Post-Storm Claims Handling

First things first: Get company claim numbers to insureds (ideally, this should have been done before the storm!). Post company claim and fax numbers on your agency’s website, on social media, even on your agency’s front door, and remind your insureds that claim service is available 24-hours a day.

Since the 2004/2005 hurricane season, the responsibility for reporting claims has shifted from the agency to the company. This does not mean that all claims will be reported directly to the company. Agencies will still have many insureds who will contact them directly and expect to report the loss as they have in the past.

Many insureds will visit your office, particularly if local phone service is down. This can and will cause a great deal of disruption to the office. If the agency can convey the message that all claims will be handled on a priority basis with the most serious claim handled first, it will ease tensions. This message should also be distributed to the local media with a request for the public to remain calm and patient.

Setting and Managing Expectations

The FAIA Catastrophe Group recommends agents do not recommend contractors or repair shops, especially because many insurance companies use managed repair programs. Agent should make insureds aware of the dangers of hiring unlicensed or uninsured contractors and caution them against signing anything they don’t understand or haven’t read.

If a mortgage or loss payable clause applies, the loss draft will also include the name of the appropriate party. FHA regulations require inspection of the property before repairs are made in excess of $1,000. In some instances (extreme damage), this may be required under any type of mortgage. In almost all cases, the mortgagee will require inspection of repairs before endorsement of the draft. To avoid confusion and misunderstandings, advise your insureds of this and tell them to contact the mortgagee if they have questions.

If damage to personal property is involved, each insured should be advised to request a separate draft for payment so proceeds won’t be held up by a mortgage requirement on building damage.

Providing as much information as possible to the insured about reporting a loss and explaining the claim process, in the long run, will save time.

Loss Reporting

If your carrier requires you to do loss reporting, be certain Notice of Loss forms are properly completed. Check each loss notice for completeness and accuracy before sending. One individual should be given the responsibility for checking each form and the authority to follow up with others to see that it is properly completed.

In completing the ACORD form, attention to detail is important. Show all coverages and form numbers. Be sure to include edition dates and all endorsement numbers. Many companies are using unrevised forms, and independent adjusters won’t necessarily know which companies are using which forms.

If your agency is inundated with claims, we suggest using the Agents Memo of Loss short form that can be quickly completed with minimal of information needed to report the claim (“Agents Memo of Loss” is located in the appendix).

Since most claims are reported online or by phone, consider designating staff solely to call in the claim or complete it online using the Memo of Loss and the insureds file to free up account managers to work directly with clients.

If it is necessary to request emergency handling by the adjuster, make sure there is an accurate explanation of why such action is necessary. For example, if an agent has a sincere and true hardship case, the ACORD form should be noted “hardship case,” with an explanation attached. Use discretion and only request emergency handling when necessary.

Prior to submitting, the person checking the loss forms should confirm each of the following:

• All information is legible
• If not typed, forms are completed in ball point pen
• The policy number is complete, including prefix, symbols, suffix, etc.
• The name appears on the loss notice as it does on the policy
• The description section provides as much detail as possible
• If the loss involves some special company policy, a copy of the contract and copies of all pertinent forms are attached.

Consider implementing a key account claims procedure. Some agencies have their producers and select account managers proactively reach out to their key accounts; both personal and commercial lines. These include personal visits, outbound calls, emails, and texts in the immediate aftermath of the storm.

Finally, mail and email a follow-up letter to the insured with each loss report. Often, in the wake of a hurricane, losses are overwhelming. A follow-up letter from the agency reassures the customer and provides a written review of the procedures outlined in in-person or telephone conversation. (See sample letter to insureds).

Set up a Separate Claims File

A separate file (or directory folder) for catastrophe claims could prove to be of great value in following up on loss reports and in tabulating loss experience. Always retain copies of the ACORD Notice of Loss form (see example in Appendix) for the agency.

An agency may find it necessary to substantiate those for company loss and contingency purposes. Agency agreements vary by carrier, but many will include a stop loss for single occurrences in determining agency profitability.

Even in the absence of such an arrangement, the agency should document those claims resulting from a catastrophe for future company negotiations and relations. The Catastrophe Claims Log may be used for this purpose. Maintain a separate claims log for each carrier.