Preparing Policyholders for Catastrophic Events

By Tara Kelly | June 21, 2021

In 2020 alone, Aon estimated that insured property losses from natural disasters in the U.S. climbed to around $74 billion in losses, much higher than the 10-year average. The only year that beats 2020 in terms of losses is 2017, with three major hurricanes recorded impacting the U.S. mainland and territories.

Climate-driven catastrophes caused by extreme temperatures and droughts, like the deep freeze Texas experienced this year, seem to be increasing. But the random distribution of these catastrophes from one year to the next demonstrates how hard they can be to predict, even by experts.

We don’t know what the rest of 2021 will bring, but the hard freeze in Texas in February has already been estimated to cost a record $90 billion — and that’s just one single event. We’re also learning that most of those losses could have been avoided, according to Enki Research disaster modeler Chuck Watson, who says that about 90% of the damage could have been averted with preventive actions.

The situation in Texas, and arriving spring weather, should be a wake-up call for agents. While we don’t often know what tomorrow holds, proactive communication with policyholders can ensure preventive measures are in place to prevent losses, improve the customer experience, and — most importantly — save lives. Here are four tips that agents can use to prepare policyholders for catastrophic events.

Reach out early to confirm basic information and preferences. To lay the groundwork for successful catastrophe communication, contact policyholders early and often to make sure you have up-to-date information, including whether a residence is a primary or secondary home. Make sure your list of mobile numbers, email addresses and preferred communication channels is current, and ask for customer opt-in for ongoing digital communication.

Make the outreach relevant to customers by offering something of value in exchange, including information and tips on how to stay safe and how to file a claim.

Provide mitigation and prevention to reduce overall losses. Offering specific mitigation and prevention programs for the most common or high-spend catastrophe claims helps to reduce overall losses from natural disasters and catastrophe events. Providing an option for those eligible to properly secure or protect their assets will make your insured feel valued and safe while also decreasing the severity of claims from a disaster.

Tailor the information you provide to the customers’ risk exposure, i.e., tips on wildfire mitigation for people in vulnerable areas, including coverage for flame-retardant sprays to protect homes or safe storage tips.

Communicate when a catastrophe is imminent. If a storm or other natural disaster threatens, let policyholders know how best to be prepared and what you can offer to support them.

Offer tips on how to document property and possessions for claims and give policyholders an overview of how you’ll respond to help them, including how to reach out to file claims, reminders about coverage amounts, anticipated wait times, temporary structure availability and preferred vendors.

Plan your post-catastrophe communication. Once the physical danger is past, policyholders will be focused on recovery, so post-catastrophe communication will be critical. Create a process to reach out to affected policyholders with updates on claims status and offers to assist by communicating with the carrier on the policyholder’s behalf for a claims issue. Be sure to have an electronic payment option since the insured may be displaced.

Be ready to provide information on temporary facilities located in their area, adjuster availability and any community outreach. Fine-tune your process for notifying policyholders when payments are made so they can access needed funds as soon as possible.

Now is an excellent time for agents to plan and prepare themselves, their processes, and their policyholders for catastrophic events. It starts with opening communication channels, and opt-in automated messaging can be ideal in this scenario.

Topics Catastrophe Policyholder

About Tara Kelly

Kelly is the president, CEO and founder of SPLICE Software.

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Insurance Journal West June 21, 2021
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