Hardware Retailing

NOV 2017

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

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Upcoming Events HARDWARE RETAILING | November 2017 66 Newsmakers Find more details about these events and others online at TheRedT.com/calendar. To have your event added, contact Kate Klein at kklein@nrha.org. November 12-14 Specialty Tools & Fasteners Distributors Association (STAFDA) Annual Convention & Trade Show Austin, Texas 14-15 Hardlines Conference Niagara Falls, Ontario 14-16 Distribution America & PRO Group Inc. 2018 Executive Planning Conference Marco Island, Florida December 7 North American Retail Hardware Association (NRHA) State of Independents Conference Chicago January 5-7 United Hardware Spring and Summer Buying Market Minneapolis 9-11 Kitchen & Bath Industry Show and NAHB International Builders' Show Orlando, Florida February 10-12 True Value Spring Reunion Washington, D.C. 22-24 Orgill, Inc. Spring Dealer Market Orlando, Florida Upcoming Events Insurance Advice: Preparing for Hurricanes and Floods S cott Reynolds, president and CEO of Member Insurance, answered questions from Hardware Retailing about preparing for and recovering from catastrophic storms, such as the recent hurricanes and related flooding. Member Insurance is the largest provider of insurance to independent hardware stores in the U.S. For more information, visit memberinsurance.com. Hardware Retailing (HR): What should retailers know about flood insurance? Scott Reynolds (SR): The National Flood Insurance Program (NFIP) is the federal program to cover losses due to flood for residential buildings and property and commercial buildings and property. The actuarial rates charged for flood coverage under the NFIP are not sufficient, and it's created a debt of about $25 billion. Our concern is not only with the health of the National Flood Insurance Program, which, after hurricanes Harvey, Irma and even to some extent, Maria, will just be thrown into greater debt. Our concerns also have to do with awareness. Floods don't just happen due to hurricanes. They also happen in all parts of the country. People like to think that if they're not in what's considered to be a high-risk flood zone, then they do not need flood insurance. The fact is that everybody is in a flood zone. There's a far greater likelihood of a flood than there is of a fire, and everybody buys fire insurance. A flood loss can be a damaging loss—perhaps a total loss—to the property, and that can be crippling if it's not covered by insurance. In today's environment, buying both wind and flood, and, in fact, insurance for your fire, too, is still a bargain for the buyer. HR: How can retailers be sure they're adequately insured for wind and flood? SR: They need to know what it's going to take to rebuild. If their building was recently constructed, they're going to know their replacement cost with a great deal of precision. If the building is an older building, it's a good idea to have it appraised. Ultimately, they should be comfortable that, if there's a total loss of the building, their coverage will allow them to rebuild. The same thing is true for the contents. It's a very good idea to have a detailed inventory on hand at all times and have that inventory backed up and off-site so it can be accessed readily. An inventory list, in conjunction with photos after the loss, will make handling the claim so much easier for the insured and the insurance company for a fair outcome. That's definitely true for both private and public insurance. HR: How can retailers keep their insurance costs affordable? SR: The characteristics of the building are going to affect the rate. Things such as newer buildings, superior construction and whether a community participates in the NFIP will affect rates. By community participation, I mean that a community has decided to map where the flood zones are and where they are not. It also will establish the rates for the buildings that are in the flood zone in that community. HR: What else can they do to keep rates affordable? SR: Shop. On flood, the rates will not vary from carrier to carrier. But on the wind exposure, the rates will vary. It's a good idea for them to ask their insurance agent to get options for them. They should make sure to share the characteristics of their building with that agent, because, ultimately, that agent is going to have to present the exposure to an underwriter at an insurance carrier to price their risk for a wind loss. The more information underwriters have, generally, the better they can rate.

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