Riding Out Rita: How Our Agency Made It Through The Storm

AS THE third-generation to own my family's insurance agency, I've lived in hurricane country since birth and have placed wind and flood risks for nearly as long. I used to believe I was a hurricane expert. Last fall, Hurricane Rita taught me otherwise.

Before Rita hit in September 2005, my most recent hurricane encounter was with Andrew, 13 years earlier. Our agency hunkered down and headed out while Andrew, a Category 4 hurricane, the second-most deadly of storms, stewed at sea after devastating Southern Florida. By the time he made landfall in Texas, however, Andrew's windy fury, initially clocked at excesses of 130 mph, had dwindled to speeds in the low hundreds. Andrew, which had become a Category 3 storm, struck the Gulf Coast on August 26, 1992; we were back to business as usual the next day.

After Andrew, our agency developed disaster plans, which we used to prepare for Rita. These procedures are the brainchild of our disaster planning committee. Five years ago, the heads of our three departments chose the committee members, which include an accountant; a life and health representative; two commercial-lines representatives; two personal-lines representatives; Marilyn, our systems coordinator; and E. Jay Sherlock, one of our agency's four principals. The committee prepared for the most severe disaster we considered likely: a Category 2 hurricane. Hurricanes greater than Category 2, they knew, have been rare in the Gulf Coast.

The disaster committee convened on Monday, Sept. 19, as Rita rounded Key West and surged into the Gulf. They decided to book hotel rooms for the agency in preparation for a likely evacuation. Fellow Beaumont evacuees and survivors of Hurricane Katrina, which had crippled New Orleans less than a month earlier, occupied many establishments, however, limiting our options. Members of the Austin-based Combined Agents of America, a cluster to which we belong, offered us shelter during the storm and a place to work after, but we had to decline their generosity; Austin was too far from home. After many telephone calls and Internet searches, the committee finally found a suitable space–one that offered high-speed Internet access, welcomed pets and accommodated kids–in Tyler, 190 miles north of Beaumont.

In the following days, we studied the weather reports. Rita gained speed and size. By Tuesday, her destination was clear: She was headed for Texas.

On Wednesday, the disaster planning committee initiated disaster mode, our agency's cue to prepare for evacuation. Months before the storm, the committee had divided the employees into teams, grouping those of similar physical ability. During disaster mode, these teams of approximately six employees, each led by a disaster planning committee member, carried out their preassigned duties. Some teams wrapped our phones systems, T-files, servers and photocopiers in six-millimeter-thick plastic and stored them in the interior rooms of the building. Other employees protected the remaining equipment in three-millimeter-thick contractor bags. We knew our waterproofing efforts would not save the equipment if the roof collapsed or the Neches River flooded severely, as forecasters predicted it might. We consoled ourselves, however, with the knowledge that our second floor office had a one-floor buffer below and three floors of shelter above.

We secured our agency's electronic information as well. While the rest of the office went to lunch, Marilyn made three tape backups of the management system data and one backup of all other systems. She overnighted two of the management system tapes to AMS, our agency management system vendor. She added the other tapes to the two suitcases of software, backups and manuals she kept at home, a couple of miles from the office. The accounting department packed up checks, bank statements, partnership papers, payroll and tax documents, hotel arrangement information and cash-on-hand reports. They also took charge of the employee files, our agency's lease agreement and licenses. The department bundled this paperwork and electronic data with a folder of special instructions detailing simple accounting procedures. The accountant on the disaster committee and his team assumed responsibility for the documents.

Before we left the office for the day, we reviewed our emergency communications strategy. Every employee received an up-to-date copy of the agency's calling list. Not only did the list include the names and numbers of everyone at the agency, but it also detailed who from the agency would contact an employee–and, in turn, whom the employee should contact–during an emergency. We discussed the possibility that the phone poles would fall, which would force us to use cell phones exclusively to communicate. If that happened, we decided that we would purchase a multiple cell phone contract from an area outside of Beaumont.

At five o'clock Thursday morning, authorities declared Rita the third-most-powerful hurricane on record. Her 175 mph gusts registered well above the Category 5 threshold. An hour later, Jefferson County (our county), called a mandatory evacuation. A direct hit at Port Arthur, just 40 miles south of Beaumont, was imminent.

After exchanging several frantic phone calls, E. Jay Sherlock and Marilyn decided the agency's computer servers would not be sufficiently protected at the office, and would have to come with us to Tyler. Craig, E. Jay's brother and a fellow agency principal, met us at the office and we dismantled the servers. E. Jay put them in his truck for transport to Tyler. We doubted we would have facilities in Tyler to use them but reasoned that with the servers in our possession, we could reinstall them quickly when we returned to Beaumont.

The office split up during the evacuation, and everyone rode out the storm with their families in their respective safe havens. Craig and I retreated to Dallas. One employee sought refuge in an unlikely place: Louisiana. Most, however, stayed in Texas. But wherever we went, progress was slow because of traffic congestion and scarcity of gas. E. Jay's trip to Tyler, for example, normally a three-and-a-half hour drive, took 18 hours.

Rita, which dropped to a Category 3 hurricane, landed on the Texas coast at 2:30 a.m. Saturday, Sept. 24, and pounded Beaumont over the weekend. She destroyed 264 high-voltage lines and 259 substations in Texas. Jefferson County lost all power, sewer capability and water, and was closed off even to residents.

By Monday, Beaumont was still off limits. We needed a presence in the city to service our customers, however, even if we could offer them only a sympathetic ear. Craig and E. Jay, who had returned to Beaumont to survey the damage, consulted with a county judge and the mayor of Beaumont, and were granted passage into the city Monday afternoon.

My brother, agency principal Martin Edwards, joined them in Beaumont while I met up with Marilyn in Tyler to help rally the troops there. She and I phoned two of the agency's personal-lines CSRs, two commercial-lines CSRs and the commercial-lines manager and asked them to come to Tyler.

Then Marilyn dialed up the AMS Disaster Recovery Service. We'd only purchased the service in July on the advice of a local agency that had used it to recover after an office fire. The service, we discovered, also worked wonders in hurricanes. Using the tapes Marilyn sent from Beaumont, AMS uploaded our management system to their Internet server, making our system available online through a password-protected Web site. With any Internet-ready computer, we could access our management system and files, as if we were back in Beaumont.

Now that we had access to our data, we might have been able to use the hotel as an office, if it hadn't been for the hotel's phone system. The hotel's switchboard prevented guests from receiving direct calls. Our customers were calling us on our personal cell phones to report claims. We received hundreds of calls daily. This situation couldn't last.

An agency employee suggested we contact her former place of business, Threlkeld Insurance Agency, a Tyler-based company, for help. Kenneth Threlkeld and his team of insurance professionals offered their assistance and resources without reservation. They put the essential equipment needed to run an insurance agency–a computer, high-speed Internet access, a printer and a fax–at our disposal. The Threlkeld training room became our base of operations. In the room, our new friends set up three phone numbers from their T1 phone line for our use. This godsend, though appreciated, proved more problematic than we anticipated.

At first the new setup seemed to work. We called Southwestern Bell and enrolled in their disaster routing service, which, for a fee, allowed us to route the agency's Beaumont number through our three Threlkeld lines. After establishing the service, however, we noticed that our call volume drastically decreased, compared with what it had been at the hotel. A little investigation soon revealed the problem. Call accounting, the service that tracks long-distance usage on our agency's phones, had disabled our new call center. We called our long-distance provider to disconnect the service and vowed that the next time a hurricane threatened our agency, we'd suspend all extraneous phone services before we evacuated town.

With our phones system back in order, a Beaumont phone book that our personal-lines manager had packed among her supplies became our most valued possession. With it, we alerted Beaumont-area radio and television stations of our Tyler location and how our clients could reach it. Many media outlets that were put out of service by the storm still had Internet access and posted breaking news on their Web sites and blogs. On the major media sites, we were one of only two independent insurance agencies listed. Encouraged by our progress, we affectionately dubbed our temporary headquarters J.S. Edwards and Sherlock North.

Back in Beaumont, at J.S. Edwards and Sherlock South, reliable phone service and Internet access were nonexistent. We needed a physical presence at Ground Zero to reach our most desperate customers. But temperatures were in the upper 90s, too hot to set up shop in our glass-insulated, air-condition-free office building.

Erecting a tent was Craig's idea. He purchased the kind used for outdoor weddings, and pitched it in front of our Beaumont location. From Threl-keld, we contacted our employees, using the emergency numbers they provided prior to evacuation. We asked that everyone who was not working in Tyler take three half-day shifts staffing the south “office.”

We had no provisions in Beaumont, so volunteers had to supply their own water and food, bring sleeping bags and, of course, arrange transportation. They bunked in sleep-away camp style at Craig and E. Jay's homes, where generators pumped power to air conditioner window units. Our employees made this sacrifice without complaint, without hesitation, and with complete understanding and willingness to help.

We had two staffed offices but no communication between them. To remedy this, we purchased a two-cell-phone package in Tyler and shipped one of the phones to Beaumont. Now Beaumont South was ready for clients.

The Beaumont employees posted signs reading “J.S. Edwards & Sherlock Claims Office” around town to alert locals of our presence. But our best advertisement was our location. Our tent, positioned within feet of Interstate I-10, Beaumont's main drag, drew in customers and the curious alike. Our presence calmed many residents, who had presumed their city, still off limits to evacuees and outsiders, was a ghost town. We swapped stories, answered questions, consoled clients, called in claims to J.S. Edwards and Sherlock North, and, in the process, imparted a sense of normalcy to our frazzled community.

At the north office, however, daily operations were far from normal. Our employees, who were used to taking claims under relaxed circumstances, struggled during the 12-hour, stress-filled days following the hurricane. Two employees answered the hundreds of calls coming in daily. The rest of us scrambled to get the claims reported. In the confusion, our representatives often neglected to obtain all of the customer's essential information: name, risk location, specific damage to the risk and a working phone number.

Pinning down a customer's working phone number was particularly difficult. When we operated out of our Beaumont office, our employees could assume that a client's home phone number would be on file. After the hurricane, however, these numbers were no longer useful, since many clients had evacuated their homes. To service our customers during this emergency, our employees had to learn to collect extensive details about the risk and record complete contact information.

Our customers also unwittingly complicated the claims process. Some called the carriers directly to report their claim, bypassing our agency altogether. These anxious customers didn't understand that many of our carriers operate on an international level. They don't have access to our insureds' files and can't process claims. Only our agency can do that for our customers. Unfortunately, if the insureds didn't contact us, we had no idea that they needed our assistance.

Rita had the carriers reeling as well. We quickly discovered that not every carrier is prepared to handle a disaster. The carriers that had learned their lesson from Katrina stationed truckloads of supplies in the parking lot of the Beaumont Wal-Mart. Some carriers sent adjusters to survey the area. A few did nothing.

About two weeks after Rita struck, things were returning to normal. By then, our office had been out of power for 16 days. We regained our offices and our computer systems on Oct. 10, but since the electricity supply was unstable, we still used the AMS disaster recovery version of our database. To use this Web-based database, however, we needed high-speed Internet access, which we didn't get until Oct. 12. And even when we did get it, it was up and down for another week.

In the months following Rita, we analyzed our response to the disaster. We congratulated ourselves for just having a disaster plan. Many agencies did not. But our disaster plan could have been better. Our original disaster plan didn't account for several contingencies that we encountered. We never considered that when a hurricane shuts down our office, the agency may have to house, feed and pay its employees. To prepare for the next hurricane, we've set aside money for such expenses and devised a payroll protocol that our accountants can implement outside of Beaumont.

We've added claims-handling-procedure reviews to our regular disaster preparation meetings and increased our communication with carriers. The next time a hurricane approaches, we'll call our insurers to determine their disaster readiness. With a better idea of our carriers' preparation, we will be able to accurately answer our insureds' questions in an emergency, and offer a realistic claims-processing timetable. In the early days of Rita, we told customers to expect a carrier to call in five to seven days. The actual timeframe, however, was two weeks–if you were lucky.

No plan, however, can account for every eventuality. We've decided the best way to prepare for stormy skies is to develop rapport with our local carriers and fellow insurance agencies during fair weather. Our claims representatives at our carriers now know where our agency will be in an emergency and how to contact us. We offered our local adjusters keys to our offices and building, as well as access to our system, phones and equipment. (We even gave them chocolate!)

Threlkeld, the Tyler agency that shared its office with us, is our staunchest ally. We often confer with them, fellow members of our cluster and other nearby agencies. And I can't forget my own dedicated staff. Before Rita, I didn't believe that a group as hardworking or committed to service existed, but I now understand that such people are plentiful in the insurance world and eager to lend a hand to those who need it.