No, we are not fortune tellers, but we are realists. Recent events in Paris, California and elsewhere show that terrorism is on the rise. Maybe our communities will not be a terrorist target, but we are targets of accidents and natural disasters that produce property damage and even loss of life. It’s like estate planning; we all know we should do it, but we don’t want to face the possibilities. If you are smart and brave, you will do just that.
Our communities suffer losses from frozen pipes, wind, flooding, sinkholes, earthquakes, fires and countless other root causes, including root failures that allow trees to fall. Some of these are minor or major inconveniences while others are even newsworthy. Disaster planning addresses response and management of minor disasters as well as those that make the 6:00 news.
Community disasters affect common property, private property and people. Most condominiums are covered for the common property, but many residents are not insured for their private or personal property. Some don’t even know they need insurance. People are the most difficult part of the plan. Some disasters will merely inconvenience them or cost them money, while others may displace them for many months. When they learn about this—as they undoubtedly will not do until their turn comes—they will be in shock, dazed and clueless about the next step. As leaders, this is our chance to shine.
MMI teaches a full three-hour course on disaster planning, so we cannot cover it all in a short blog post, but some of the essential elements of the plan include:
- Making sure you have adequate insurance for all types of disasters on your common property.
- Making sure your owners and their tenants know that they need insurance. An interesting fact not know by many is that the master policy holder on a condominium cannot come after (subrogate against) a unit owner to recover their losses, even if the owner caused the loss. But, tenants are not so protected. Insurance companies can and do subrogate against tenants, so they need liability insurance to cover that threat.
- Anticipate the various disasters and their impact on the property and the people. Think through the scenarios. What would you, their board member or manager, say to them during this crisis? How would you address their losses and their situation? How would you advise them?
- Finally, the news media may show up and they may stay for hours interviewing displaced residents, emergency responders and you. Will you be prepared to give a statement expressing sorrow, not apology, for the losses? Regret for the suffering and a positive message about how your board and management have prepared for just such an event and are ready to jump into action as soon as the emergency responders leave? That would certainly sound better than “I’m sorry there was a fire. I don’t know what will become of our displaced residents. I hope we have insurance. I don’t really know what will happen next.”
Preparing for disaster is not a small task. We see about 7% to 10% of communities each year experience some sort of incident that we could classify as a disaster. Hopefully, your efforts will prove a waste of time, but if your turn comes, you will be eternally grateful for the time you spent getting prepared.