Adjuster Resources in the Property Claims Puzzle
The work of a property adjuster is challenging. Claims vary in their severity and complexity and can wear down a property adjuster, especially new adjusters learning the trade. In order to provide first-class customer service, property adjusters must know the tools available to assist property owners throughout a claim. Below is a description of several resources available to assist both property adjusters and their displaced homeowners in the claims process.
Depending on the type and severity of a claim, some level of restoration is typically necessary. The role of a restoration company is to act as a first responder following significant damage to a home from fire, flood, water damage, sewage backup or other major losses. A restoration company will clean up the mess and work to preserve and protect the home and its contents so that further damage will not occur. Restoration work typically involves three primary steps… salvage, cleaning and pack out. Professional restoration companies are able to determine which contents need disposal, which contents needs to be cleaned and which contents need restoration to a pre-loss condition. Items such as specialty furniture, electronics, art and important documents may require pack out in order to go to a facility for detailed restoration.
While the services offered by restoration companies can be broad, some contractors specialize in fire damage, water damage or roof damage. Utilizing a contractor specializing in a particular area of damage in a claim can help minimize cost and maximize the effectiveness of the restoration work. During the restoration process, a home is usually not livable and often times the contractor runs into problems that may extend the restoration timeline. Therefore, adjusters work with homeowners to arrange and manage temporary housing throughout the restoration process. Since most landlords require 30-45 days’ notice before a tenant moves out or extends their lease, communication between the adjuster, the contractor, the homeowner, and the temporary housing company is paramount. Excellent communication can minimize cost and heartache involved during this leg of the claims process.
Independent adjusters are an important asset for property insurance companies. Insurers use independent adjusters for a variety of reasons, but most notably during large property damage events. Examples include hurricanes, floods, wildfires and other events that lead to a large number of claims. Insurers do not have enough full-time adjusters to provide the service needed to manage the spike in claims associated with natural disasters. An independent adjuster still works on behalf of the insurer but acts as a contractor rather than an employee of the insurance company.
Contents Management Services
The purpose of a content management services company is to assist in valuating insurance claims. In particular, these companies are helpful in evaluating “one of a kind” items that are difficult to determine a true face value, such as family heirlooms, jewelry or art. A recent Claims Journal article detailed how a content management company recently used their services to analyze a “unique” figurine claimed by a homeowner during a loss. The value claimed by the homeowner was almost $10,000, but after the content management company analyzed the item, the “reasonable” replacement value was only $250. The purpose of a content management company is not to minimize the amount a homeowner receives in a claim, but rather to maximize accuracy and thereby assist the adjuster.
Temporary Housing Companies
As referenced earlier, temporary housing companies provide a service that proves helpful for adjusters and insureds. Temporary housing companies help identify alternate housing sources when a homeowner’s home is not livable. Most homeowners insurance policies provide additional living expenses coverage, which provides reimbursement to the homeowner for temporary housing while they are displaced after a loss. Following a hurricane, for example, temporary housing can be very difficult to find since most everyone in a geographic area is impacted. As a result, insurance companies save significant time and resources by working with temporary housing companies to help identify temporary housing options.
Temporary Accommodations is one of the industry leaders in this space because we focus on our mission of “providing the fastest, most convenient, cost-effective and comfortable temporary housing available, and to perform this service with unsurpassed integrity, diligence, and attention to detail.” One challenge for adjusters in providing temporary housing to insureds is determining the fair rental value of their property pre-loss. Most policies with additional living expenses coverage will only provide reimbursement for expenses up to the fair rental value in the area where the displacement occurred. Insurers often work all over the country and rents can vary significantly from one zip code to the next. Temporary Accommodations, however, also provides adjusters fair rental value determinations free of charge. This makes the valuation portion of the temporary housing process much easier for adjusters as they evaluate the additional living expenses afforded to the policyholder.
In order for an adjuster to proceed with coverage of a claim under the policy, he or she must determine if the loss occurred due to a covered peril. Depending on the circumstances of the loss, the cause may be clear. However, when the cause is not clear, a claim investigator can help identify the most likely source of the loss. The investigator examines the scene and makes a determination of the loss' origin and cause. Investigators often utilize drones to assist in documenting loss scenes for analysis.
The investigator collects evidence and observes the scene to gather as many facts as possible. In some cases, the results of the investigation lead to subrogation, which is a claim by the insurance company against the responsible party or the manufacturer of a product. For example, subrogation could occur if the investigator determined the cause of the fire was due to a masonry contractor’s faulty work while installing a fireplace. While a homeowner files a claim due to the fire, the insurer would subrogate the loss against the masonry contractor or their insurance company. An investigator may also help determine if foul play or arson was involved in a loss. This service is especially helpful for adjustors in complex claims.
Estimating Software Companies
Estimating software companies provide software that assists adjusters in estimating the cost of repairs and reconstruction for residential and commercial structures. This software is able to maintain up to date pricing data for various economic areas of the country. The software includes pricing for information such as labor costs, labor productivity rates (construction and restoration), material costs and equipment costs. This type of software consolidates the challenges associated with accurately projecting the potential cost of a claim. This software allows the adjustor to input some basic information related to the loss and then receive approximate claim estimate data as an output. Estimating software companies provide support and assistance to adjusters in order to make the estimating process as simple as possible.
Property claims can be relatively straightforward, messy or most likely somewhere in between. Property adjusters, however, must prepare for the messy and hope for the straightforward. By understanding the above resources, a novice property adjuster will have access to additional tools for use in the daily grind of the property claims management process.