Burned palm trees line the road in Lahaina in the aftermath of the fire. Photo: Sedgwick

In the weeks since devastating wildfires swept across more than 2,500 acres on the island of Maui, owners, renters, businesses and insurers are beginning to assess the damage incurred. At this point, 115 deaths have been confirmed and the FBI reports that at least 388 people are still unaccounted for on the island. Lahaina suffered extensive damage and residents will likely spend years rebuilding. Access to supplies and the challenge of moving them from the mainland to the island will increase rebuilding costs and add significant delays to any recovery efforts. In addition, resources available on Maui and the surrounding Hawaiian islands are extremely limited, which will also affect efforts to even clear debris, let alone rebuild. Anthony Nelson, a restoration contractor who lives on the island, detailed what he's seen and heard in a recent Facebook LIVE event with Cleaning & Restoration magazine editor, Michelle Blevins. Nelson said there are only five restoration companies on the island and that much of the infrastructure is old (pre-1985 or older). He said that dozens of structures burned to the ground and it was not unusual to have a completely intact building next to one that was totally destroyed. "There were lots of uninsured properties in the communities that burned," he shared. Some homeowners owned their houses for 20-30 years and didn't have insurance, while others were woefully underinsured. "It will also be hard to get building materials and supplies. It's hard to get materials to Hawaii under good conditions," he continued. "If you don't buy at a big box store, it's 6-8 weeks to get cabinets and other supplies." He said he couldn't begin to speculate on how long it will take now. |

Putting a price on the loss

In order to make it easier to find enough adjusters to process the numerous claims following the wildfires, the Hawaii insurance commissioner has authorized nonresident independent adjusters to provide temporary assistance. According to ALM's FC&S Expert Coverage Interpretation, nonresident independent adjusters must: |

1. Provide a copy of their current license in another state with licensing requirements similar to those in Hawaii statute HRS 431:9-222
2. Within three working days of the nonresident adjuster starting work, the insurer, independent adjusting firm or producer using the nonresident adjuster must provide on company letterhead to the insurance commissioner the nonresident adjuster's name, the individual's Hawaii mailing and business addresses and phone numbers, as well as the nonresident adjuster's permanent home and business addresses and phone numbers.

Violations of the regulation could result in a civil penalty of up to $5,000 per violation. (More information is available here.) Even with more adjusters on the island, reaching out to policyholders to assess the damage is difficult. "With significant losses to infrastructure, telecommunications and internet services, reaching policyholders has been challenging," explained Dereck Driggs, regional manager/executive general adjuster at Sedgwick, in an email interview. "One of the most effective practices we have seen is personal lines carriers electing to deploy their own staff adjusters to Hawaii as their primary adjusting resources for these losses, and then allocating the excess mainland claims to their claims adjusting vendor partners. Commercial lines carriers on Maui fire losses are more reliant on their claims vendor partners due to the complexity of the situation." When reporting their losses, policyholders should provide their insurer with their name and address, and the policy number if available. Driggs advises insureds to contact their agents if possible and to file their claims right away through their carrier's claims department. "Providing your insurance company with your first notice of loss is the first step in getting reimbursed for covered losses. For renters and homeowners, the additional living expense portion of their policies is available almost immediately following a fire. During this time, it is also important to keep receipts and document additional living expenses, such as accommodations costs, additional travel expenses, and atypical meal expenses to ensure repayment for out-of-pocket expenses that are covered by an insurance policy." Driggs says that getting access to the sites has been their biggest challenge. "Some residents and business owners have been allowed back, but there are still areas within the commercial side of Lahaina that remain closed due to ongoing search and recovery efforts. Displacement is also a major challenge, with housing availability critically impacted. Additionally, the loss of business combined with tourism making up about 40% of Maui County's GDP will have a compounding effect on the area." Companies and teams arriving to work on the island have a number of priorities. "This is still very much a rescue mission, so first responders are crucial at this time," describes Ken Tolson, global president, network solutions for Crawford & Company in an email interview. "Out of the 2700 structures exposed in Lahaina, 86% were residential, so the housing of the displaced families has been a high priority as well." Tolson also shares that "Crawford has a small team that lives on the island, and thankfully, they are all safe. We are mobilizing our local team, as well as staging adjusters from other areas in Los Angeles to begin the recovery work when conditions permit. Right now, we are focusing on being respectful of how those affected are dealing with the trauma while opening the lines of communication between policyholders and our adjusters." As adjusters begin assessing losses, Tolson explains that Crawford is using a number of innovative techniques to get a general idea of the scope of the damage. This includes using MAXAR's High-Resolution Satellite Imagery and NASA's Visible and Infrared Scanner. "While satellite imagery is a valuable component to assessing the overall event impact, establishing the 'ground truth' with personnel on location provides the granular detail we need to assess claim value and severity." Driggs says that Sedgwick's adjusters are working with both officials and people directly affected by the fires. "Significantly, we are seeing a surge in business interruption claims — which our team of forensic accountants are on-hand to support — related to disruption in ingress and egress across the entirety of Maui County. Even the businesses not destroyed by the fires are feeling the negative impact." The role of adjusters in these losses cannot be underestimated. The importance of personal contact as residents move through one of the worst times in their lives takes on even greater significance. It's more than just assessing the cost of the contents or the value of a business interruption claim, but offering hope and a listening ear. One customer said to Driggs after spending time with him, "I can see Aloha in your eyes!" The slideshow below features images taken across Maui and Lahaina in the aftermath of the wildfires. |

Finding answers

The cause of the wildfires is still under investigation, but multiple factors seem to have come into play including drought conditions on the island, the hurricane-force winds from Hurricane Dora, downed power lines and an aging electrical grid. As investigators continue to search through the rubble, multiple lawsuits have been filed against the Hawaiian Electric Company, which recently released a statement admitting that its power lines started one of the Maui wildfires. However, the company says that its lines in West Maui, where the second fire started, had already been de-energized for several hours and could not be the source of ignition. Instead, the company says the fire was reignited when high winds carried embers from an earlier fire thought to have been extinguished by the Maui County Fire Department across a field. This was the fire that decimated much of downtown Lahaina. Moody's places damage estimates from the fire at approximately $6 billion in economic losses. Disaster risk modeling company Karen Clark & Company puts insured property losses from the Lahaina fire at $3.2 billion, however, this number does not include uninsured losses. At least 2,500 acres burned and over 2700 structures in Lahaina were damaged. Related: As lawsuits mount over Maui wildfires, Hawaiian Electric hints at defenses Tips for avoiding shady contractors following a wildfire & other disasters Insured Maui fire losses likely to top $1 billion