When Catastrophes and COVID-19 Collide - Adjusting Your Insurance Claim Adjustment Plans
After wildfires and earthquakes during the past quarter, insurers faced the challenge of adjusting property claims in COVID-19 conditions. While these events were significant, how will insurers respond when a major hurricane, tornado or megafire arrives?
In these unprecedented times, we need to acknowledge that the loss adjustment process during catastrophic events is not what it was before. With a “few new wrinkles,” such as social distancing, special safety protocols, travel restrictions, etc., insurers must be creative and think outside the box to put together a comprehensive Cat Plan.
What are some important considerations for any COVID Cat Plan? On June 2, my Gen Re colleague, Nick Ciabattoni, and I hosted a client webinar titled Catastrophe Planning Amid a COVID-19 Environment.
Several health and claim adjusting industry leaders, including a former officer from the CDC, shared their “must-have” items for a COVID Catastrophe Plan.
COVID Cat Plan List:
- What governmental and public safety organizations will you follow for developing working protocols on social distancing, equipment and other site practices? Insurers and businesses, in general, are faced with a blizzard of WHO, CDC, OSHA, EPA, FDA and other federal, state and local guidelines. Cat plans should specify which mandates are being followed and ensure that safety updates are incorporated.
- Flights, rental cars and hotels can be logistical nightmares, so investigate transportation options and realities before a catastrophe hits. And, don’t forget to consider the travel health and food availability issues in devastated locations.
- Selecting qualified and available experts is a critical part of any plan, and that requires asking questions of those experts to ensure that they have a comprehensive and concise plan to provide the exceptional service you expect.
- Are there alternatives to on-site inspections that software can provide to save you time and money without sacrificing accuracy? Do drones and other technology work as an alternative to on-site, and will the policyholder be amenable?
- Protocols for cleaning and decontamination are always present. However, with COVID-19, the need for post-cleaning verification is greater. Insurers need to pre-select the experts and environmental diagnostics laboratories that are accredited and able to provide this service.
- Will the use of Personal Protective Equipment (PPE) be voluntary or mandatory? The policyholder may have strong views on this question. Either way, ensure that you have enough PPE materials on hand for what can be a longer-than-usual site inspection and damage repair period. And, address how you will dispose of used PPE equipment in compliance with all applicable regulations.
- Review your claim handling guidelines with any new safety rules and laws in mind. Do your guidelines incorporate the latest state regulations? Have there been any changes to the state Unfair Claims Settlement Practices laws that should be addressed in your guidelines?
- Who will be responsible for providing any mandatory reports to state insurance departments and complying with any new dispute resolution procedures?
- Don’t forget to incorporate fraud checks into the COVID Cat plan, as there is always the potential for fraud at some level. This might also be a good time to review fraud plans with the new safety environment in mind.
- Communication is more critical and challenging than ever before, so it’s an essential step to establish the means of your preferred communication with the policyholder, adjusters and others involved in the claim process. Phones, emails, texts, zoom or other online meetings should be part of the tool kit, with all the details needed to keep the lines open and information flowing.
With the peak of the 2020 hurricane and wildfire season right around the corner, now is the time to examine your Cat Plans to ensure that they are also COVID-ready Cat Plans. If you would like to connect with our webinar speakers for more of their expertise, let us know.
Our most recent client webinar on July 9 focused on another challenge - Measuring Business Interruption and Extra Expense Losses Related to Riot Claims. We will talk about that in a future blog post. For now, if we can share any perspectives on Cat Plans or Riot Claims in COVID-19 times, contact your Gen Re representatives or email me. Helping clients is our business!