Pools help counties get back to 'normal'

Hurricane Irene:

• Before, during and after: The Beaufort County story
• Mutual Aid System offers a helping hand to counties

By Michael Kelly
Risk Management Director

Irene was the ninth named storm of 2011 and the first one to make landfall in the United States since Hurricane Ike in 2008. Irene was closely followed by Hurricane Katia, which reached Category 4, and Hurricane Maria, a Category 1 storm – luckily both stayed away from the North Carolina coastline.

Since Hurricane Irene ripped through Eastern North Carolina, counties and entities have been well into the process of picking up the pieces to begin anew. As I stated in previous columns, regardless of the possibility of being put back into a similar or even identical financial position as you were before the storm, there is little or nothing that can be done to prevent the disruptive process of having to deal with the mess (or the fun with FEMA).

Statistically, Hurricane Irene was recorded as a Category 1 strength storm at the time of impact on the Outer Banks (7:30 a.m. on Saturday, Aug. 27). According to the National Hurricane Center, the eye passed over Cape Lookout in Carteret County with sustained winds of approximately 100 mph. The damage Irene caused could have been significantly worse, of course, but to those located in the middle of its path, it seemed like it took Irene forever to pass.

During the week after the storm I traveled to the majority of the northeastern coastal counties to generally survey the damage, meet with county staff and their risk managers.

While there were pockets of serious damage caused by tornados spawned during the storm – such as along N.C. Highway 64 east of Columbia in Tyrrell County – the largest single building damage sustained was in Trenton, the Jones County seat. A civic center that was being used as a shelter during the storm had a good portion of its standing-seam metal roof lifted off, exposing the people inside to the elements. I received a text message during the storm from Myra Norman, operations manager at Sedgwick CMS – our third-party claims administrator – stating that a contracting crew had already been dispatched to help provide temporary cover over the damaged section of the roof and that the people inside were safely moved to another shelter at a nearby school. Later it was determined that the initial building damage estimate was more than $700,000, with total county damage estimated at more than $1 million.

Estimates were still being revised, but at the time of this writing there were approximately 210 claims for all NCACC Liability and Property Pool locations with total damage estimates in the $2.5 million to $2.75 million range. The top 5 Pool member ranking for projected total damage are:

1. Jones County with 11 claims reported at a reserve total of $1,051,000.
2. Craven County with 23 claims reported at a reserve total of $250,000.
3. Onslow County with 14 claims reported at a reserve total of $219,000.
4. Washington County with 22 claims reported at a reserve total of $105,700.
5. Currituck County with 33 claims reported at a reserve total of $92,500.

As county buildings are typically built to superior construction standards, they normally will fare better than other commercial buildings and dwellings. A general indicator that is easy to notice as to the level of sustained wind from a hurricane can be assessed in simply observing the percentage of composition-type shingles missing from homes. Aside from the tornado damaged sections, I noted that 5 percent to 10 percent of the shingles were missing in the hardest-hit areas, which would typically indicate an endorsement to the recorded level of sustained winds in the 80-100 mph range. Rainfall varied greatly; some locations received more than 15 inches, and flooding occurred in Beaufort, Pamlico, Tyrrell and Washington counties.

Overall when you consider the size of this storm and the time it took to traverse through the coastal areas, we are quite lucky that Irene was only a Category 1 storm. The hurricane season runs from June 1 to Nov. 30, so although we still have a ways to go, I am crossing my fingers we are done for this year.

Time will tell what a storm of this magnitude – coupled with the tornados sustained in April – will have in the way of an impact on the reinsurance pricing as well as the "for-profit" insurance carrier's appetite for risk in the coming renewal season.

However, know that the NCACC Liability & Property Pool had in fact already put aside reserves specifically for such named storms several years ago. In addition, this Pool is in the strongest and most financially secure position it has been in since its inception 25 years ago. Accordingly, I am stating as a fact, we will still be here next year and stand ready to continue handling your risk management needs.

NCACC Risk Management Director Michael Kelly writes a regular column on risk management for CountyLines. With more than 33 years of risk management/insurance experience, he holds the Associate in Risk Management for Public Entities, Certified Risk Manager and Certified Insurance Counselor professional designations. He can be reached at michael.kelly@ncacc.org or (919) 719-1124. Archived versions of the column can be found online at www.ncacc.org/managingyourrisk.html.