locations or on an association website. Back-up emergency power is also important to consider.”

“One lesson we learned last year from Hurricane Matthew was how few people thought past the hurricane to the recovery,” shares Klein. “Choose an evacuation location well in advance, one that will allow you to stay for up to 30 days. Let family members and friends know of your plans in case of a storm, so they know where to look for you when it has passed.

“Hopefully your evacuation location is with family or friends, but if you decide on a hotel, you will want to make sure you choose one well inland as there will be an army of recovery personnel also searching locally for rooms,” Klein adds. “It is not unusual for most rooms to be secured within 100 miles of the damaged area by utility and construction crews.

“Depending on the damage to your community, there could be an extended time required for reconstruction, so it is better to prepare for such a continge-ncy in advance, rather than having to adjust on the fly. Multiple moves while waiting for recovery does not help the emotional state of those closest to you,” Klein points out.

“With the possibility of an extended recovery and evacuation comes the need for additional cash to cover expenses. Local banking facilities may be damaged or closed, so prepare in advance of the storm to have enough cash on hand to cover unexpected expenses during your evacuation,” Klein advises.

“All parties need to know what financial exposure there is with the hurricane deductible,” states Hoover. “That was a big surprise in ’05. A lot of people thought it was a set amount, as it is with a fire, but it is a percent of the value of the building, which could be hundreds of thousands of dollars.”     

Herbig points out, “Usually the hurricane deductible is a percentage of the value of each covered building, not the amount of the loss. However, some pol-icy deductibles may still be a percent of the total insured value.” For a community with multiple buildings, that difference could be a major amount.

Hoover advises, “Be prepared to pay any service provider you will need for immediate services—to remove trees, board up the building, put on a temporary roof, etc. The contractors are going to go first to those who can pay now, not six months down the road. You need cash immediately to get providers in to help you. Whether it’s adding a reserve line item for the deductible, getting a line of credit from a bank, or a combination, that needs to be planned out in advance so you’re not scrambling to pay vendors to get work done. You’ll keep getting put at the bottom of the list because they don’t know when they’ll get paid.”

Wolfram shares, “Hurricane Matthew hit St. Augustine in October 2016, and eight months later we’re just now settling claims for air conditioning units that were compromised.”

“You will want to already have a good relationship with your insurance provider,” Mainardi states. “Ahead of time, an association needs to develop good relationships with local contractors, vendors, an attorney, and an engineer. Having a plan and establishing those relationships is very important.

“After the hurricane, life and damage assessment is conducted first, followed by clearing and securing the site,” says Mainardi. “For safety purposes, the site has to be assessed for unsafe conditions even before the insurance adjuster visits. Many times out-of-state companies come on an emergency basis after a hurricane. We find that they may have no knowledge of Florida building codes. They can clear and secure a property, but then an association should wait until they get design plans and specifications prepared to solicit bids for the restoration.”

“You don’t want to do so much that you jeopardize your insurance claim,” comments Wolfram. “That’s one reason why we do so much photo documentation before and after an event. If we have to move a physical item so it lessens the physical impact of the damage, we have photo evidence.”

“Facilities are mandated by federal, state, and local jurisdictions to be closed if unsafe conditions, dangerous conditions, or substantial structural damage conditions exist,” explains Mainardi. “The Florida Building Code outlines those conditions. Consult a Florida licensed professional engineer to make that determination.”

“We recommend a structural survey and condition assessment immediately after a storm,” says Mainardi. “Many times we find a building looks fine, but a hurricane exerts a lot of positive and negative pressure on a building. This can cause unseen damage; for example, sliding glass doors and windows may flex, causing seals to be breached. Also, there may be higher pressures around buildings, and micro-tornadoes may spawn during a storm.”

According to Mainardi, “A category 1 storm has sustained winds at or above 74 mph and typically causes some damage. With a category 2 storm, winds are above 96 mph and you start getting extensive damage. A category 3 storm has winds of 111 mph and can cause major devastating damage. Category 4 and 5 storms, 130 mph and above, cause catastrophic damage. The most commonly damaged components are roof coverings, sheathing and roof framing, soffits and overhangs, exterior siding, windows and doors, screen enclosures, gutters and downspouts, atriums and skylights, and attachments such as chimneys, antennae, and satellite dishes. We see a lot of damage to EIFS (Exterior Insulation and Finish Systems) buildings, which are basically a metal frame with foam and a finish coat.”

“Reconstruction has to comply with current Florida Building Codes and must also comply with FEMA, EPA, and local fire department requirements, which are sometimes even more stringent,” Mainardi explains. “After design repair specifications and drawings are prepared, contractors can be solicited for major reconstruction work, with a licensed professional engineer serving as construction administrator. After Hurricane Charley, we saw many properties where work had to be redone after the insurance company wrote checks for repair work conducted by out-of-state contractors. Those claims against the contractor were very difficult to pursue because they were out of state.”

For roof repair, Budd Monisera with Rhino Roof points out, “For tile, shingle, or metal roofs, when they are repaired, often they are not the same color, and the roofs look like a checkerboard. Even if the same color is available, the sun has been beating down on the older material for years. We can put on any coating and then it will all be the same color. Additionally, the coating can reduce the roof temperature, include mildewcide and algaecide to avoid the need for pressure washing, waterproof tiles, and provide a breathable barrier.” And in preparation for the next storm event, coatings that resist up to category 5 storms are available.

Wolfram advocates hiring an independent adjuster to deal with insurance claims. “The insurance company’s adjuster is there to minimize what the insurance company pays. I always recommend a second opinion from an independent adjuster. We review the meticulous report on what the company adjuster says about elements damaged, depreciation, replacement costs, and deductibles, and then we negotiate after we compare it to what the independent adjuster says. Sometimes we mention that we may have a supplemental claim for damage discovered later, such as water in an attic.”

Hoover points out, “The insurance company’s adjuster won’t push to give you more than they have to. A third-party adjuster is probably working for a percentage of the claim, so it’s in her interest to identify all needed repairs.”

Disaster preparedness is an ongoing cycle of planning, implementation, communication, maintenance, cultivation of relationships, evaluation, and updating everyone involved regularly. To boards and managers, Hoover advises, “No matter how long you’ve been on the board or had your CAM license, go to a seminar on disaster preparedness whenever you can. You can always learn something new. To me, you can’t ever know too much in order to be prepared.” Preparation may not prevent a disaster, but you may dodge a significant amount of damage and distress.

 

Contributors:

Valerie Hoover and Gordon Wolfram are with Sentry Management. For more information, visit www.sentrymgt.com.

Ralph Klein is with Herbie Wiles Insurance. For more information, visit www.herbiewiles.com.

Star Herbig is owner of HIG Insurance Group. For more information, visit www.callhig.com.

Steven J. Mainardi, PE, is with Delta Engineering and Inspection Inc. For more information, visit www.delta-engineers.com.

Ashley Dietz Gray is with Campbell Property Management. For more information, visit www.campbellpropertymanagement.com.

Budd Monisera is with Rhino Roof Protection Coatings. For more information, visit www.rhinoroofprotection.com.