Tornado repairs continue 6 months later
Six months after a tornado ripped up neighborhoods in Little Rock, North Little Rock, Sherwood and Jacksonville a good number of residents, insurance agents and construction crews remain tied up in rebuilding.
Meredith Pierce, marketing director of Metro Disaster Specialists in North Little Rock, said this year “was definitely a test.”
“We’ve added multiple new offices here to hire new people that we had to have for this year, but, also, we were planning to anyways,” Pierce said. The company offers full-service recovery work.
Metro Disaster Specialists mostly took on commercial work, cleaning up businesses and large apartment complexes wrecked by the tornado.
Chief Executive Officer Britt Stewart said the company geared up to focus on big projects after noticing catastrophic events like the 2008 Stuttgart and 2014 Vilonia tornadoes, that seem to happen every four years or so.
Riley Hays, who does commercial and residential roofing, said that by the end of September he has completed nearly the same number of projects as he did in all of 2022: 761 versus 785.
“We work all summer, hard, because it’s dry,” he said, acknowledging the year’s “weird weather patterns.”
“Roofers, contractors like me, are going to start benefiting from climate change, and so you’re going to see more,” Hays said.
The tornado left many damaged homes that are still for sale, but owners are mostly in a holding pattern between contractors and insurance. The process is clogged because of the number of damaged properties.
The Federal Emergency Management Agency said it approved 3,591 assistance claims and has disbursed a little over $9.4 million. Claims related to the March 31 tornado closed in July. The Arkansas Division of Emergency Management estimates $92.7 million in infrastructural damage and has disbursed $8.1 million in funding to date. The Small Business Administration, meanwhile, has approved $21 million in home loans and $2.1 million
in business loans.
Metro Disaster Specialists Chief Operating Officer Payton Smith decried out-of-state storm-chasing contractors who blew into town, sold a service to a storm victim and then charged more than many insurance policies would pay.
“Just because you have insurance doesn’t mean they aren’t going to pay for whatever needs to be done,” he said. “You have coverages, and 9.5 people out of 10 don’t understand their insurance coverage. Most residential policies that are out there have limits on what they will will pay to remove a tree, to repair landscaping, to fix fences.
“It’s not that the insurance company is necessarily shorting you,” Smith said, noting the value of premiums, cash values, depreciation and replacement costs. “That’s one frustration from homeowners’ perspective of insurance companies: either somebody came in and ripped them off, or they’re actually getting a fair price and they think their insurance company is not doing them right, but they don’t understand the coverage of the premium they’ve been paying.”
Matt Sexton, an Arkansas Farm Bureau Insurance Company agent in North Little Rock, said he helps clients understand their coverage, can help them with initial claims and liaise between clients and claims adjusters: “We do get to transition into being the first contact when we have these large-scale disasters.”
“People really think that insurance agents are really making out as rates creep up,” he said. “It’s creating a lot of work for us right now, with the high amount of rate volatility. But … we truly care about the people who we have insured, and we want the best for them.”
The April 2022 storm that dropped damaging hail in the River Valley led insurance agents to anticipate rate increases to shore up their reserves, Sexton said. But they didn’t anticipate 2023’s extreme weather, like the late-June storm that caused multiday power failures from North Little Rock to Lonoke. Rates have increased significantly as a high number of claims require indemnifying more customers, which Sexton said is causing volatility within the industry. Lots of policy holders are changing providers because of rate changes.
“It’s kind of a perfect-storm situation,” Sexton said. “In the post-covid era, we’ve had such significant inflation. And the significant inflation translated into higher construction costs and higher repair costs.”
“It’s hitting folks’ pocketbooks,” he said. “When they see an increase in rates, that evokes an emotional response. When there’s a shortage of people to help make the repairs, that evokes an emotional response, because, ‘I can’t get to “whole” again; I can’t get back to where I previously was.’”
Rates may be high for the foreseeable future, he said: “Financially, we have to make responsible decisions in order to honor the promises that we made to indemnify people for their losses.”
Arkansans are not facing rising oceans or direct hurricane hits, but Sexton said local homeowner insurance rates are akin to those for property with coastal exposure.
“The coastal exposure really just pertains to the frequency and severity of loss,” he said. “We’re seeing a higher frequency of significant losses, and we’re just having to do everything that we can to respond to that.”
Stewart, at Metro Disaster Specialists, said some of the Little Rock properties his company is helping were damaged again during the Sept. 7 microburst storm.
“The weather patterns that time of year — if you have a tornado that causes all this damage, you’re bound to have other storms within the months that you’re trying to get stuff done. You’ve got to work around the weather,” he said.
Stewart said half of his customers want the best, most-efficient repairs they can get on things like windows, heating, cooling and air-conditioning systems, and insulation, with their desire or ability to pay for their associated higher costs making the difference.
Hays said he still has roofing work related to the March 31 tornado, ascribing the length of time to permitting and plan-approving from municipal governments and working with insurance companies, which he described in harsh terms.
“Every single customer had to fight for every penny they had, even though they held up their end of the contract: they paid their bills,” Hays said. “Every single one of them is short. Nobody got what they really need, and you had to fight tooth and nail.”