It is hard to put a dollar value on the water damage caused by severe weather events.
Hiscox estimated the cost of insured damage caused by Harvey and Irma at between $50 and $70 billion, and the National Centers for Environmental Information put the cost of severe floods in Missouri, Arkansas and California at $3 billion.
Of course, water damage is not limited to superstorms but are more consistently caused by broken water mains or pipes, expired water heaters, ice dams or roof failure.
Effective inventorying of water-damaged sites is a skill every claims professional should have in their arsenal. Here are five handy tips to help.
Proper PPE will depend on the environment in which you are working, but can include goggles, hard hats, face masks, supplied air, gloves, Tyvek suits and booties. (Photo: P. Harman)
1. Safety first
Safety must always be your first priority when assessing water damage. Hazards include the risk of structural collapse, exposure to toxins (particularly sewage contamination and mold), an influx of rodents or other pests, and the risk of electrocution. Ask the policyholder to confirm the likely source of the water, and the height to which the water rose. This will help you to estimate the scale of the damage and the probability of contamination.
Ensure the safety of the policyholder and any third parties, and always use protective equipment. Your basic kit should include a facemask and eye protection. You may also need a full or half mask with respiratory filters, along with water resistant gloves and boots and a Tyvek suit. It pays to be prepared for any eventuality.
Collect whatever items can be saved, restored or cleaned. (Photo: American Technologies, Inc.)
|2. Save what you can
See if anything can be salvaged from the site. Non-porous items like glassware and ceramics can probably be saved. Hardwood furniture, some textiles, electrical equipment and appliances might be salvageable. Upholstered sofas, rugs or other soft items or furniture made of porous wood will probably have to be safely disposed of. That said, there are new industrial strength dry cleaning technologies today that can restore soft goods and hardware such as ceramics and consumer electronics.
Be guided by the value of the item, the cost of cleaning and restoration, and the risk to health. Even though a child's plastic toy is not porous, the potential risk of contamination is not worth taking.
Doing a claims inventory involves capturing photos of the damaged contents and writing down or creating a computer inventory of the items. (Photo: American Technologies, Inc,)
|Survey the site
Next, make a thorough inventory of all contents room by room with the policyholder. This will furnish you with a wealth of information, but may be upsetting for the homeowner. Be patient, and take your time. In CAT situations where deployment of claims pros may be stalled or delayed, self-service websites like HarveyContents.com or IrmaContents.com can go a long way to help claimants with inventorying, photo/video and receipt uploading, and generating the appropriate documentation for claims submission.
Collect as much information on each item as you can. Confirm the purchase price, brand, materials, age and provenance. Pay particular attention to high-value items, heirlooms, antiques, original artworks and soft furnishings. Specialty items can be hard to value. You may need to recruit external appraisers with domain expertise. Check whether any items have already been disposed of and if there are any articles the policyholder is desperate to keep.
This is also a good time to manage the expectations of the policyholders. Let them ask questions, give them a clear picture of the timeframes involved with the claims process, and exchange contact details.
It is important to document damage through photos, making it easier to prove the extent of the damage and what was affected by the weather event. (Photo: American Technologies, Inc.)
Document the damage
A site diagram is a great way of recording losses. Label the rooms using the names provided by the policyholder to make asking follow-up questions easier. Take photographs of everything from a variety of angles to catch useful information. For example, photograph a rug beside a tape measure to help you estimate the knot count. Highlight details that can help establish the value of an item later, like serial numbers and brand names. Remember that water-damaged items can be very fragile, so handle with care.
Related: 5 exotic contents claims cases
A thorough inventory of items will make it easier to identify what was damaged and assess a value to the loss. (Photo: Shutterstock)
|Collate, catalogue and classify
Organize items on your inventory into easy to manage categories. For high value items, you want as much detailed information as possible. For lower value goods, you can estimate a general figure for a class of item. For example, toiletries, cleaning products and food can be grouped together and a general estimate made. Designer clothes may merit individual valuation, but an estimated value may be sufficient for a closet of children's clothes.
Documenting lost possessions in the aftermath of a catastrophe like Harvey or Irma may be the last thing people feel like doing. But this daunting task must be completed not only for claims purposes but for cases where the claimant wants to receive a tax write-off for uncovered losses. Effective inventorying of water-damaged contents will make the claims process faster and less painful for all parties, making your job as a claims pro a whole lot easier.
Joel Makhluf is a vice president at Enservio and the director of the Property Innovation Summit, the insurance industry's premier thought leadership conference. Enservio is a leading provider of contents claim management software, payments solutions, inventory and valuation services for property insurers. Contact him at [email protected].
Related: Handling high-value fine art claims
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