Interview with Claudia Shukat (Insurance Claims Manager) conducted by Karen G. Befeler-Neuhaus, November 14, 1992, Miami, FL. Hurricane Andrew - water vapor satellite image by METEOSAT 3 August 19, 1992 image also shows upper level low to the north of Andrew .Courtesy National Oceanographic and Atmospheric Adminstration Photo Library:

Befeler-Neuhaus: This is an interview with Claudia Shukat who has been in the insurance business for 15 years. She is currently the claims manager with Nova Southern Insurance. The date is November 25, 1992. It is approximately 9:15 PM and we are doing it at her home. I want to take you back to the days just before the hurricane, before August 24th. When did you first realize that Hurricane Andrew might hit our area?

Shukat: I don’t remember the exact day, but I presume it was a few days prior to that Sunday, probably midweek that we anticipated it would actually hit.

Befeler-Neuhaus: Does your company have a disaster emergency plan? What does it include?

Shukat: Oh, yeah. To a degree. In hindsight there is no way we could have been prepared for the magnitude of this particular occurrence, but we did have a plan as far as having a skeleton staff available as far as myself staying close to the office to be able to get there the day after the storm to start doing what needs to be done. We had limited plans as far as getting telephone service going and since we are tenants in the Federal Reserve Bank building we were fairly certain that our power would be restored as one of the first in the area if it were hit.

Befeler-Neuhaus: Was it?

Shukat: It was. It was restored within a day and a half.

Befeler-Neuhaus: So those are some of the preparations you made in your office?

Shukat:  Those were some of the things we considered. If you want to call them preparations, yes.

Befeler-Neuhaus: Where were you during the actual hurricane?

Shukat: I was close to the office location in a development called Costa del Sol. The company has a little apartment there and my family moved in there Sunday afternoon and we spent the entire storm there. And I was able to walk to the office from there within, it took me ,about 1520 minutes. We figured it would be convenient.

Befeler-Neuhaus: Were you affected personally by the hurricane?

Shukat:  Of course, we all were affected by the hurricane. We, living in Miami Beach we were in an evacuation zone. That’s the first thing. You have to pack up what you think might be most valuable to your future life and leave the place not knowing whether there’ll be anything left. And in our case, we fully expected that there wouldn’t be much left. Due to the fact that we would have the potential of a flood surge and it’s nothing but sheer luck that prevented it from happening in my opinion. And we packed up three cars with the various family members and animals and belongings and moved into the condo on Sunday afternoon. And the tension and the excitement and the nervousness affected everybody.

Befeler-Neuhaus: What were your thoughts or concerns during the actual hurricane related to personally and then also related to your job your upcoming job?

Shukat: Well, during the actual hurricane, my thoughts were not exactly focused on the job. We were, all four of us, sitting on the bathroom floor in the condo and we had a mattress blocking the hallway entrance because the condo has lots of glass areas, sliding glass door and lots of windows facing the golf course and we expected flying debris would probably do some damage. And we might have the storm come in and we spent four and a half hours or however long it took sitting on the floor in the bathroom. Listening to a transistor radio, Bryan Norcross, blow by blow.

Befeler-Neuhaus: And not thinking much about the job.

Shukat: Not really, not during the storm.

Befeler-Neuhaus: When did you begin to realize the impact the hurricane had on our community?

Shukat: Well, it was pretty much an immediate thing. When you looked out the next morning and the streets were utterly blocked by fallen trees. In that little development, there was extensive damage even in the condo itself, although the glass areas had held amazingly. You couldn’t use the car. You couldn’t call anybody. Nothing was working. There was obviously no electricity out there. Everybody was affected immediately. The extent of it wasn’t really known except that we had been listening to the radio and we knew where the worst damage was. That it was way down in Homestead. By virtue of being somewhat removed from Homestead, we pretty much figured out in a hurry that this was a pretty serious and extensive storm.

Befeler-Neuhaus: What were you thinking about in terms of how you were going to have to react?

Shukat: Well, my first concern was getting into the office to see what kind of telephone communication we could get going and I walked over there Monday, and the place was without power, which in that particular location leaves you pretty much out of commission because everything is interior without windows. So you are sitting in the black. We had planned to put in an emergency generator into the building, but that wasn’t going to be completed until 2 weeks later. The timing was absolutely wrong in this case. So I just was over there and nobody was there and I just turned around and walked back and we realized we couldn’t go back to Miami Beach to see what’s doing there because there was road blocks. The police wouldn’t let anybody onto the Beach, so we basically just bided our time. We sat around the condo. We tried to call the various principles of the company. We were not able to reach anybody, really. We had a cellular phone that got me through to Buffalo, then later, this is where the owners are, and I just kept them posted and I went back to the office on Tuesday and we were up and ready. Actually the power came back Monday afternoon late in the office. And Tuesday morning, we had a skeleton staff of like 8 or 9 people there and we had, we brought in 2 phones that we plugged in and a couple of flashlights and we were sitting there because it was still only emergency power. And we were taking claims from some of the insured that we able to get to a telephone and it started immediately. And we had, obviously we had all our supplies, the paper work that you need to take claims and all that, the basic procedures allocating certain people to certain duties. That was all part of our initial preparation. And I contacted a couple of independent adjusters and the first one was there Tuesday afternoon, picking up assignments.

Befeler-Neuhaus: These were people you had contacts with before?

Shukat: We use, we have been using independent over the years and I had previously gotten some commitments from them as to their willingness to take a certain number of claims. Because we are a fairly small company and that always puts you in a danger of getting short changed when something comes down. Of course, the big boys with the big volume get preferential treatment, but we have developed some good relationships with our outside adjusters. And we had one guy who works out of Orlando, has about 4 or 5 people working with him and they all packed up and moved on down. They came in on Wednesday and we put them up in the condo, which at that time we were able to leave because power was back on. No, the power wasn’t on, on the beach, but the curfew had been lifted and we were able to go home at that time.

Befeler-Neuhaus: What was your first day at work like, how would you describe it. . . ?

Shukat: It was unpleasant in every which way, but it was also nervous energy primarily. That’s what motivated and dominated at the time, and people knew that there was going to be a real serious problem. We figured at that point we can help the insureds out there. That was our main intent to try to get somebody out there as soon as possible. And to try to, yeah, at least get the information. Reassure them that we were there, that their claim would be handled and all that, but all those good intentions didn’t last all that long in view of the fact that it became rather apparent, rather quickly that this was going to be a major, major volume problem. First day we got maybe, I think 45 claims, 50 claims maybe and the following couple of days it increased dramatically. I mentioned we are a small company. That translates into maybe 607080 claims a month.

Befeler-Neuhaus: So that’s what you were seeing in one day?

Shukat:  We were seeing more than that in one day once it started rolling and people got to some phones. And, the other problem started with the adjusters coming in and not being able to either get into the area or not being able to find anybody because there weren’t any street signs. The houses were damaged to the point were there were no numbers, no nothing left. People spray painted the insurance companies name on the houses and you hoped that this was really somebody that you insured. And we had a cute little thing happen. One of our insureds from Leisure City found us somehow, knew where the office was. Was there Wednesday morning and said I’m going to sit here until you bring an adjuster in and I’m going to take him with me. I want my claim handled. That was the first one, but it worked out to our advantage because he got our adjuster into the area that he wasn’t going to be able to get into without him. So he probably was the first claim that was handled, paid off in full, taken care of and probably has his house fixed. What’s more he got it fixed at the old prices because he called in people that he had dealt with. He had some connections and before the realization hit the vast majority of people that this was going to be a gold mine. I think that this man is one of the few that would present a realistic picture of not only the damages, but also the way it could have been handled and what it might have cost in the long run. So that was rather an extraordinary experience with this one particular case, but it was one particular case only.

Befeler-Neuhaus: And then after that it got?

Shukat: Well, it got completely out of hand in a fairly short time. First of all, we needed a multitude of outside adjusters. We had people lined up, but they in turn had to bring in storm troopers from various parts of the states, who travel from one disaster area to other.

Befeler-Neuhaus: That’s what a storm trooper is?

Shukat: Yep, that’s what a storm trooper basically is. These are veterans of Hugo and various other disasters and it, they have to coordinate their office and set up their procedures. They realized that there was going to be a need for so many more than they had expected so it took them longer to set up. And while we were giving them assignments by the bag full, nothing was being done on them and we were getting infuriated people on our case from the first week on. People that had been assigned to that firm. Once they got going, it was no problem.

Befeler-Neuhaus: But it was because of the lack of organization or realization?

Shukat: Because it took them longer than anticipated to get their organization established. They also had trouble putting up the adjusters that came. People that had lost their home were frantically looking for places to stay. People that were coming in to help adjust were looking for a place to stay. There wasn’t any place to be had, short of Broward County. And that was one of the problems they had and then these outside adjusters had no clue where anything was ...you are armed with maps and once you get into those areas down there, they didn’t do you a damn bit of good. So the logistics were just incredible. It was, everything was so very complicated and exceeded the immediate capacity of what was there, manpowerwise. It took a while to get going.

Befeler-Neuhaus: Maybe any preparations, since this was such a huge?

Shukat: Well the guy that had been in my office Tuesday after the storm to pick up maybe 10 assignments. I think we gave him another handful a couple of days later and the following week he called and said I cannot take anymore assignments. Because not only did he have more from other companies, but it turned out that these guys could see maybe 3 people a day in the beginning. That’s all a day would hold. You had to fight your way down there into that area to find the people that you were supposed to talk to. To hook up with them, you can’t call them. Appointments were sometimes yes, sometimes no, type of deal, a haphazard adventure type of thing. And the damages were so extensive it took them a huge amount of time to just scope out things as the term goes, to just a feel for what’s involved. And handling 3 or 4 claims a day when they come in a hundred at a time. . . is very slow. And of course, we in the office at that point were faced with throngs of people awaiting us when we got there at 8:30 in the morning. People wanting money, instant advance payments, we got to do this that and the other thing. People really had no clue as to what they needed other than they wanted reassurance of money in their hands. The psychological affect of yes here is a company that is willing to give me moneythat’s what they were there for.

Befeler-Neuhaus: Were you able to give that money right away to certain?

Shukat: Yes, we made arrangements, normally, let me back up, normally, the claim department deals in drafts, meaning that it is an instrument that has to be endorsed by all payees and deposited and then it comes back to us, we verify the proper endorsement and it’s paid. It’s not something you walk up to a teller and cash. And that’s tough enough to explain to people under normal circumstances. So we made arrangements with our bank that they would honor up to $2,500 drafts as checks so people could just go to the bank and get cash. So that was a necessity, but it was favorable. It helped.

Befeler-Neuhaus: Was that worked out before hand?

C: That was something we did day one when we realized that people were just there and we weren’t going to fight a losing battle trying to explain to them that they can’t cash it. Furthermore, we realized that a lot of banks that they deal with were not in existence, a lot of little credit unions, neighborhood places were they use to negotiate. People, yeah, weren’t able to access their bank accounts. They actually needed some cash in hand. This is how we got around it. We called the various branches in the area so they could go there while they were already in the office picking it up. We tried to help as much as we could because it was definitely a desperate situation.

Befeler-Neuhaus: Stepping back for a second, what kind of effect has Hurricane Andrew had on your daily life?

Shukat: My life has be come a 10 to 12 hour work day more or less. And much an allconsuming type of thing. The first 68 weeks it was next to impossible to shut it out of your leisure time even because you are so highstrung and so caught up in it with all the extra work, the extra worry, the extra responsibility, the extra aggravations. You simply can’t shut it off by the time you get home. And I am still working long hours. The mood has changed somewhat. We have become very resigned to the fact that this is not going to have a happy ending and the effect on my personal life is still a daily effect that everybody in the family gets to feel. The company itself, we’ve had people transfer from other departments to the claim department ‘cause we didn’t have the manpower to handle it. We’ve had to bring in an outside adjuster, and adjuster for hire so to speak, who works with us in the office. ‘Cause we can’t hire a permanent person, we have had to do it on a temporary basis. And the outgoing claims payments have pretty well reduced the surplus of the company to zilch. The company is no longer able to write any policies. People have been laid off and sooner or later, probably sooner, rather than later, there won’t be anymore Nova Southern. It’s just a matter of a couple more weeks.

Befeler-Neuhaus: That’s really my next question, how has it changed the company’s plans for the future and your plans for the future?

Shukat: The company ownership was determined to try to kept the company going. We have reinsurance. We have reinsurance available, about 10 million, maybe a little better than 10 million if you add up various other assess layers that come into play. This is a company that normally wrote, that last year wrote about 6 million in premiums so our reinsurance of 10 million appeared to be adequate.

Befeler-Neuhaus: What is the reinsurance?

Shukat:  It’s a catastrophe reinsurance contract that you pay for by seating a portion of the premium you bring in to a conglomerate, Lloyds of London or whomever, who again seat it off to various other carriers in case of a catastrophic occurrence which obviously exceed a company’s ability to pay so they would then come in and pay for it under that contract. And 10 million was considered to be very sufficient, but after the first 23 weeks, I think we realized that we may have a problem. Our initial reserves estimate was at 6 million when we first look at where all the damage was and you look at your policy profile, you put it into zip code areas. We’ve had that done. We did that before the storm, obviously. The worst policy exposure is on home owners’ which was at the time a dwindling portion of our policy portfolio because we had been loosing money in that area anyway and we were trying to get out of the home owners’, but not fast enough. So, whatever home owners’ claims whatever home owner policies we had in force in the Homestead, Leisure City, South Miami area past Kendall was 100% claim incident. Every last policy has a claim. From there on up, there is still an astounding percent of in force policies with claims. I would say it is about 70% of those going up to maybe Flagler Street. And then you have Hialeah, where the storm must have been immensely intense because just about 80% of our policies there I believe have made claims. And there’s certain pockets where I guess it’s the densely populated areas where once one person makes a claim and gets money out of it. It’s contagious. Let’s put it that way. We also had exposure on Miami Beach, which fortunately did not get hit seriously: however, we have managed to get some nasty claims on the Beach. I’ve had claims involving a hotel/motel up on 163rd Street in that area. Cost me $180,000. Looked fine from the street. The ocean side got ripped up. There were so sporadic patches in the storm development where you really had some vicious storms.

Befeler-Neuhaus: And you wouldn’t think that it was so high up?

Shukat: I wouldn’t think it at all. I sent another person out after the first thing came in and they verified it. What am I gonna to do? It’s there, it’s there. You pay for it. That one’s been done and paid for. There have been others on Miami Beach where I couldn’t believe and I sent somebody out and it wasn’t there. We found a couple of those. The Beach had me very concerned because you’re talking about old buildings that have, not all of them, but to a large degree been not been kept up properly. They have been patched and cosmetically kept up. They have been painted over and bandaide remedies have been down to structures such as roofs. I know that to be a fact because I have had lots of claims where ceilings on tenants or guests. And I have had liability claims as a result of that. Now it is pretty well a given that those buildings would have leaks during a hurricane, during a storm. Now if there are a couple of shingles that went off, boom you have a hurricane claim. Suddenly, they are trying to get you to buy them a new roof. It’s that kind of thing that causes tremendous problems for insurance carriers.

Befeler-Neuhaus: That is what you see as bring it down or do you think it’s the real claims?

Shukat: The real claims are the bulk of the claims. I’m not for a minute doubting the validity of damage. What is bringing it down is the amount being charged to repair. The Insurance Department got in on this from a fairly early point when they realized the contractors were adjusting to the supply and demand theory and hiking their prices, doubling their prices. They tried to put out guidelines that’ll say, well, you can, you’re supposed to pay based on these guidelines, pricing guidelines. And those were largely pre-storm guidelines with minor adjustments and the contractors got together and put up a tremendous fight and 3 weeks later the guidelines were revised to reflect what the contractors were charging, which were at least twice what were there before, sometimes more. The longer people are waiting and arguing, the tougher it is to find a contractor, the more they are prone to people just asking anything they want to. Look, you don’t want me to do it, fine . . . They do it to somebody else. So that is what is causing the bulk of the problems and that’s not a figment of my imagination. I’ve spoken to adjusters who themselves were involved in the area that got hit and have extensive damage in their homes and have found it first hand with people they have dealt with over the years are no longer dealing on the same level. They’re trying to get a contract price paid by the company that is way, way inflated and then they are trying to subcontract it out for a great deal less and are trying to line their pockets. And it’s certainly nothing that’s any surprise to anybody who is involved in the process. However, how to stop it is.

Befeler-Neuhaus: And the insurance companies are paying for it?

Shukat: The companies are paying, the companies are trying to resist to a point. The companies are getting tremendous pressure from the Department to settle claims to get them resolved. If it takes bending over backwards and if the insured comes in with an estimate that is substantially higher, needless to say, consumer assistance people will gravitate towards hey this is what the contractor charges so you pay it insurance company. And the adjuster says I have somebody who will do the work for half the price and the insured says, I don’t want that person, I want the other guy to do it. So where does that leave you? We are now going to be headed for a mandatory, but nonbinding mediation process, that the Department forces the companies to go to mediation at the company’s expense to try to work something out, but like I said it is nonbinding, however it just puts extra pressure on everybody. You have to people available to go to the mediation and it’s very, very easy to get a contractor to write an estimate that is twice the amount the adjuster wrote. And that does not mean the damage is twice the amount. It’s that somebody looks at their house and says, “Gee, I’ve got 75,000 insurance on the house that’s what I want.” So the adjuster has 35,000 and the contractor writes 95 to 100,000. This is a bit extreme, but we have gotten close to that.

Befeler-Neuhaus: In light of the hurricane, what does it mean to be the “friendly” community insurance agent or the insurance claims manager?

Shukat: Well, you frequently don’t have a chance to try to be friendly because by the time somebody gets you on the phone they are so frazzled and frustrated that all you do is try to calm them down and find out what can be done to solve the problem. The agent themselves have been in a bad spot themselves. I’m not an agent. I’m working for the company. But the agents are getting demands from their customers because they figure, you put my policy with this company so you do somethin’ about it. I want to get my money now. people don’t understand the multitude of claims automatically brings with it a slow down in claims handling. There’s no way around it. As we sit here, I have had about 1280 claims from the hurricane. We normally, like I said, get 60 or 70 a month. So it’s 2 years worth of claims in 3 months. And this is a company that’s not geared to that. You still have to keep track of the money you spend, you have to keep track of the paper work, you have to report to the Department, to your owners, to everybody, to your reinsurers. You got to know what you are doing. It takes time. I’m not the only one who works until 7:00 or later at night. I have some very dedicated people in the claim department who are working themselves into little pieces of nervous balls. They are just, but they can’t walk away from it no more than I can. This is what we have worked at for years and we are doing it a certain way and we are trying to keep doing it the right way. Civility is something that doesn’t always surface, even though you are trying to not get too carried away. I’m good at that: I’ve usually been able to calm people down. We’ve had some sad, sad scenes come in, come across our daily activity. These grown men sitting in my office crying. That was in the beginning. These things don’t happen now. .

Befeler-Neuhaus: So how do people react to you when they come to your office?

Shukat: When they come to my office to visit me, it is usually bad news. They either are very unhappy that nothing was done or they want their money now and you gotta just try to be sympathetic. People say you’re sitting here you’re house wasn’t damaged you have no understanding for what I’m going through. What kind of an argument is that? You know I’m just sitting there grateful that my house wasn’t damaged, but it is nothing that I did to deserve it. It is nothing that you did to deserve that yours got blown away.

Befeler-Neuhaus: And they are making it something personal ...

Shukat:  And it is being made into not only something personal, but you get the racial factor involved. People are sitting there, well you are only not paying me because I’m black. Now this is such an incredibly ludicrous thing to say, but people are so frustrated ...that everything that they can think of to try to force you into doing something right now so that they get some sort of satisfaction. People are being very unreasonable. I’ve had plenty of people call me later and apologize. And you have got to understand that the stress is horrendous on everybody. And I do have a great deal of sympathy for everybody who was really, really affected. And these people’s lives are a far cry from being back to normal . . . There are some of them that are never going to be rebuilt. Today I finally got my first law suit in as a result, it had nothing to do with the claims handling. It’s a case where we didn’t have an active policy. Policy expired last March. After the storm, they make a claim and we say we don’t have a policy. This involves an insurance agent who was recently…arrested for insurance fraud. Maybe or maybe not ...these people paid his premiums to have a policy, to have coverage, but they don’t…we had the last policy out there so we are the ones being sued for failure to renew the policy…in the present climate of consumer assistance that is being fostered by the Department, the public, especially if it go to the jury, is going to be inclined to bend over backwards to try to, protect that consumer…it was just a matter of time. There’ll be more (suits). There are disputes to amounts of damages in cases where people have no intention of rebuilding their homes and just want to get as much money out of the claim as possible. There are always attorneys willing to represent someone like that ...I get tons of little pickyuny complaints from the Department. I had one occasion when the insured happened to be there and we gave him his payment 2 days later and I said, how came you complained to the Department? He said, “Well, the TV said you should call, if you haven’t been paid yet you should call .” The general public doesn’t understand how insurance works. If they hear, if you’re not happy with how your claim is being handled or you haven’t been compensated fairly, call the Department’s hotline and they do. The Department is another area where people are somewhat frazzled and under stress. It’s just been crazy in every which area.

Befeler-Neuhaus: We have already touched on this one but, how has the hurricane affected your ability to serve the community?

Shukat: It certainly has been a valuable lesson in many, many, many aspects. I’ve learned to handle people better than before. I have learned that there are certain things that you really can’t be prepared for . You have to be able to make adjustments in midstream. You have to be able to recognize when things need to be altered because otherwise you are going to get stuck in the sheer volume of everything and I think we have done an amazingly capable job of keeping things moving. I think we have settled probably 65% of our things by now, which in the context of things in my opinion is pretty darn good. And the only unfortunate thing is that we are running out of money. There isn’t any remedy for that. And unfortunately the State also is running out of money because it has already taken over what 4,5 companies. And the guaranteed fund that backs that particular eventuality has already pretty much run dry. So the State is in the same position that the companies are, the smaller ones.

Befeler-Neuhaus: The next question is when do you foresee your company will get back to “business as usual”?

Shukat:  There won’t be any business as usual once the company it’s been placed into liquidation. That’s the end of the company.

Befeler-Neuhaus: And what happens to the remaining policies?

Shukat: If the company is put into liquidation then the in force policies get a 30 day cancellation from the date the order is entered. The policy holders have to fend for themselves, which of course is going to be next to impossible for home owners ‘cause there aren’t too many companies that are willing to take on home owners that they haven’t insured in the past and that brings us back to the State because the State will then have to offer a 6 months policy JUA type program, a risk pool.

Befeler-Neuhaus: What is a JUA?

Shukat: It’s a joint underwriting program that applies to high risk auto policies, young drivers, people with lots of tickets, that aren’t eligible to be taken on by standard carriers. The State has a special program that is funded by assessing standard carriers certain percentage of premiums and by selling higher priced policies to these people through the pool and it’s going to happen with the home owner policies, too. How long that’s going to be workable, I don’t know. It’s quite, quite apparent that not only will premiums go up, but companies are trying to limit their exposure in Florida. They are doing it already. Big companies, State Farm. They are re-underwriting existing policies and they are looking at everything very carefully. They are limiting the amount of new premium, new policies that can be written in that particular area. Everybody is taking a hit. Small companies are going out of business simply because all their financial surplus that backs up the normal operations in claims paying is going out for hurricane. There is nothing left. You can’t continue operating unless you have a statutory surplus to show that you are able to handle the regular operations and claims.

Befeler-Neuhaus: Is the Department of Insurance going to get involved in the companies that are now restricting their policies in Florida?

Shukat:  Obviously, they can’t red line, which refers to refusing to write people in a certain geographical location. The can’t say we won’t insure anybody in South Dade, but we will write them in the Orlando area or something. That would be red lining. They won’t get away with that, but the companies can use their own discretion and underwriting guides to limit their new business. There is nothing the Department can do to force them to write more business than they are willing to take and again even the big companies are taking hits against their surplus so they have to limit it. It is going to be very difficult for agents in South Florida and probably in all the state to place policies. It’s gonna have long lasting repercussions in the industry down here.

Befeler-Neuhaus: When you say long lasting…?

Shukat: Because this isn’t going to be worked out for years. Our claims are going to be kicking around for a long time. The fact that maybe 1012 companies may go down when it’s all over is going to be affecting everybody. The big companies tightening their underwriting. .Where is the market? Where are you going to place the policies? Where do you find insurance?

Befeler-Neuhaus: People are not going to be able to get insurance?

Shukat: That’s right and that again hurts the agents, who has customers but no markets to place them with.

Befeler-Neuhaus: Do you think new insurance companies are going to pop up?

Shukat: Yeah. Because the demand is there so obviously somebody is going to come in to try to satisfy the demand. I think there may be some people looking very closely at restricting the contracts that are being offered, putting higher deductibles in, more exclusions in. You’ll be paying more money for less coverage is the bottom line… It is just a matter of self preservation. Insurance companies are not as rich as the average consumer thinks they are. As a rule especially in the casualty field, the property casualty field and after what has happened with the South Florida market, it’s going to be a whole different picture…for Florida all together because there is no guarantee that the next one isn’t going to hit Central or North Florida, the Gulf coast or whatever. And it could have been worse. This wasn’t the worst possible storm. That’s the sobering thought. I remember sitting there after it was all over and saying this was Andrew, this was the first storm of the season. It could be another one next month. That was my major concern in the beginning until I was so sucked up in this activity that I wasn’t even thinking about it ...It has been a nightmare really.

Befeler-Neuhaus: Do you see anything positive coming out of the hurricane? You were saying before that you have learned a lot. Anything else positive?

Shukat: Well, I’m sure there are certain area were people have come together and helped each other out and readjusted their values to appreciate what they have and the fact that they survived. I’m sure that’s present in many, many people’s minds, but unfortunately being exposed to the not so pleasant side of it all, I’ve become so cynical about the whole thing. The strong evidence of greed and opportunistic approaches and mefirst attitude was overshadowed the more positive developments. I guess I’ll get that out of my system eventually. It’s difficult right now to see the positive influences. There have been some awfully nice people I have dealt with and I was really, really glad that I was able to help them get through this because that’s what you are there for, that’s what they buy policies for. And if you can do that and work it out and see progress it’s really great. If you get bogged down in arguments that really shouldn’t be even brought up, put a whole different light on it. And if you get anonymous call from somebody saying well my neighbor knocked in their windows and ran the garden hose over the contents of their house so that they could make a claim for new contents, but I won’t give you a statement. Then what do you think? We have had a few of those and people will come to me and say my cousin did this, that or the other thing and they got a new refrigerator and new carpeting and all that and they are saying to me well why don’t you do that and people don’t understand when I say, you just don’t do that. you are supposed to get what you had and not improve your situation. That’s not the principle of insurance. Indemnification, not betterment...

Befeler-Neuhaus: Is there anything else you want to tell me that I haven’t asked about?

Shukat: Not really. I’ve gotten myself into a somewhat gloomy frame of mind, right now. If I think of something up beat, I’ll let you know.

Befeler-Neuhaus: Thank you.

Shukat: You are quite welcome.