Using technology to inventory contents after a disaster

In the aftermath of a loss event, both the insured and the insurer may face the dreaded pack-out — moving all contents off site for evaluation and allowing room for structural repairs. In reality, pack-outs can cover a range of functions: creating contents inventories; sorting; deciding which items can be salvaged; transporting items to specialists for repair, cleaning and disinfecting; finding replacements for non-salvage items; calculating a cash value for non-salvage contents; testing items that have been repaired; and finally re-packing and transporting contents back to the premises.

With so many variables to juggle, it is easy to understand the temptation to declare a total loss and offer a cash sum for reinstatement. However, if pack-outs are handled correctly, they can save insurers millions and allow the insured to keep a much higher proportion of their property. Handled badly, pack-outs can be a disaster to rival the loss event.

Related: Insurance coverage and clean up expenses

The scale of the problem

In the past, the daunting task of creating an inventory was often left to the insured or a beleaguered adjuster armed with a camera, pen and paper. Few people could accurately list the contents of their home or office while surveying the wreckage caused by a loss event, and suggestions that the insured keep a notepad handy for jotting down items they remembered only added more stress at an already trying time.

Adjusters often have to triage contents immediately. This is a difficult task and specialist input is often required to determine whether an item is salvageable, and what repairs will cost. Adjusters then have to weigh repair costs against replacement costs and the amount of coverage, while taking into account any special circumstances such as sentimental value. Consistency in approach is almost impossible to achieve.

Historically, many items which could be repaired were abandoned as a total loss. The adjuster then had the task of hunting for replacements at the best price, or determining a payment value that would protect the insurer’s bottom line but sufficiently meet the insured’s expectations. Prospects for repair and restoration have massively improved, but insurers must exercise care in choosing which companies they partner with, as items still have to be efficiently inventoried, packed, transported, stored and returned.

Even items that have escaped damage can cause a major headache if handled incorrectly. We have all heard horror stories about antique furniture warping after being wrapped in plastic, or fine wines losing half their value following damage to their labels. Then there are the items which simply disappear into a maze of warehouses never to be seen again, or those that are returned to the wrong address.

Technology to the rescue

A decade ago, property was the last frontier for investment in technology and innovation, but everything has changed. Cleaning and restorative technologies have significantly increased what can be restored, thereby reducing non-salvage replacement. Cloud-based technologies have revolutionized contents management. Smart devices can read bar codes to capture and record contents accurately and quickly. Digital photographs of the loss site can be supplemented by comments and repair quotes from on-site or off-site specialists. Information is fed directly into the cloud where it can be easily accessed 24/7. The insured can go online in real time to answer queries, submit additional information, and check on the progress of the claim.

Going to the cloud can increase the speed of a pack-out by at least one-third. Once items are entered into a contents management system they can be tracked, giving up-to-date information on the status of repairs and the location of the insured’s possessions. The insured can then go online to request the return of a specific item, and the contractor can locate it, usually within minutes, and arrange for its return, or make it available for pick-up by the policyholder.

Specialists’ input has significantly reduced the number of non-salvage items for the average claim, but it remains the area most likely to cause friction with the insured. Again, technology can ease this burden. Applications are now available that can match non-salvage with like, kind and quality (LKQ) replacements. The next stage of evolution is the adoption of AI solutions to manage the replacement of non-salvage items offering further increases in efficiency in time and money.

Many of these applications are still new to the market. As the quality and quantity of data grows, new insights and applications will offer increased efficiencies and improved service. Contractors who leverage the wealth of data provided by contents management applications to handle this thorny problem stand to maximize both their profits and customer satisfaction.

Russell Jacobs is the quality assurance manager for ECONA Network, North America’s largest full contents restoration network with over 265 certified service locations. A third-generation drycleaner who grew up in the family business in Memphis, Russ has 25 years of experience in contents restoration. Contact him at russ.jacobs@econanetwork.com.

Some software companies offering some, or all, of these features:

iCat Modern Contents Management:  https://www.icatcontents.com/

Contents Track:  https://www.xactware.com/en-us/solutions/packout/contentstrack/overview/

Assured Packout:  http://www.assuredsoftware.com/products/assured-packout

Encircle:   https://encircleapp.com/