Earlier this year, professionals from all pockets of the claims industry gathered at the Louisiana Claims Association’s 29th Annual Education Conference & Expo in Baton Rouge. Attendees heard from claims representatives, insurance adjusters, third party administrators and more. Here is a recap of a presentation hosted by Sedgwick and EFI Global experts about property damage claims resolution.
Preparation = post-claim success
Whether you are in the public entity or private sector, there is one common foundation for post-claim success: having all your ducks in a row ahead of a claim occurrence. In claims involving restoration/remediation, it is the preplanning — ensuring the right players are involved, and that those players can work together symbiotically — that determines its outcome.
Certain factors must align before the loss adjustment can begin. Considerations need to be addressed and prepared for. There must be a deep understanding of damage assessment, restoration costs and billing procedures. The list goes on.
Property damage losses
An unending range of factors can cause property damage — from water intrusion to wind and fire. Last year was one of the most challenging in modern history for natural disasters. In addition to loss of life, direct economic losses and damages from notable natural disaster events were assessed at $313 billion (less than half of which was covered by insurance).
Due to hotter temperatures and significant humidity, Southern regions are highly susceptible to mold growth. As time passes, mold growth advances, and regulations must advance with it. A quicker dehumidification/climate control response is needed to address impacted materials and mitigate further property damage.
The players involved in a claim
First, the carrier assigns the team who will handle the case, including an independent adjuster (where needed), experts and counsel. The carrier will determine deliverables — what is due from the team and when. Importantly, it is the carrier that first sets the tone of the loss adjusting process, a factor that will have lasting implications throughout.
An independent claims adjuster effectively acts as quarterback, whose strategy and leadership will carry the claim to the end zone. The adjuster must be empathetic and communicate effectively to lead the team toward pre-determined deliverables. This includes setting boundaries with the experts, defining team priorities, and acting as main line of communication to the insured.
Other types of experts who may be involved
More likely than not, several additional experts will be engaged to shed light on the technical details of the case. Many of them will be hired early, particularly mitigation consultants and the like. Others may be needed immediately where stabilization or critical infrastructure is involved (HAZMAT or instrumentation vendors, for example). Experts must be highly qualified and hold specialized knowledge in their relevant area. Certifications are also required. Each expert must understand both the weight, and the limitations, of their roles and responsibilities.
Determining which expert to engage depends on the unique circumstances of the project. Mitigation consultants handle the schedule of rates, determine work authorization and set responsibilities. This can include pinning down the scope, confirming the project’s scope with the team, and performing daily documentation to discern how conditions have changed since the start.
An industrial hygienist is responsible for setting the critical path with the insured, which is, in essence, the course of direction that will finish the job. This role oversees damage assessment prioritization and providing instructions to other team members in the field regarding scope. An industrial hygienist will address environmental considerations — whether that be navigating state licensing and regulations, handling allegations of contaminated water, etc.
Forensic equipment consultants help to mitigate equipment damage. Responsibilities include contamination analysis, controlling the environment, identifying contractors for technical decontamination and collaborating with original equipment manufacturers to test, repair and recalibrate the damaged equipment.
Structural engineers assess of structural stability on site. Is the building safe to enter? If not, what can be done to provide immediate structural stabilization and shoring? Key responsibilities include identifying and preserving evidence and determining the cause and extent of damage. Considerations include, for example, whether damage was caused by a flood versus wind, whether it is newly sustained or pre-existing, or whether damage happened suddenly or was ongoing for an extended period.
There are other key players, too. Subcontractors. Regulators. Government agencies. Equipment restoration specialists. And of course, the policyholder.
Concerns and considerations
One universal operational concern is the structural integrity of the loss site. An additional critical consideration is ensuring the team utilizes the correct materials and equipment to garner the intended results. Is the root of the loss mechanical, or HVAC-based? What are the official building code requirements, and can a competent load be maintained?
For a loss involving moisture mapping, what is the correct protocol used to test a sample? Should testing be qualitative or quantitative? Again, the unique circumstances of each case will point toward the answers. Ensuring laboratories facilitating the loss process have proper certifications, as do all involved experts, is imperative.
Additionally, repairing versus replacing the property that has been damaged is a vital discussion. Engineers can repair most anything, but it may be more cost effective to replace altogether.
Contract and invoice concerns regarding labor, equipment, supplies, subcontractors, and terms of contract are common. Clear, organized documentation is critical.
An assessment and restoration shouldn’t begin until the source of the issue is resolved. For example, a non-climate-controlled environment will impact all subsequent assessments and prevent further damage mitigation.
Prepare for problematic areas for dispute on invoicing matters. Document everything: payroll journals/proof of casual labor payments, equipment material rates and daily usage logs, outside vendor equipment material rates, etc. Workers should complete daily time sheets (signed by a supervisor) and keep all project-related invoices for reference.
Memorialize all meetings and discussions with the insured, including every detail — even those that seem insignificant. Keep a tidy record of upcoming action items, agreed-upon deadlines and any changing conditions in real time. Send the records to each party involved in a timely manner.
Finally, engage the right experts, and ensure no conflicts of interest are present. Check for proper licensing and ensure involved laboratories are certified.
Preparation is key. Remember: it is the questions not asked that may cost you in the end.
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