2005 Hurricanes from 2 sides
Date: 3/18/2006Contact: Joan Barrett/800-690-0070
Doug Dean watched the aftermath of the hurricane’s wrath on television with a sick feeling for the victims of the storm. He gave blood and made a donation to the Red Cross, but until he saw an ad seeking Field Inspectors for the Small Business Administration, he didn’t feel like the gestures he made were going to make much of a difference. Since he left Sacramento early in September, Doug has worked for the SBA 10 to 12 hours a day, 7 days a week- with only a short time off at Christmas to visit his understanding wife in Sacramento. This is a normal schedule for the people that labor for the government agency that offers low-interest loans to victims of a disaster that have no other resources to get back on their feet and back into their damaged homes. Even for those with insurance coverage, the Main Catastrophe Deductible of some policies raises the deductible to a percentage of the value of the home. In some cases, the escalating property values have created a hardship for some people who couldn’t afford the deductible amounts and the SBA can help with people in that situation with a low interest loan. Doug says “It’s a very positive experience to work for a government agency that really has their act together and is able to offer assistance with dignity for the people that they help.”
He wasn’t sure of the circumstances that he’d find himself in, but several pre-departure purchases proved invaluable in traveling through the debris littered landscape. He appreciated his puncture resistant; water and chemical proof boots and he found that an ice chest not only was luggage acceptable to the airlines, but also held ice and lunch later in the trip. His digital camera was also a necessity. A GPS unit was another purchase that proved helpful in strange territory and one he’d recommend to anyone heading into unfamiliar areas as well as a mapping program for the laptop. Right after a disaster like the hurricanes, Doug warns travelers to be prepared for even the most basic necessities like food, water and cash. He found that the ATMs were not operating in most areas and adequate cash was a must. Doug likened the situation to urban camping with all the requirements of a wilderness experience.
Upon arriving in Texas, the closest he could get to his New Orleans’ assignments, Doug found accommodations but some without power and hot water initially. He moved 7 times to improve his access to the people he needed to contact. In a seller’s market, he found that the room rates did not necessarily reflect the degree of rustic living they offered.
Doug says that he found most of the people he encountered were uncomplaining and grateful for the assistance they were given, although some were frustrated by time the insurance companies needed to contact the policyholders and settle the claims. He acknowledged how difficult it is to reach some of these people who had been evacuated to cities all across the country, but even some who had stayed in the area were waiting for communication from their insurance company representatives months after the storm. The enormity of the damage is difficult to comprehend, Doug says, where one could drive for miles and see nothing but damaged and abandoned houses. Even worse were the damaged homes that were still occupied by their owners with no other options.
After several months in the gulf coast, Doug was reassigned to South Florida to work on his own with hurricane victims there. The devastation there was less severe than in Louisiana because of the Florida construction codes enacted after the previous costly hurricanes. In Florida he found mostly roof damage and none of the flooding that impacted the gulf region.
A few days after the devastating hurricane roared through New Orleans, Doug Dunkly of USAA was deployed to the region and would remain there for 5 months. He worked in the field and for this experienced CAT and field adjuster the length of time away from home, while difficult, was a little inadequate for the best customer service. Doug is, and has been consistently during his 30 years as an adjuster and claims manager, concerned with customer service. He feels that a 6-month time standard for CAT duty would improve customer service and reduce customer complaints.
The controversy around the ‘wind versus flood’ losses will remain, in Doug’s experienced opinion, an issue for the balance of 2006 and probably into 2007, with some litigation going into a 3 to 5 year period. Most of the smaller claims will require claims adjustment activities through this year. He says that the progress, is steady and expensive.
When asked for an opinion of the possibility of reclaiming New Orleans Doug says “ Rebuilding is possible with significant code requirement changes and elevating building within a mile of any levee for example and realizing that planning is an essential ingredient. The number one requirement for rebuilding is dollars with a commitment to stay in the area a close second.” “ Is it the end of an era? Not really. There is a detrimental effect for the loss of human resources; however a noticeable remnant of the whole culture is in evidence. The clear majority of the unique European architecture is virtually in ‘near pre-Katrina condition.”
Doug was pressed to share his thoughts on improvements to the infrastructure that the unprecedented hurricanes of the last two years have made evident to him after working with the policyholders in the field. “I would improve, at great expense, the levee system surrounding both the City of New Orleans and Lake Ponchartrain. I think it is essential to elevate the buildings within the flood zone. There should be, in my opinion, a tax deduction or credit to businesses and homeowners that commit to a minimum of 5 years in the area. Every US citizen should be encouraged to spend money in Louisiana, either by giving money or coming to vacation. Volunteer time to help out the needy and/or uninsured would be a good use of time. U.S. religious leaders should be encouraged to re-direct mission campaigns to the region for 2006 and 2007.”
“In addition,” Doug went on, “each insurer must self examine separating non-CAT claims handling from CAT claim handling, that is, provide replacement cost benefits a personal property. maybe offer 67% of policy limits upfront on total losses. Also, allow dwelling replacement benefit if the homeowner or business owner rebuilds somewhere else in the same state as their damaged property. An increase in policy limits or policy allowance for debris removal would be helpful.”
Doug further suggests for insurance carriers “an in-house brainstorming forum between now and June 1st involving CAT participants to review the Katrina CAT and its own processes on at least the following topics. First, plan to improve initial response time, post hurricane. Then, examine staffing by doing a cost benefit analysis of hiring independents versus the use of staff. If using staff, what should be the minimum time commitment? Also, determine the authority level for field adjusters. Further, streamline ‘file’ requirements and provide a 24 –hour phone center unit for at least 60 days following a major event staffed by trained and experienced adjusters.”
“In the case of Katrina and the other hurricanes, it was imperative to bring in adjusters from around the country to handle the vast scope of damage. Insurers who do not have a full time or designated CAT team may wish to review the cost benefit of such a program. I’d suggest at the very least to deploy personnel who can stay on site a minimum of 4 months and as I’ve said before, 6 months would improve customer service and reduce customer complaints.”