Re-opened Hurricane Katrina claims speak to overworked adjusters: BestWeek

Re-opened Hurricane Katrina claims demonstrate what can happen when an overwhelming catastrophic event causes beleaguered adjusters to bite off more than they can chew, according to a report by A.M. Best/Week.
The May 17 BestWeek article, ‘Katrina Claims a Lesson for Adjusters,’ does not contain any specific figures showing the number or percentage of re-opened claims. According to March 2010 Insurance Information Institute figures, cited in BestWeek, Hurricane Katrina in 2005 has thus far resulted in total insured losses of $41.1 billion.
The article does contain interviews with a number of U.S. industry analysts who observe that Katrina claims are being re-opened because insureds are invoking the appraisal clause of their policies.
“The reason we are seeing so much of it, a lot of it goes back to bad adjusting work,” Drew Powell, general adjuster and manager of Davidson & Co. Inc., is quoted as saying in the article. “The job wasn’t done correctly in the first place.
“I’ve reviewed files that have gone to appraisal where I’m not convinced that the original adjuster ever got out of the car.”
An overwhelming workload meant some adjusters were quite simply taking on more work than they could handle, the article notes. Some firms were hiring inexperienced adjusters to handle the work, while other firms were not paying enough compensation.
Overworked and underpaid, some adjusters let some of their work slip through the cracks. Powell said he guesses that of all the files he’s seen that have gone for appraisal, roughly half of them would not have gone to appraisal “had they been handled correctly in the beginning.”
The article points to the need to make sure pre-disaster planning takes into account exactly how many adjusters are required to handle a catastrophe of that magnitude.
Also, the article points out, adjusters and carriers should make sure their staff members are experienced and competent in handling so many claims files at once.