Increasingly, we’re seeing climate change leading to catastrophic weather events that have resulted in major losses to residential and commercial businesses. What are some of the key trends you’ve noticed from an insured’s perspective?
The catastrophic weather-related insurance events over the last 36 months in the continental United States have been unprecedented. Couple that with the non-weather-related catastrophic events, such as the losses resulting from Covid-19 and civil unrest claims, and what is created is a challenging marketplace for policyholders. We have also seen a significant increase in both residential and commercial policy premiums as a result of the aforementioned losses. Many insurance companies have pulled out of specific markets due to the perceived increase in risk exposure in those markets.
How have insurance companies and their claims departments adapted to these heightened risks and claim filings by clients?
With Hurricane Hannah hitting the Texas coast as the first named storm of 2020 in July along with the California wildfires, the Iowa derecho, Hurricanes Laura, Delta, Sally and Zeta, the already strained insurance market was turned upside down. Travel and distancing restrictions as a result of Covid-19 limited the movements of most of the industry’s claim handlers, which resulted in crippling delays to the timely payment of claims. As we entered 2021, the devastating polar vortex that impacted the entire state of Texas further delayed claim payments to policyholders.
Are there specific business sectors that have been especially hard hit by some of these major weather events, like the tornado that hit Newnan recently?
Residential policyholders and small businesses are always the most vulnerable in the wake of major weather events. The direct hit on Newnan from the recent tornado had a ripple effect throughout the community, as it affected not only homeowners but also local businesses, the school system and the municipality, ultimately disabling the community infrastructure.
How are both small and large businesses protecting themselves? What steps can they take?
Small and large businesses alike would be well served to invest the time to understand the true value of their business and how their insurance coverages should be placed in order to protect and preserve their business operations and income in the event of a catastrophic loss. We see many businesses, both large and small, that are either improperly or under-insured, threatening their business continuity and future business viability. We recommend investing the time in meeting with a qualified insurance professional who understands your specific industry or trade. Such a conversation is usually invaluable in identifying the commensurate coverages to best protect your business.
In what ways has the evolution of the insurance claims process given rise to public adjuster’s role?
The insurance claims process has always been onerous, and with catastrophic claims in 2020 topping $83 billion (a 40% increase over 2019) insurance companies are enacting even more strident claims practices in order to protect their financial interests. These practices can conflict directly with providing the needed indemnity to the policyholder. As such, the role of an expert public insurance adjuster is to act as an accountability partner to the policyholder and a steward during the claims process by preparing and presenting claim loss values on behalf of the policyholder. This approach aims to level the playing field against the carrier and their experts. While partnering with a public adjuster to prepare and present claims may sound simple, most people don’t go to court without an attorney or file complex tax returns without a CPA. Business owners shouldn’t navigate large insurance claims without the guidance of an expert.