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By CHRIS JOHN AMOROSINO, a writer living in Connecticut

It's one of those calls no one wants to get. You're on vacation when you receive a phone call that fire has destroyed the main lodge of your $60 million resort.

That money was well spent. Cheeca's laid-back elegance, prime sport fishing and beautiful vistas have attracted the rich and famous, including six U.S. presidents, for decades. But one cigarette on the last day of 2008 created the fire that led to $38 million of damage.

Cheeca had to return monies to 600 guests. The resort also returned a year's worth of room deposits from future vacationers. Cash flow became a huge problem. Normal reconstruction on this scale--a four-story, 200-room, 60,000-square-foot, four-diamond resort--takes two or three years. The insured couldn't afford to stay closed that long.

At times like these, insurance companies and insurance adjusters make a huge difference. Cheeca was insured by Lloyd's of London and domestic carriers. The policy-nominated claims adjuster, Dennis D. Martin, senior vice-president of William Kramer & Associates based in Tampa, Fla., was on-site at the Cheeca before the fire was extinguished.

"On my first day, I wished I'd brought a rain coat," Martin said. "To put out the fire, the fire department poured more than a million gallons of water into the building. I had sooty black water dripping on my head as I walked through and inspected."

By Monday, Jan. 6, Larry Tilton, one of the nation's top building consultants, arrived. That same day, Kramer & Associates' Jamie Goldfarb checked in to spend five days photographing and documenting all of the damage.

"The scene looked like the Titanic where people had to get up from their table or room and run for their lives," said Martin. "Champagne glasses were half full. Dipped strawberries were half-eaten."

While it's the insurance companies that typically contract the claims adjuster, good claim adjusters know the value of helping the insured.

"We're there working as a team with the owner, with construction crews, with anyone else we need to help the insured get back in business as soon as possible," Martin said. "The insurance companies issue huge checks in claims like this. The best way to help both the insured and the insurer is to get things back up and running well as fast as possible."

Martin sent his first damage assessment report to Lloyd's underwriters on Jan. 8, 2009, requesting a $10 million first payment. Within a week, Lloyd's, the primary insurer, sent the full amount.

Cheeca's property insurance policy, which covered the building, its contents and business-interruption income, required Martin to resolve all issues concerning the building, business and personal property, loss of income, landscaping, demolition, origin of the fire and subrogation. The first step he took was preserving the evidence of the fire. The next order of business was that 600 guests required care.

The Islamorada community stepped up for Cheeca. Immediately after the fire, a nearby restaurant pitched in to wash the dirty dishes from the two commercial kitchens in the destroyed lodge.

"When the fire was raging on New Year's Eve, the adjacent neighbors canceled their display of fireworks in consideration of what one of their neighbors was suffering," Martin said.

Complicating the task was the lack of phones, electricity, fire safety and fire protection in the 200-room complex. Cheeca staff found every guest additional accommodations up and down the Florida Keys on one of the busiest weekends of the year.

Attention then turned to the property damage assessment. Most of the lodge was still standing. The fire had been contained to the roof and top floor.

Johnson, Zia Yasrobi, an engineering advisor for Cheeca, the claim adjusters from Kramer & Associates and other advisors began determining whether the remaining lodge should be rebuilt or replaced.

Carriers RSUI Indemnity Co. and Integon Insurance Co. and the insured hired value appraisers. Their appraisals were consistent with one that Kramer & Associates had conducted two years earlier,

It had to be decided whether the building was a total loss or whether it was repairable. If the repairs were greater than 50 percent of the replacement cost as determined by the appraisals, then the building had to be brought up to current FEMA codes.

There were some disagreements regarding the exact scope of repairs to the building. The village of Islamorada was also involved as to their desires for the project.

Within 38 days of the fire, all parties reached agreement that the most cost effective and safest course was to demolish the water-logged lodge.

But new construction meant meeting FEMA regulations. The resort lodge could not stay on its current level--about five feet above sea level. Guest rooms would have to be elevated by nine feet to meet occupancy requirements.

Fortunately, Cheeca's historical significance enabled Johnson, the owner, to procure conditional uses and variances. The variances helped ensure that Cheeca's main lodge could be built to closely resemble the original structure. The city agreed to allow common areas to remain on the existing grade--five feet above sea level.

The city also approved having Cheeca rebuilt 10 feet higher than the 35-foot city building code restriction to match the original 45-foot height of the lodge. Throughout all the site clearing, property assessment, building approval and other preconstruction steps, the work team swelled to as many as 140 people.

New construction allowed for major improvements like waterproof storm shutters to keep water out of all common areas. The lodge expanded from 60,000 square feet to 93,000. It now features the first concrete modular, pregreened luxury hotel suites in North America.

The speed of the rebuilding pleased all parties. Dennis and two other Kramer claim adjusters worked full-time from January through April to close the case in July. Actual construction began June 23, 2009.

At its height, the building project included some 350 workers. The topping-off party was held September 25, 2009. On Dec. 15, Cheeca reopened as a much-expanded, much-improved lodge.

"We put up a guest-room wing in an unheard-of 90 days, from pilings to topping off and with a quality superior to that of conventional construction," Johnson said.

Claims adjusting can be a bear. The adjusters work long hours, often on sites that look like battlefields. But to Martin, the benefits far outweigh the negatives.

"You get to work closely with many good people and help them rebuild their business and sometimes their lives. It's worth it," Martin said.

May 1, 2010

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