I’ve blogged a little about risk management before but it really hit home (literally) recently for me.
The insurance industry may not have created the concept of risk management (although we probably coined the term), but it’s taken the subject to the point where it affects our lives on a daily basis – whether we know it or not. As a part of its contribution to make the world a safer place, and as a result to improve underwriting results, the insurance industry has always invested in organizations and movements to improve day-to-day safety. For example, no one today would buy an electric appliance or electronic component unless it had the ubiquitous “UL” stamp of approval – where UL stands for Underwriters Laboratory, which was founded in partnership with the National Board of Fire Underwriters, hence the name. The Insurance Institute for Highway Safety has long influenced the safety built into automobiles and road infrastructure. The insurance industry has also had a tremendous influence on building standards and building safety codes. It’s not all about testing, standards or regulations. It’s also about education – educating manufacturers, builders, safety personnel and most importantly, the general public.
Maybe because I’ve been in insurance my entire career, or maybe because I have a risk adverse personality in general, the risk management of personal safety is something I’ve really embraced over the years. Increasingly so since I married and had kids, it has become my job to make sure they grow up safe and sound. My execution is not perfect but my recent experience proved that it was enough to save our house and keep my family safe.
At 1:30 in the morning the smoke alarms throughout the house went off. Jumping out of bed, I raced through the house looking for the cause. At the same time, my wife went gather up the kids – smoke alarms in their room woke them up also. Opening the basement door, smoke started to spill into the kitchen. Grabbing the extinguisher mounted on the wall going down the basement stairs, I crept down the stairs looking for the fire. At the base of the chimney, near the ash cleanout, there were six foot-high flames climbing up the wall and reaching for the ceiling. We had a fire in the fireplace that evening and a hot ember must have fallen down the ash trap and made its way past the cleanout door – which was in need of repair.
As I advanced on the fire I realized I had never actually used a fire extinguisher. In theory I knew how it was supposed to work, but had never actually tried it. I pulled the pin, aimed it at the base of the fire, pulled the handle and...nothing. The extinguisher didn’t work (you can imagine the profanity that followed). I ran up to the second floor, grabbed a second extinguisher mounted to the wall of the laundry room and ran back to the basement, hoping that the fire hadn’t spread further.
Thankfully, this second extinguisher worked. It took me two attempts with the second extinguisher to put the fire out while my wife called the fire department and waited with the kids in the backyard. The smoke and material from the fire extinguisher were making it very hard to breath and I exited through the basement door to clear my lungs.
The fire department doused the burnt area a second time, checked the walls with a thermal imaging camera for any fire that may have made its way into the walls and used a fan to suck the smoke out of the house – thank you Montclair Fire Department.
We were able to sleep in the house last night, even if it was a little smelly. That was only because of fairly poorly executed (but good enough to be successful) personal risk management practices.
What was done right:
- Wired smoke alarms: About 10 years ago, we retrofitted the house with interconnected, hard wired smoke alarms. I can’t emphasize this point strongly enough, this is the one critical piece of risk management that saved our house, if not our lives. With interconnected smoke alarms, when one alarm goes off, all of the alarms in the house go off. When the basement detector went off, the one in my bedroom and the kids’ rooms went off, waking everyone up. If we had standalone smoke alarms, we would have never heard the one in the basement. We would not have known the fire was there until it had engulfed the basement and moved to the first floor, if not further. The house would have been seriously damaged and we may have not been able to safely escape. Best investment in the house ever.
- NOTE: wireless connected smoke alarms are now available. If you live in a house large enough or with multiple floors where you can’t hear a standalone smoke alarm from another part of the house (it has to be loud enough to wake you from a dead sleep), it’s highly advisable to install wireless connected smoke alarms. Similarly to wired smoke alarms, ALL of the alarms will go off if one alarm is triggered. Here’s an example of just one.
- Fire extinguishers: There were fire extinguishers mounted in known parts of the house, readily available. Even though the first extinguisher didn’t work, I knew exactly where the second one was.
- We stayed calm: No one panicked, my wife and kids evacuated together, we knew where everyone was, and no one was doing anything silly like trying to save great granny’s favorite quilt.
What went wrong:
- Fire extinguishers: I hadn’t checked the pressure gauges on the fire extinguishers in a while. The first one that I grabbed didn’t work because it needed to be charged. Fire extinguishers go bad after a while. I like to buy the ones with the pressure gauges so that I can see if it’s still good. What good is the gauge though if you don’t periodically check it? Also, I have a large commercial extinguisher in the basement but it had been moved “out of the way” often enough that I had no idea of where it was and trying to find it by rummaging around in a fire would have been, well, just stupid.
- Fireplace maintenance: If the trap door for the ashes in the main fireplace had been fixed and the clean out door had been repaired, none of this would have happened. This fire was completely preventable.
- Evacuation plan: We’ve talked about evacuation from the house with the kids when they were younger but haven’t addressed it in years. We’ve never practiced. We have a couple of collapsible escape ladders, but they’ve never been out of the box and I am not sure where they are, still.
- Bug out bags: a fairly new concept. We actually just covered this in a disaster prep briefing by our local EMT group at my son’s last Boy Scout meeting. The concept is that everyone in the family should have a backpack with enough clothes, food and essentials (toiletries, medicine, contacts, etc.) to get them through a couple of days. This bug out bag should be readily at hand so that you can literally just grab it on your way running out the door – and not have to hunt for it at the back of a closet. While we didn’t need anything since the fire was put out quickly and we were able to return to the house, it could have been different. For example, when I went to check out the alarm and put out the fire, to be honest, I was barefoot and in my underwear. I had the presence of mind to tell my wife to grab some pants and shoes for me as she grabbed the kids. If I hadn’t, I would have met the firemen on the front lawn in my underwear. Not a pretty sight. If we had bug out bags ready, I would have had a change of clothes ready to go.
Some insurers are great at helping their insureds with risk management. Some are looking at ways to improve their value with the insured by providing value added services such as risk management alerts and tips. The great thing about the tools available to insurers today - such as CRM, analytics and multi-channel tools - it’s fairly easy to create mass customized risk management programs to meet client needs:
- Education – with CRM, client demographics, and analytics insurers can segment clients and push risk information to the insured on a timely basis. This information can take into account where the insured is, what the insured is (individual vs. corporate, manufacturer vs. software vendor, hurricane alley vs. hurricane zone) and tailor the risk management information sent to insured to make it relevant.
- Rehabilitation – leveraging analytics in conjunction with claims systems, insurers can monitor insureds that have less-than-stellar claims histories which would benefit from updated risk management processes or intensive training, helping them to avoid or mitigate future claims.
- Real time response – risk management information can be sent based upon developing regional events. During a hurricane or other natural disaster, what should insureds do to prepare? How do they find out what local resources are available? Insurers have the opportunity to put themselves in the position as a real-time and relevant resource to help insureds out in their time of need.
My family and I were very lucky. I credit it to the risk management information and training I’ve been exposed to over the years. No risk management or safety plans are going to work flawlessly. Parts will fail, as I saw in my own planning. That’s why your plans have to be comprehensive, in order to save the day.
And seriously, look into linking your smoke detectors, wired or wireless ones. They can save your life.