Hours after the Navy destroyer USS Cole was bombed in Yemen onOct. 12, 2000, killing 17 American sailors and injuring 39, thefamilies of members of Navy Federal Credit Union likely didn't knowthat much more was going on behind the scenes on their behalf.

Mike Retelle, CUNA Mutual Group claims manager and disaster teamleader, recalled how some of the sailors killed or injured may havehad insurance policies running through the $49 billion Navy Federalin Vienna, Va. It turned out that some did.

“That same day, we contacted life and disability,” Retelle said.“As soon as we identified who was dead or injured, we handled theclaims even before the families started notifying us.”

Retelle said it's this same proactive approach that CUNA Mutualtakes when it comes to handling natural disasters such as tornadoesand, recently, Hurricane Isaac as well as man-made ones like theSept. 11 bombings and the attack on the USS Cole.

As Isaac churned in the Atlantic Ocean, Retelle and his teamkept a close eye on the handful of possible tracks the category 1hurricane could take. When it looked like Miami and Key West wouldbe the focal points, CUNA Mutual started contacting credit unionsthat were in the storm's path to remind them to hunker down and toimmediately let the disaster team know of any early wind or raindamage, no matter how minor. Phone numbers and emergency procedureswere given out.

“Severity is in the mind of the beholder,” Retelle said. “Wewant them to contact us early because if power goes down, thesystem can be gridlocked.”

As Isaac moved through the Gulf toward Louisiana, the disasterteam and a field force dispatched ahead of the storm to find outwhich credit unions were likely to be impacted. As it turned out,many of the state's credit unions are not located along thecoastline. Still, there were two credit unions that sustained majorflood losses to their branches and seven experienced damages to their interiors, roofing, siding, windows and signs,according to CUNA Mutual.

Retelle said that during hurricane season, his team of aboutroughly 30 managers from several divisions will start watching thecoast of Africa where many of the storms form. Isaac was not amajor storm compared to others, but because New Orleans is 80%underwater, flood losses will add on to the estimated $500 millionto $2 billion in damages to homes and other properties. The stormalso took its time moving across the region before heading up intoArkansas, where tornadoes were among the threats.

As of Sept. 5, CUNA Mutual had received an estimated $250,000 inclaims, Retelle said. A little over 6,000 credit unions haveproperty and casualty coverage with the company. While flooddamages fall under federal guidelines, CUNA Mutual can assistpolicyholders with the processing of those claims, he added. 

Indeed, Isaac's floods will be the majority of claims filedthrough the National Flood Insurance Program, said Blythe Lamonica,chief communications officer for the Louisiana Gulf State InsuranceInformation Center in Baton Rouge. At press time, there were stillareas of the state that were not accessible due to flood waters.

Lamonica said many of the insurers in Louisiana have awindstorm, named-storm or hurricane deductible on homeowners'policies. These deductibles can range from 2% to 5% of the totalinsured value of the property. Louisiana is unique in that thisdeductible is applied on an annual basis, she noted, adding ahomeowner who sustained damage from Isaac will likely have to paythis deductible. Louisiana Commissioner of Insurance Jim Donelonestimated that Louisiana Citizens Property Insurance Corp.,described by Lamonica as the state's insurer of last resort, willpay claims from Isaac totaling less than $75 million. The insurerhas a 2% hurricane deductible on its policies, except forproperties below the Intracoastal Waterway, which have at least a5% deductible.

“The claims reporting process has been moving along with noreports of problems from companies,” Lamonica said. “Many of theinsurers were in place, ready with mobile units, prior to HurricaneIsaac making landfall. Once it was safe to move into the impactedareas, the companies partnered with local media and other agenciesto help spread the word about the mobile sites across thestate.”

Back in Florida, as officials with the Republican National Convention in Tampa, Fla., rearranged theschedule of events, Quorum Insurance LLC was also watching Isaac'strack. The Tampa-based agency represents several regional andnational insurance companies and serves nine credit unions.

“Fortunately for the Tampa Bay area, Isaac was virtually anonissue,” said Kim Brubaker, vice president and chief operatingofficer for Quorum. “We had some heavy rains and wind, but nosevere damage in or around the area where we're headquartered. Idid not see an increase in new claims from our major propertyinsurance carriers.”

Quorum does not adjust or administer claims but acts asadvocates for its credit union member clients should an issue ariseas they are working through the claims process, Brubaker said. Allof the insurance agency's current credit union partners areheadquartered in Florida, but one has a few branches in Alabama.Quorum is also licensed to do business in Georgia, North Carolina,South Carolina and Tennessee.

“Hurricanes are a constant and major challenge for insuranceagencies and companies doing business in Florida,” Brubaker said.“The climate has still not completely recovered devastation ofHurricane Andrew 20 years ago. Each new year, a new hurricaneseason is a reminder of what could happen again to residents in ourstate.”

Because of those threats each year, Quorum strives to educateand advise members on the things to look and ask for to make surethey are adequately protected, Brubaker said. The firm has anannual campaign each spring to promote the benefits of floodinsurance to its clients. Quorum's long range plan is to be theinsurance broker of choice for credit unions across thecountry.

Retelle said CUNA Mutual also takes a proactive approach byconducting webinars, holding risk management training sessions atleagues and helping credit unions plan for what-if scenarios. Forinstance, if a key person on staff is incognito after a storm, whatwould be the next line of instructions. Or, what happens if thecredit union makes it through a hurricane but its sponsor companysustains heavy damages.

When checking on credit union in advance of a major storm,Retelle said he's noticed a kindred theme.

“Credit unions are notorious for saying, 'Don't worry about mebut you might want to check on the guys next door.'”