Preparing for and Managing Claims

Each company has different claims information and catastrophe requirements. After a catastrophe, agents probably will have additional personnel handling claims and dealing with various carriers. The Insurance Company Catastrophe Information form will help organize this information and make it easy to disseminate to the appropriate persons. In the absence of company instructions, use the same adjuster for catastrophes as you would for normal losses.

An Insurance Company Catastrophe Information form should be completed for each carrier prior to any catastrophe. Notice the “restrictions on binding authority” section. Most companies have certain restrictions on binding authority when a hurricane is approaching. Most suspend such authority altogether, some base those suspensions on distance of the storm from the coast in miles, and others refer to latitude and longitude. In some cases, pre-hurricane depressions, tropical storms and waves are the determining factors. From an E&O standpoint, it is important for every employee to be familiar with this information prior to hurricane season.

Use a storm tracking chart to indicate the point where binding authority is suspended for each individual carrier. This allows the agency to predict, for example, that if the hurricane continues at its current speed, binding authority for ABC Company will be suspended around 3:00 p.m. Wednesday. If circulated to all employees, this could reduce greatly the chances of an E&O claim as a result of issuing a binder when authority to do so has been suspended.

Prepare and Educate Non-Claims Staff

• Temporary Repairs: If the damage is considered a covered loss (be careful of flood/rising water exclusion), nearly all policies pay for temporary repairs to protect insured property from further damage. Keep all receipts.
• Debris Removal: Removal of debris following a covered loss (be careful of flood/rising water exclusion) is covered, with certain dollar limits tied to the amount of insurance. Trees, at least, will be moved from the house into the yard, or may even be removed from the premises completely, under certain homeowners policies and under certain conditions. (For example: ISO policies cover removal of trees if they are downed by a covered peril and damage a covered structure; trees merely blown down in the yard are not generally covered as property or eligible for debris removal.)
• Additional Living Expenses: Reasonable expenses are covered if the residence is made uninhabitable by direct damage from a covered peril. In the event of an evacuation ordered by a civil authority following damage in the area, additional living expenses are covered for up to two weeks. Keep receipts.