Section Three

Catastrophe Adjuster’s Guide

Introduction

 A disaster may occur anywhere in America.  It may take many forms: hurricane, tornado, flood, conflagration, blizzard, or earthquake.  Whatever the type of disaster, it will affect insurance policyholders who will file claims for indemnification.  They will expect, and will have the right to, fast, courteous, complete, and accurate claims adjustment.

 You, as a catastrophe adjuster, will play a key role in meeting and fulfilling those policyholder expectations.  Your professional skills will be used to the maximum extent during the recovery process and the rebuilding period.  How well you do your job will be closely watched by the policyholders, the insurance regulators, and your company.  There is little room for error in today’s catastrophe adjusting environment.

 The job of a catastrophe adjuster is vitally important to the business of insurance.  Properly handled, a catastrophe claim can demonstrate to the policyholders the true value of insurance.  You are one of two insurance industry contact people the policyholder will probably ever meet.  The other person is the agent.  A great deal depends on your work habits, appearance, personality, competence, and professional ability.  The Catastrophe Adjuster’s Guide is designed to help you deliver first class service to the ultimate consumer of insurance, the policyholder.

Preparing for a Catastrophe

What to Expect

      The catastrophe can be divided into two general categories:

–        The physical environment of the disaster; and

–        The psychological state of the policyholder. 

Both are extremely important for the catastrophe adjuster to understand and appreciate.

      The physical environment will present a professional technical challenge to the adjuster.  The damages to property will be many and varied, requiring skill and ingenuity in many instances to estimate the scope of the loss and negotiate a settlement.  The greatest challenge to the adjuster will come in determining if structures, which haven’t been destroyed in the disaster, may be repaired.  Assessment of damage is a skill which a catastrophe adjuster can polish to a high sheen of proficiency during catastrophe operations.

      Your physical environment is going to be changed also.  Work hours and procedures will not be routine until the crisis has passed.  Residential and office conditions may be primitive during the early stages of a catastrophe claim operation.  Communication systems may have been so disrupted that you will have some difficulty in establishing voice  and data communications early in the operation.  You may even have to rely on pencil and paper once again in those early hours.

      The psychological state of the policyholder will require your patience following a disaster.  Their first concern will be for the safety and welfare of their immediate and extended family.  The secondary concern, early in the catastrophe, will be for the restoration of their home and possessions.  You will play a vital role in helping assure the survivors’ safety and welfare is of concern and is addressed by the policy in the form of additional living expenses.  Dealing with the survivors’ secondary concern of reorganizing their life and rebuilding their home or business will be no less challenging.

      Depending on the severity of the catastrophe, your psychological state can also be affected.  It is well documented that people who help others following a disaster are affected by the experience.  It is a stressful time for the adjuster too.  Always keep in mind that you, as a catastrophe adjuster, are one of the most important players in the recovery process for the victim.  You will be the one providing the funds for them to put their life back in order.  And you will do it quickly.  It is a personally satisfying experience.

Stresses and Pressures

• Survivors

      A sudden and unexpected event has damaged or destroyed property essential to the life of the survivor.  It might be a home.  It might be a business.  It represented order and stability, but now it’s damaged or destroyed.

      The survivor will feel shock at first that such an evil event could hurt them.  They will probably next feel anger.  They will likely next become depressed, thinking the situation is hopeless and they will never recover.  Finally, they will decide to push on and recover as best they can.

      A sense of urgency will likely affect the insured to get things quickly back to normal.  They will feel pressure to take care of the family, or the business and its employees, as soon as possible.

• Civil Authorities

      The sudden event usually can’t be predicted as to time and place of arrival.  But any competent civil authority will lay contingency plans for the management of the disaster.  Those plans normally involve emergency response to the event with emphasis on preservation of life and containment of property damage in the initial stages of the disaster.  In later phases they will include plans for the recovery of the community, primarily in removal of debris, restoration of essential utilities, maintenance of law and order, and so on.

      Rebuilding the community is hardly ever addressed in civil authority contingency plans.  That is not considered an emergency operation.  Obviously, rebuilding following the disaster is critical to the survival of the community.

      Most well organized communities have a variety of codes and ordinances dealing with zoning and building.  In many major disasters, where destruction is general and widespread, there have been pressures on the civil authorities to rebuild to a new “master plan.”

      In disasters where there hasn’t been pressure to “right old wrongs”, the process of assuring compliance with zoning regulations and building code issues has generally been time consuming.  The civil authorities are often under great pressure to hasten the process by one group of constituents, while under pressure by another group demanding careful plan review and deliberation to assure everything is done correctly.

      **PLRB’s Building Code Division can assist with coverage questions that are related to state and local building codes.  It can be contacted on-line at www.plrb.org.  On the Home Page hover over “Coverage Research”, click on the “Building Codes” hyperlink.  State and local building codes are available on-line.**

• Adjusters

      You will face pressure and stress from a variety of sources.  Not all will be negative stress.  Many will be positive pressures that will assist in delivering excellent service to the affected policyholder.

      As a professional you have a commitment to do your job well.  Serving the needs of your policyholders under catastrophe conditions presents a real challenge.  Many people are expecting fast service.  You have the responsibility of providing that service.

      The policyholder’s immediate needs of food, shelter, and clothing will have to be addressed.  The victim may vent anger at you, not because you have done anything wrong, but because you’re a convenient target.  Giving the policyholder instructions to reach clear and attainable short-term goals, and establishing realistic follow-up dates, will help productively channel the person’s energy.

      Repair or replacement of the property will put pressure and stress on the catastrophe adjuster.  Both the policyholder and the civil authorities may place demands on the adjuster that will be stressful.

      Operating under such conditions would be a challenge under any circumstances.  But the adjuster may also have the additional stress of primitive living conditions and rudimentary working conditions.

      Understanding the stresses and pressures you may face in advance of the catastrophe operation should help you emotionally brace for the assault.

Crisis Public Relations Basics

      Following a catastrophe, the adjusters may find themselves in the position of insurance industry public relations representative.  The only difference between being a P. R. representative in a normal claim situation and in a catastrophe claim situation, is that the latter is a crisis.  Your every action and comment are being carefully watched and noted.

      A catastrophe presents a golden opportunity for an adjuster to show the public how well the insurance system works for its policyholders.  Relating to the public is a very important aspect of catastrophe adjusting.

      Public relations activity does not always mean talking with the media.  That will likely be handled by a P. R. person from your company.  The most critical public relations assignment will be executed by you the catastrophe adjuster.  To the average policyholder you are the insurance company.  You are likely to be the only person from the insurance company they will ever meet.  What you do and say, and how you do it and say it, will leave a lasting impression with that policyholder.

Effectively Communicate in a Crisis

• Dress professionally, but appropriately for the conditions.  It has been said what the listener sees is often more important in forming an opinion than what is heard. If you look professional, you communicate the message, “I am competent.”

• Show respect for the survivor and the circumstances in which he or she find them self.  Speak quietly, seriously, and directly.  Remember they have experienced a severe trauma and need strong support.  You, as the adjuster, can provide some of that support.

• Listen to what they have to say to you.  While it may not deal directly with the claim, the fact that you have just taken the time to listen transmits the message, “I care.”  Remember, just talking about the experience is a form of recovery from the disaster.  The policyholder may assume that you as an adjuster are familiar with catastrophes and can offer guidance, so they tell you their story.

• Take time with people.  Catastrophe victims sometimes complain that the adjuster was abrupt and rude.  Follow-up usually shows the adjuster was anxious to get to the next claim.  A fine balance should be achieved between treating the victim with care and providing fast service.

• Talk in plain language.  Most people are mystified by “insurance-ese.”  A good communicator will avoid the jargon and speak in language the policyholder can understand. The essence of all communication is formulating the message in an understandable form.  If the policyholder has no idea of what you’re talking about, misunderstanding will surely follow.

• If you have made any specific suggestions to the policyholder, consider leaving a written copy.  This will avoid a later misunderstanding over what is to be done.  Pre-printed checklists, thoroughly reviewed with the insured, can compliment your efforts.

• Follow up with the policyholder during the recovery process.  While it may not be absolutely necessary, a simple follow up call to see how they are doing effectively communicates the message, “This company cares.”

      In a normal claims situation, the home office usually deals with the media.  Since you are a catastrophe adjuster, you may find yourself talking with a reporter.   Be familiar with your company’s policy regarding media contact.  

Tips to help you communicate well when talking with a reporter

• Be relaxed, pleasant, professional.

• Speak to the reporter as if you were talking one-on-one with an associate.

• Answer the questions directly and honestly.

• Speak only to known facts.  Do not speculate on anything.

• Do not comment on other companies, their adjusters, or their practices.

• Never answer for someone else or speculate on what others are thinking or why they did something.

• If the reporter is asking you questions in areas beyond your knowledge or experience, say so.  You should never attempt to fake your way through an answer.

• Speak plain English.  Avoid insurance jargon.  Remember, you are communicating with the viewer/listener/reader, possibly one of your policyholders.

• Emphasize the positive, such as: 

–        How your organization is geared up to handle the large number of claims;

–        How people can expedite the claims process; and

–        How people can best get in touch with an adjuster.

• Be sure to let people know early on what might not be covered.

• Make your answers short, information filled, and to the point.

Negotiation Guidelines to Fix Value/Loss

• Be sure to review the company’s policy and guidelines on negotiations. 

• Check with the catastrophe supervisor to determine if there have been any modifications to those guidelines, because of the catastrophic conditions.

• If disputes arise, segment problems and negotiate separate solutions.  Do not make sweeping agreements under duress. 

Estimating Losses

• Review the company’s guideline for estimating losses to refresh your memory on claim situations which you may not have recently encountered.

• Ask the catastrophe supervisor if there are any modifications to the company’s estimating procedures because of the catastrophe.

• Make sure the insured understands your estimate to avoid problems later-on in the claim process.

Potential Problems

• “Neighboritis”

          This phenomena usually occurs after your policy holder has been talking with the neighbor and discovers the neighbor has received something that your insured hasn’t received.  “If my neighbor gets it, I want it too,” your insured reasons.

Solution

            Take the time to carefully explain to your policyholder, in plain language, the coverage of their policy, how policies may vary between competitive insurers, and how the coverage purchased by the insured will determine what may be recovered.

Be patient.  Be polite.

• “Competitoritis”

            Similar to “neighboritis” this problem might surface when your policyholder perceives a difference in how you’re settling the claim compared to what your competitors are doing.  The reasoning goes, “If their insurance company is doing that, so should my insurance company.”

Solution

            Explain the competitive nature of the insurance industry.  Show how policies might be different or how the coverage could be greater or lesser than your company’s policy.  Speak in plain language and be patient.

Always remember that your insured is under great stress!

Tools/Equipment Needed for the Job

• Cellular phone, Smart phone, pager
• Laptop
• GPS & printed road maps
• Cameras
• Flashlight, lantern, extra batteries
• Calculators
• Audio & video recorders, extra batteries
• Ladder
• Report Forms
• Checks
• Cash
• Special protective clothing appropriate for the type of event and the weather conditions.  Items should include:  boots, warm coats, rain coats, hard hats, ear muffs, gloves, soft-soled shoes for roofs, and so on.
• First Aid kit

Special Arrangements

• Activate a voice mail account or forward your phone to a predetermined location where your calls may be answered.

• If you live alone, you might want to arrange for someone to:

–     Monitor your residence

–     Pick up mail/deliveries/paycheck

–     Water plants

–     Feed pets

–     Water yard

–     Cut the grass

–     Shovel snow

–     Forward bills and other important mail

After The Catastrophe

Access to the Area

      Access will undoubtedly be limited for a period of time by the civil authorities during the emergency          phase of the disaster.  To gain access to the area during this time you should:

• Locate the emergency operations command post. This would most likely be a vehicle of some sort.  It may also be a building.  It will likely be marked by a distinctive sign or a “CP” flag.

• Show your company identification card and ask for access to the area.

• You will likely be issued distinctive tags you must wear on your person and/or display on your vehicle.

• You will also likely receive any special curfew instructions.

• Mark your vehicle with a distinctive window sign with company logo and identification, so the police patrols will recognize you as an insurance adjuster.

Safety for the Adjuster

• Your greatest chance of being injured on a catastrophe operation is in a traffic accident.  That is no different than any other day of the year.  But traffic safety hazards are compounded by the effects of the disaster.   People are not paying close attention to their driving.  Traffic control signs and street identification signs may be damaged or destroyed.  Roads and bridges may be weakened.  Keep alert.  Drive defensively.

• Bring protective clothing, appropriate to the season, to prevent environmental injuries such as sunburn, frostbite, etc.

• Bring protective clothing to prevent physical injuries.  Items such as safety shoes or boots, water-proof boots for work in mud and water, hard hat, leather work gloves, safety glasses, etc., should be considered.

• Assure all equipment is in good repair.  For example, your ladders should be in good repair, flashlights should have extra batteries, etc.

• Assure all equipment is appropriate for the job.  For example, ladders should be the correct length for needed reach.

• Bring your own smoke detector for use in your hotel room.

• Keep rested so you will be alert.  Most accidents occur when the victim is fatigued.  Know your pace.

• Bring medicine prescriptions with you so they may be filled if needed in the catastrophe area.  Do the same thing with your glasses or contact lens prescriptions.

Contacting Policyholders

• Be pleasant, but businesslike.
• Be sympathetic.
• Present your business card.
• Explain who you are, why you’re there, what you will do for them.
• Encourage the insured to accompany you as you scope the loss.
• Explain how you arrive at your scope figures.
• Answer all questions to the satisfaction of the insured.
• If company policy permits, leave a copy of your scope with the policyholder.
• If company policy permits, let the policyholder use your cellular phone to make adjusting-related calls, if their phone is out-of-service.

Inventory

• Get the insured participating in the claims process early with the preparation of an inventory.

• Ask them to list room-by-room contents damaged and contents destroyed.

• Ask them to list when purchased, where purchased, and purchase price.

• Ask them to look for any photos showing the room and its contents before the disaster.

• Ask them to save damaged contents for your inspection before removing to a land-fill area.

• Assist them by suggesting use of catalogs and websites to refresh their memory and obtain prices.

• Remember to provide any company forms or booklets, and to refer them to company websites that may help them complete this important job.

Salvage

• The insured claimant will likely see only debris following the disaster, while the claims professional will see not only debris, but salvage potential.

• It is important to look at all salvage possibilities, as outlined by your company, to help speed recovery, control claim costs, and ultimately control costs for the policyholders.

Protection of Property/Damage Mitigation

• The insured hopefully will have taken emergency action to preserve and protect the insured property after the loss.  If not, provide written instructions detailing these necessary activities and keep a copy for the file.  But, be aware that material shortages may hinder the process.

• Be especially aware of the need to provide a more permanent solution to the protection of the claimant’s property.  This helps set the insured’s mind at ease, as well as control potential expansion of the claim, if further damage should occur.

• Plan to meet company policy on authorizing temporary repairs to protect the building and contents.

• Check with your supervisor for a list of appropriate, safe, and secure storage facilities for the insured’s to place their possessions until the structure is rebuilt or repaired.

Additional Living Expense Guidelines

• Review your company policy on Additional Living Expense.

• Thoroughly explain to the policyholder what is covered and what documentation is required for the A.L.E. claim.

• If your company does not have an arrangement with a claim service provider for emergency housing services, begin assembling a list of realtors to aid you in finding appropriate property for long term displacement cases.  Remember, competition may be fierce for quality rental properties following a catastrophe.

• Maintain communication with your supervisor regarding any changes in the A.L.E. “climate”.

• If consistent with your company policy, consider negotiating a blanket monthly or weekly rate, and allow the insured to make his or her own arrangements.

List of Reminders

• As soon as possible begin putting together lists of people with services you might need during the course of the catastrophe operation.

• Check with the catastrophe supervisor for the company’s list of:

–     Experts

–     Consultants

–     Government Agencies

–     Others