As weather events becomes more intense due to climate change, droughts, flooding, wildfires, tornadoes and high winds are happening more frequently. These events can pose a greater risk to policyholders.
In some ways, Nebraskans are still recovering from the 2019 floods.
This spring, extreme drought and high winds fueled wildfires that burned thousands of acres, leaving some volunteer firefighters injured or even killed.
Now, we're entering peak tornado season in Nebraska.
In the May issue of Independent Agent magazine, the Big "I" published a feature story telling how agencies can help their clients put the pieces back together after a catastrophe. Read the article below!
On Aug. 29, 2021—the 16th anniversary of Hurricane Katrina—Category 4 Hurricane Ida made landfall twice—first in Port Fourchon, Louisiana, and two hours later in Lafourche Parish. Bringing winds of 150 mph, heavy rainfall, flooding, storm surges and tornadoes, Hurricane Ida caused 82 deaths, according to ABC News.
“We had over 16,000 claims that we had to take care of,” says Nolan Louque, co-owner and CEO at Riverlands Insurance Services Inc. in LaPlace, Louisiana, one of the areas hit hard by Ida.
“A lot of clients were impacted by the hurricane and didn’t have internet or electricity,” says Donna DiCarlo, co-owner and president of Riverlands. “Clients would walk up asking for their claims to be turned in. We reported their claims and even took claims for another agency as a courtesy because they weren’t up and running as fast as we were.”
“We also had bottled water and snacks to hand out to clients,” DiCarlo continues. “Our towns were destroyed and our clients were devastated. They were in desperate situations.”
The agency didn’t escape unscathed either. Due to damage to one of the agency’s locations from the hurricane and to another from an ensuing tornado, “we had to work out of Donna’s father’s garage,” Louque says. But despite the storm’s damage to the agency’s physical locations, “We were able to get to work the next day,” Louque says. “We were ready and prepared and could start being there for our insureds.”
More than 14.5 million homes—about 1 in 10 homes in the U.S.—were impacted by natural hazards in 2021, according to CoreLogic. Last year, insured losses from natural disasters “again exceeded the previous ten-year average, continuing the trend of an annual 5-6% rise in losses seen in recent decades,” said Martin Bertogg, head of CAT perils at Swiss Re.
As catastrophes increase, the “it will never happen to us” fallacy is becoming more and more unfounded. The U.S. is faced with more frequent and more damaging natural disasters, and those moments, days and months after an event can bring out the best in an independent insurance agency—if it’s prepared.
Here’s how independent agents across the country have steered their clients and communities through the aftermath of catastrophes.
Storm Warning: Preparation Before a CAT Event
Riverlands was not caught unprepared by Hurricane Ida. “We’ve been in business for over 50 years,” Louque says. “Over the experiences that we had with the pandemic, with water claims, wind claims, hail claims—we’ve been through it all.”
The agency has a four-pronged system to prepare for hurricanes: companies, clients, employees and infrastructure. This is put into action every April 15, which is about six weeks before the beginning of hurricane season.
“We start by calling the companies to get contact information for the CAT manager and the adjusting firms they’re using,” DiCarlo says. “We gather phone numbers, email addresses and protocol for turning in claims. It's important that we confirm with them who's the owner, what phone numbers are they going to use, who is our media contact, and who are the top company executives we can get in touch with day or night.”
“With clients, we reach out on April 15 to remind them that June 1 is hurricane season. Getting prepared is the message and you have to do it now,” DiCarlo says, explaining that the agency provides clients with preparation tips, including making a video home inventory.
For employees, “we confirm cell phone numbers, their spouse or next point of contact, we ask them to bring in their equipment for updates in case we need them to work from home, and we have a robo-call system that will let them know what location to report to in a catastrophe,” DiCarlo continues.
The fourth prong is infrastructure. “We start checking hurricane buildings, hurricane shutters, generators,” she says. “Our generator runs once a week. We stock up on water for employees and clients as it gets closer.”
“We have to make sure we have bathrooms and water for people if it comes down to that,” Louque adds. “So we have our own cistern system in the back.”
“Having a good disaster recovery plan is first and foremost,” says Roy Riley, president and CEO of Peel & Holland Insurance in Benton, Kentucky. “Our agency always lives by the mantra that ‘When times are their worst, our clients expect us to be at our best.’”
When tornadoes plowed through Kentucky in December 2021, taking 80 lives, Peel & Holland needed to be at its best. “We’ve had prior experience with catastrophes, just none as significant or as damaging as those tornadoes,” Riley says. “We had more than 200 clients receive significant damage, about 60 of which had total losses.”
“We have a contract with an outside vendor that helps us with power, space, connectivity and computers,” he says. “We also have multiple locations, which is very helpful. Four were within 30 miles of the primary disaster in Mayfield. One of those four remained with power, so that became our client service center the first weekend. Our office in Mayfield was a complete loss from the tornado.”
It’s crucial to work ahead of claims to help clients be made financially whole, says Jim Armitage, commercial lines marketing manager at The Liberty Company Insurance Brokers in Woodland Hills, California. “We’re helping customers do simple things like go into every room and take pictures on their smartphone,” Armitage says. “During a disaster, people don’t remember all the things they have. It also helps make sure folks are adequately covered.”
“There are two major kinds of catastrophes that we have experienced,” he says. “One is wildfires, which are all over the state and have been really devastating. The other is earthquakes—we’ve had two major quakes in my lifetime, and while we’ve had others more recently, there hasn’t been any widespread damage.”
Another key factor to have in place before a CAT event is correct coverage. “Underinsurance turns into a nightmare,” Armitage says. “You might think that you can add a cost increase endorsement of 25%-50%, but if you have a hundred homes that burned to the ground in a particular area, you don’t have the number of contractors you need, you don’t have the building materials, so the prices for making repairs go through the roof.”
“I had a customer that took two years just to start rebuilding after a catastrophe,” Armitage adds. “Thankfully, the policy was a blanket policy. The cost to rebuild the house doubled even after just the two years.”
“Pre-CAT emergency and disaster recovery planning are critical components of a comprehensive risk management program,” says Walt Sykes, head of middle corporate business, North America, Swiss Re Corporate Solutions. “Test the plan periodically to validate effectiveness and augment it where needed so the plan remains current.”
In the Aftermath: Response After a CAT Event
On Sept. 8, 2020, the Alameda Fire swept through the Rogue Valley in southern Oregon. It caught many by surprise.
“I’ve been in insurance for over 36 years now, and we’ve never had a catastrophe like that,” says Lloyd Williamson, partner at Protectors Insurance in Medford, Oregon. “There were more than 2,600 homes and businesses that were completely burned down to the ground. We had over 100 total losses just in our agency.”
“One of our clients is the school district that was in the middle of all this,” Williamson continues. “Thank goodness the school did not burn, but it got across the street from them. We were in contact with them, trying to figure out where all the kids were. About a third of the student body’s homes were completely burned.”
Despite the chaos impacting the community—including staff—here are four ways agencies can step up to up to help clients in need and process their claims after a disaster:
1) Reach out to clients. Technology enabled Peel & Holland to quickly locate clients who needed their help. “We used our computer systems and the ability to query our client list to quickly determine who was in the path of the tornado through mapping and started to reach out to them proactively,” Riley says. “Not just by phone but by getting in the truck and going up and down those areas.”
“There are so many tools across the industry that help with CAT claims,” Sykes says. “First off, there is online data storage for inventory management and tracking of critical assets. There is also geo-coding and mapping of assets. This technology can help with pre- and post-loss imagery as well as to gain insight on assets that are actively in or subject to natural catastrophe exposure.”
“Good technology and access to information is something that helps us to not only be proactive but to service our clients,” Armitage agrees. “There are apps that allow people to contact the insurance company and make a claim. Then we get notified through claims download, after which we divide out the work in our claims department.”
2) Have a system for handling claims. “One of the things that allowed us to put in 16,000 claims in just a few days is using a staggered approach,” Louque says.
“You have to be on hold for such a long time to report a claim during business hours,” DiCarlo explains. “But we learned that systems were up 24 hours a day and you wouldn’t have to wait as long on hold if you call at odd hours such as 1 a.m. Additionally, internet and mobile hot spots were slow during the day, but in the early hours of the morning there wasn’t as much demand for connectivity, so it was quicker to submit claims then.”
After the Alameda Fire decimated surrounding towns, “we immediately knew our entire staff had to be involved,” Williamson says. “We took calls and claims, put them into our systems and delegated them to staff members. We had a set schedule to contact each claimant, so nobody fell through the cracks.”
A community-wide CAT event can inundate an agency with claims. For Riverlands, it was a lesson learned.
“I guess you can say Donna and I are from the old school—we want to make sure the client comes into the office, we want to talk to them, educate them, walk them through the process,” Louque says. “However, that process for 16,000 claims isn’t the best for clients.”
“Now, our approach is to get them prepared ahead of the catastrophe and give them the phone number they can directly call for claims,” Louque says. “We thought we were helping them by taking their info and walking them through. But by calling the company directly, they can get their claim turned around a lot faster.”
“They need us more after the claim is turned in, not the initial claim,” DiCarlo says. “Anybody can turn in a claim, but afterward they have a million questions about the process, especially if it’s their first. What they need from us is guidance through that process.”
3) Help clients be the squeaky wheel. “Once we had the claim set up, we then set up a strategy to contact each one on a consistent basis,” Williamson says. “It would just be a short call: ‘How’s it going? Has the claims adjuster been in touch with you? Do you have any questions? Can we direct you to the CAT team where they can write you a check so you can buy clothing? Can we provide housing and food?’”
“All the claims were put into our agency management system and tagged for the type of claim, and then we created an activity for a specific time to follow up,” he adds. “Then we noted when each person had been contacted and when carriers got in touch.”
An independent insurance agency shines in the follow-up and consultations to help clients navigate the claim, Armitage says. “The squeaky wheel gets the oil,” he says. “If there’s something we perceive as not moving along as quickly as it should, we’re going to be proactive to nudge the claim rep to move it along. We also intervene when there are differences of opinions or difficulties.”
“The whole consultative part of this is incredibly important,” he adds. “Most of these folks have not gone through this before.”
As many agencies have turned to video proposals and prospecting, Riverlands turned to video to handle the influx of calls. “We were getting hundreds and hundreds of thousands of calls asking, ‘What’s the next step?’” Louque says. “So, Donna and I got in front of a camera, shot videos and used our systems to reach our clients and answer those common questions—how they can be prepared, what’s the timeframe, when are certain steps supposed to happen and other items like that.”
4) Support carriers on the ground. Agencies often become the community hub after a catastrophe and are normally on hand to help company partners. As carriers arrived on the ground after Hurricane Ida, they situated themselves in Riverlands’ building or in RVs in the parking lot.
“The carriers helped clients and cut checks on the spot,” DiCarlo says. “With RVs and insurance company employees on our premise, we were able to direct clients to talk to their particular company who had check and claims authority. That was so important as they received immediate help, so our employees weren’t taking care of those claims.”
Carrier support is crucial, Sykes affirms. “You want to make sure that your insurance carrier has CAT-readiness units available to help expedite claim handling by sending teams of professionals to an area ahead of an anticipated CAT event, so they are ready to quickly organize and respond,” Sykes says, pointing out that technology has allowed carriers to have a presence in an affected area quicker than ever.
“The introduction and advancement of drone technology has been immensely helpful for CAT claims,” Sykes adds. “After a disaster, the impacted area is often closed until personnel can safely enter, but drones can be utilized to make early assessments of the damages.”
Riverlands housed adjusters in its office and ensured they could focus on their jobs. “We want adjusters out in the field, we want them pounding the ground, taking care of our customers,” DiCarlo says. “We do what we can when they come in to get some desk work done—if they need to eat, take a shower, sleep a little, we have those capabilities.”
Culture and Customer Service
When clients have lost everything, compassionate customer service is key for agencies.
“Many of our clients had family members or friends that didn’t survive,” Riley says. “Having the empathy to understand their world will never be the same and being able to be a sounding board and a shoulder to cry on is one of the biggest things we can do.”
“And then we give them that confidence that we’re going to take care of them, we’ll be proactive on their behalf and guide them every step of the way,” he adds.
“The families who lose everything are devastated, to say the least,” Armitage says. “As you talk to them, they’ve just got so many things happening and they’re so overwhelmed.”
To consistently focus on helping clients, putting in the work ahead of time to maintain agency culture is essential.
“We are always focused on culture,” Riley says. “Our culture has been purposeful for many years, with five core values that our team can recite. All of those build what we expect for our client experience, which is never more important than in those critical times.”
“I have a great team,” he continues. “They were literally on the streets in Mayfield at daybreak, on site helping clients dig what they could out of the rubble.”
Even as they served clients who called in upset or angry, “a lot of our employees had lost everything or had a family member who lost everything,” Louque says. “We could understand where that frustration was coming from, because we could look up and see a hole in the ceiling over our own heads.”
“We had employees who, instead of being at their homes rebuilding, were at the office because they wanted to help the clients—because they knew exactly what the clients were going through,” DiCarlo says.
Nurturing agency culture also means maintaining a focus on actionable lessons. “We kept our culture and attitude positive after the storm,” Louque says. “We held a round table and asked, ‘What can we do better? What did you all see that we didn’t see?’ We also reached out to our local parishes and asked about their strategies and what equipment they use when the internet goes down.”
For Protectors Insurance, “our culture changed after the fire,” Williamson says. “We acknowledged that we really need to dive into all the scenarios related to policy content and convey that to clients—asking the difficult questions and addressing the coverage that most other agents don’t. That’s important in our culture now.”