Tornadoes in Mississippi, Alabama and Louisiana in April caused catastrophic damage to homes (between 200-300 homes in one city alone) and at least seven deaths – a reminder of the devastation and havoc that these twisters wreak.
Through May 2020, 73 people have perished in tornadoes, the deadliest year for the storm in the U.S. since 2011, according to the Insurance Information Institute (Triple I).
It’s not only imperative that insureds understand what to do to before a tornado makes landfall but that you, as their insurance agent/broker, help them navigate the challenging road ahead. RPS producers Patti Ford (Sr. Underwriter/Broker – Oklahoma) and Jana Anderson (Area VP & Broker/Underwriter – Oklahoma), whose homes were destroyed by tornadoes, along with RPS National Claims Manager Midge Chagnard, explain how to help clients as they go through the claims and recovery process:
1. Take Measures to Mitigate Further Property Damage
Advise clients to take measures to protect their property against further damage if possible, and to document all damage before mitigation begins.
“Protective measures include putting a tarp over the roof and boarding up windows. Be sure to keep receipts for any measures taken to protect the property,” says Anderson.
2. Report Property Damage Claims Immediately
“Obtain loss details from the insured, including contact information, known damages and, if more than one property is involved, clearly document this on the loss notice,” explains Chagnard. “File the claim immediately, and advise the insured of when the claim was filed. If possible, provide the claim number, adjuster information and next steps.”
3. Explain How Loss of Use Coverage Works if House Is Uninhabitable
If the damage from the tornado has made the insured’s home uninhabitable, talk to your client about moving into a hotel or a comparable temporary house. With a homeowners (HO) policy, the client will have loss of use coverage to help pay for additional living expenses.
“Explain how the coverage works and that the client should keep all receipts including hotel room and restaurant charges. In some cases, the relocation period can last for months while the home is rebuilt or a new home is purchased,” notes Anderson. “In my family’s case it took 10 months before we were back home. We needed to find a temporary house in the same school district so my son could ride the bus to and from school.”
Ford stresses how important it is to underscore that insureds should begin looking for relocation options immediately, particularly if an area is hard-hit, as lodging fills up quickly.
“You have to find new lodging until the claims are paid and new homes could be built or bought. This was difficult in my situation because thousands of homes were lost so lodging was scarce. A local agent can be a valuable resource in this area,” she says.
4. Make Sure Claims Adjustor Visits the Property Before the Restoration Company
Anderson recommends that, if possible, clients should arrange for the restoration company to enter the damaged house or garage AFTER the claims adjustor has been to the home.
“This will make the initial inventory process for the adjustor much easier (depending on how much damage the home has sustained),” she explains. Prior to the restoration process, insureds should get rid of anything they don’t want.
5. Use Trusted Contractors
Catastrophic events can bring out unscrupulous contractors ready to take advantage of victims looking to put their lives back together. Reinforce to clients the need to use local, licensed, bonded, and insured contractors. Tell them to keep a log of all communications with the contractor and document the repair work as frequently as possible. They should ask for and check the contractor’s references. The contractor should be aware of how insurance claims are handled and be prepared to accept payment as it comes in from the insurance company.