Hurricane Ian: strategic preparation, critical response

December 14, 2022

Share on LinkedIn Share on Facebook Share on X

By Beau Bishop, SVP, catastrophe operations, Mark Della Giustina, VP, building consulting services, and John Gragson, SVP, operations

After plowing through the Caribbean, Hurricane Ian made landfall in southwest Florida on Sept. 28 as a dangerous Category 4 storm.

The catastrophic event took the lives of nearly 150 people and caused an estimated $70 billion in property damage in the U.S.; it’s likely the costliest storm in Florida’s history. Ian’s timing and trajectory caught many off guard, as predictive models had it arriving two days later and hitting further north.

As a major provider of catastrophe response services, we know that rule No. 1 with CATs is to expect the unexpected. Thanks to a winning combination of experience, preparation, expertise, flexibility and breadth and depth of resources, the Sedgwick property team was ready — in the right place at the right time — to help our insurance carrier clients handle the influx of claims associated with Hurricane Ian, and we continue to support their impacted policyholders throughout southwest Florida.

Before the storm

The services we offer are critical to the recovery of any area hit by a natural disaster. Beyond helping individual owners of homes and businesses assess the damage incurred, our adjudication of claims enables much-needed insurance payments and government grant money to flow into affected communities. This jumpstarts economic recovery, the rebuilding process and getting people back home, back to work and back to “normal.” Understanding the role we play as part of the first wave of catastrophe response makes our preparedness all the more important.

Beyond our annual readiness efforts in anticipation of Atlantic hurricane season, our targeted preparation for Ian began weeks before the expected severity of the storm made headline news. We were continually watching the weather models to gauge Ian’s magnitude, timing and direction, as well as examining the Florida footprints of our major insurer clients in the storm’s various possible paths. Throughout the weeks leading up to Ian, we were in daily contact with clients to plan for funding reserves in accordance with estimates on the resulting claims.

When it became abundantly clear in the days leading up to landfall that Ian would be a catastrophic event for the state of Florida, we had to make logistical decisions about how best to mobilize our team. These decision points require a delicate balance and the ability to adapt to changing conditions. When it comes to CATs:

  • We want to have a robust team of skilled experts nearby ahead of time to respond quickly, but also must keep our people out of harm’s way.
  • We can’t send our entire team to one area and leave the rest of the country unattended, so a staggered approach is preferable, even amid pressing needs.
  • We aim to begin assessing damage as soon as possible, but first must allow those responsible for restoring power and communication networks and conducting search and rescue/recovery to do their vital work.
  • We must be mindful of residents evacuating the target area and avoid occupying too much temporary housing in the surrounding region.

In the aftermath

Once the coast was clear, our first order of business was information-gathering. Insurer clients look to us to gain access to and inspect affected properties to help them understand the magnitude of the damage and manage their financial and service responsibilities to their policyholders. Our teams have years of experience working closely and safely with first responders, governmental authorities and others on the ground right after a catastrophe event.

In the first 30 days after a CAT, we experience a huge influx of claims. Within two days of Ian, we’d already received thousands of assignments. To ensure the right level of support to meet clients’ varying needs, we relied on our extensive resource network. In accordance with the general rule, about 80% of the claims were low-complexity and could be adjusted quickly. The remaining 20%, on the other hand, were more complex and required more time and specialized expertise. It is on these claims that we turned to various specialty teams within the Sedgwick/EFI Global family, including building consultingrepair solutionsforensic engineeringenvironmental consulting and more. With our collective in-house expertise, we are uniquely positioned to address a wide of client needs, and clients can enjoy the benefits of working with a single partner during an already hectic time.

Caring counts

Although we are in the business of property claims, our ultimate purpose is taking care of people. In the wake of a traumatic storm like Ian, one of the most important thing we deliver is empathy. Oftentimes, our adjusters and professionals are the first people owners of homes and businesses speak to about the damage they incurred and the awful things they experienced during and after a catastrophe. Beyond the technical knowledge needed for loss adjusting, we train our colleagues on the importance of listening carefully, making good on their word, following through quickly, and showing they care. They also know how to assist displaced policyholders in securing temporary housing until their homes are safely inhabitable again. The talented Sedgwick colleagues who do CAT work are on the front lines of conveying our “caring counts” philosophy.

Ian may be nearly three months behind us, but our teams are committed to being there as long as it takes to assist clients and their policyholders with whatever they may need. If we can be of assistance to you, please contact our team at [email protected].

Learn more — see our brochure for additional information on Sedgwick’s property claims solutions for the U.S. market and our flyer for details on our strategic claim resolution services for Ian-related losses

Preparing your public entity for a catastrophe? Here’s where to start.

November 28, 2022

Share on LinkedIn Share on Facebook Share on X

By Meredith Campbell, executive general adjuster

In part one of this blog series, we discussed the importance of preparing for a disaster before it strikes — which takes thorough review, reevaluation and replanning. For some public entities (PEs), the topic sparked conversation but was unintentionally forgotten about.

The consequences of foregoing preparation

“As long as there’s a policy in place, everything will be fine, right?” Then you turn on the news: the meteorologist is talking about a potential storm with a 20% chance of development. While the chances are slim, several days later, it’s a category two hurricane gaining strength as it crosses the ocean. Projections show landfall all along the Atlantic and Gulf shores. Again, you don’t worry since it’ll be a coastal event. Not a problem for a public entity several hundred miles inland. Or will it?

As the hurricane intensifies to a category four, models started to tighten — maintaining a strong force until it reaches Canada. A wave of panic and regret starts to set in as you remember the roundtable that should have taken place weeks ago. By this point, the time to properly strategize has passed. Any increases or additions to coverage or statement of values (SOVs) may not be accepted if a peril is already looming. The governor has issued a state of emergency ahead of the storm, and businesses are starting to close and board up, including the local agent’s office.

A last-minute plan is better than no plan

Between trips to the grocery and home improvement store, build in time to reconvene with all available internal stakeholders. Last minute planning is better than none at all. If nothing else:

  • Take any necessary preparations for building structures, such as boarding up or placing sandbags.
  • Power down and unplug electronics and large electrical components to prevent surge damage.
  • Move high-value items away from windows.
  • Identify an insurance point of contact. This will be the person to file the claim and interact directly with the adjuster and team. All information will go to and through this person, eliminating a game of telephone.
  • If possible, divide major properties into smaller triage teams. Once the storm passes, complete drive-by inspections of key properties to immediately alert the adjuster of any serious problems.
  • Establish a shared drive for staff photos. Plan to take more than you think you’ll need.

Had there been a planning committee established to review the current policies ahead of time, the plan would differ slightly. Sure, the above physical preparations would remain the same, but instead of rushing to create a strategy, organizations could:

  • Host a meeting with the nominated adjuster, restoration project manager, and designated point of contact.
  • Make copies of the restoration service agreement for the adjustment team, addressing any pricing issues ahead of the event. That way, restoration teams would already be familiar with the overall potential exposure, allocating and staging equipment.
  • Alternative methods of contact (beyond office phone or email) can be established with the adjuster, perhaps by keeping an open line of communication through text messages throughout the event.

The time to prepare for a potential disaster is now; it’s not a matter of if, but when a catastrophe will strike. Preparation sounds like a daunting task, and sure, it will take some time (and perhaps money) to ensure success. However, while there’s always hope that it will be time wasted, it’s much more likely to be time well spent.

This blog is the second installment in a series where our experts highlight actionable pre-event, event and post-event adjustment and reconstruction for public entities. Stay tuned for the third blog, which is coming soon.

Public entities through the lens of a major weather catastrophe

October 20, 2022

Share on LinkedIn Share on Facebook Share on X

by Meredith Campbell, executive general adjuster

Public entities (PEs) are in a unique position as policyholders with a vast saturation in relatively tight geographic markets. Recognizing the larger sociopolitical and financial impact of loss to PEs, even finite events can yield devastating effects with widespread ripples throughout the constituency.

In the face of potential disaster, one question prevails: Since all property hazards cannot be eliminated, how can a disaster be kept from turning into a nightmare? At the risk of sounding trite, failure to plan becomes a plan to fail.

Preparing for disaster before it strikes

Rarely is this failure intentional, but the effects can be devastating. Fortunately, review of existing protocols and coverages paired with the drive to reevaluate, update and if necessary, correct, will help ensure a smooth post-loss recovery. Spanning nearly 2,800 miles coast to coast, weather (and associated catastrophic events) varies greatly across the United States. Recognizing the limitations of common denominators, let’s consider a potential category three hurricane — combining wind and water — the only two natural perils without geographic restriction. This well-formed 120mph storm will cause widespread, devastating damage — spanning the entire PE-served geography. Citing the National Hurricane Center, “well-built framed homes may incur major damage or removal of roof decking and gable ends. Many trees will be snapped or uprooted, blocking numerous roads. Electricity and water will be unavailable for several days to weeks after the storm passes.” While this storm is weeks, months or even years away from formation and impact, the time to prepare is now.

Nearly every public entity has some form of natural disaster plans. Most commonly, those plans include evacuation routes, emergency shelters or other mechanisms to maintain a level of service to the public. While the mission of PEs is to serve the constituency, when is the last time this effort was focused inward? Without ensuring its own post-disaster stability, how can it continue to serve the public?

Depending on the size, scope and financial feasibility, it’s understandable that most PEs nationally do not have a qualified, dedicated risk management professional. All too often this role is served by administration pulling double duty, with this a position they were likely voluntold for. Recognizing that this is not the person’s primary daily function, it’s very likely that the points of discussion below have sat unaddressed for some time.

  • Policy coverages: Are all regularly occurring natural perils covered by some policy? Do earthquake or flood endorsements need to be examined?
  • Statement of values: When is the last time this list of insured property was cross-referenced?
    • Property insured
      • Still paying for insurance on a building sold or torn down three years ago?
      • Was that new addition for the south wing ever integrated into the main building?
      • Are those leased portables on the policy? Does the lease say insurance must be carried?
      • Is there an accurate inventory of contents within a given building or room?
    • Valuation: In light of the pandemic, the international shipping and supply crisis, and current inflation, is the amount of insurance carried appropriate to restore or replace damaged items?

The agent or broker will be able to assist, at minimum, with a copy of the current schedule. Cross-references with historical sales, etc., will need to be reviewed in house, since each PE knows what it owns or leases.

Pricing is a complicated situation. Since the pandemic began in 2020, construction pricing nationally has skyrocketed, leaving many policyholders (PE or otherwise) in a position where their statement of values (SOV) predates these market fluctuations. Claims are adjusted based on date of loss or post-loss pricing, reflecting real time. Unlike any time in recent history, this places the pre and post-loss in conflict, most often to the detriment of the policyholder. Whereas a 80% coinsurance provision was well-met in 2017, today that same dollar may yield a 55% insurance to value (ITV). Deltas, while usually unintentional, can be vast, resulting in substantial dollar adjustments. If these figures are untouched, or adjusted regularly on a purely percentage basis, engaging a building valuation expert, such as Sedgwick, can substantiate any necessary SOV increases.

Looking ahead

The time to prepare for a potential disaster is now; it’s not a matter of if, but when a catastrophe will strike. While there will always be evolving challenges for public entities to consider, the steps outlined below are always good points to revisit on a regular basis.

Establish a team

Who will run the show in a post-loss event? After a disaster event, employees are likely to be victims, as well as community leaders. Identify talent within the organization to create an internal triage team for insurance.

  • Who will be the main point of contact? Who is their backup in the event a tree is through their house?
  • Who will be available to walk the adjustment team through all impacted properties? These long days may require overtime.
  • Who has keys to every single door in the public entity? Do they all work? Are there backups?

Identify and nominate an account adjuster

Public entity, like any other specialty, requires a deep understanding of large-scale account management, in addition to the nuances of public service in an often politicized environment.

  • Post disaster, restoration companies will flood the area. Has the PE considered signing a service agreement with one ahead of a disaster? This will ensure agreed pricing and guaranteed service by a known and trusted partner
  • Does the PE regularly work with an architect, contractor, engineer, accountant, etc.? Consider establishing that in a post-loss environment, they will be onsite, walking with adjustment for resolution in real time. Agreement up front can vastly reduce discrepancies down the line.

Virtually introduce all parties

  • Identify and preserve the documents: Are these readily available? Chances are, someone will be asking.
    • Digitize blueprints for all impacted or owned structures.
    • Are ACM books updated?
    • Scan important documents into a file share system. Even without house power, anyone can send a link from their phone nowadays, or just share with the account adjuster long before they’re ever needed.

Preparation sounds like a daunting task, and sure, it will take some time (and perhaps money) to ensure success. However, while there’s always hope that it will be time wasted, it’s much more likely to be time well spent.

This blog is the first installment in a series where our experts highlight actionable pre-event, event and post-event adjustment and reconstruction for public entities. Stay tuned for the second blog, which is coming soon.

Navigating the waters of yacht coverage

August 29, 2022

Share on LinkedIn Share on Facebook Share on X

By Revel Boulon, senior marine surveyor/adjuster and leader, yacht practice

While the word “yacht” may evoke images of leisure cruising and carefree living for many people, vessel owners know there is much to consider when it comes to protecting their maritime investment.

This is particularly true for those who sail to, or keep their vessels in, areas threatened by destructive storms like seasonal Atlantic hurricanes. A good-faith effort to prepare for catastrophic weather events before they happen can go a long way in helping yacht policyholders ensure coverage for storm-related losses that may incur.

The fine print

The language in yacht insurance policies providing hull and machinery coverage is notoriously specific, and adherence to policy wording is imperative. Many plans that cover vessels in zones likely to see hurricanes and other catastrophic weather patterns require approved named-windstorm plans as part of their application and include stipulations about the due diligence for which vessel owners are responsible in order to minimize losses associated with storm damage. For instance, are they prepared to quickly protect their vessel when a storm approaches by anchoring it, seeking safe harbor in a nearby marina, having the vessel hauled out and blocked, or properly manning it during the storm?

Being a prudent policyholder

In my opinion, and as is often shared with me by policyholders, some insurance carriers have unfairly earned a reputation for not covering yacht damage losses — especially those that insure higher-risk vessels or locations and therefore use the strictest policy language. However, in all my years as a marine adjuster and surveyor, I’ve found that most carriers in the yacht space want to provide a positive customer experience and help their policyholderswho act responsibly and prudently, even if vessel owners have technically violated the stipulations of their policies. This is particularly true in cases where storms have veered off the predicted course and unexpectedly hit other areas.

Here is a real-world example: Recently, the Sedgwick marine team supported a carrier client on yacht claims associated with a fast-moving, rapidly intensifying and erratic storm. This storm did not follow the course meteorologists thought it would and ended up doing the most damage outside the forecasted target area. This unpredictability left owners in the storm’s path scrambling to secure their vessels.

On behalf of the carrier, we met with the insured owners to assess the storm damage their vessels incurred and get a true representation of the protective measures they were able to take under less-than-ideal conditions. More important than uncovering that an insured didn’t follow their policy language to the letter, our client wanted to know that they acted like a “prudent uninsured” — the way they would have if they didn’t have yacht insurance and were personally responsible for any damage or loss.

Of that storm’s yacht claims we managed, the majority were approved for coverage. The carrier could have denied many more, reasonably arguing that nearly every policyholder had breached their plan language. However, they opted instead to give the benefit of the doubt to the vessel owners who showed they had acted responsibly and prudently amid unpredictable circumstances.

Policyholders can have confidence in every claim being handled on its own merit, with an eye towards prudent actions taken amid fluid circumstances leading to the loss. However, this good faith should not lead to complacency. Policyholders who are not prepared with the appropriate plans and locations on file with their carrier cannot presume that their misrepresentation will simply be overlooked due to some level of diligence in alternative preparations and securing arrangements. It is the sole responsibility of the policyholder to ensure that all information on file with their carrier provides an accurate and up-to-date representation of their true intentions regarding their vessel.

Preparing for hurricane season

The Gulf of Mexico, Florida and Caribbean regions — where much of our yacht practice is focused — are in the midst of Atlantic hurricane season. Carriers that offer yacht insurance policies, as well as the vessel owners they insure, should be planning now for what may come to those areas in the weeks ahead.

The erratic nature of the last few hurricane seasons has shown us to expect the unexpected. Despite continual improvements in weather-tracking technology, the trajectory, timing and intensity of storms seem to be harder than ever to predict. With so many variables at play, it’s not enough for carriers to advise insureds to keep their vessels out of certain areas at certain times. Before accepting a hurricane plan, a carrier must have a clear understanding of the plan details to determine their appropriateness and enforceability for the identified location and vessel. Additionally, helping insureds stay well informed leads to better preparedness and vessel protection.

Vessel owners should carefully review their yacht policies and submitted plans so they understand exactly what’s expected of them from a coverage, navigational limit, preparedness and personal loss standpoint. They should also be sure their plan information is current; people may forget to update their policies when they relocate, for example, and most yacht plans are location-specific due to varying risks. Policyholders need to have thoroughly researched named-windstorm preparedness plans — and backup plans — in place before disaster strikes so they can comply with carrier requirements, protect their vessels from storm damage, and demonstrate their diligence. It is always better to address these things before a loss occurs, rather than after the fact.

Caring counts

The Sedgwick yacht practice team is ready to take care of carrier clients and their insureds throughout hurricane season and beyond. Our marine experts are well versed in not only assessing damages, investigating claims, and reviewing policies, but also in doing the right thing for all parties and bringing a dose of empathy to difficult situations. We may specialize in property damage, but the human element of claims can never be forgotten.

Learn more — read about Sedgwick’s marine investigation.