Insurance adjusters who descended on Cedar Rapids, Iowa, after the Aug. 10 derecho storm are using drones to check roofs and asking homeowners with less severe damage to take their own photos.
Some of this is due to the COVID-19 pandemic, which has reduced the number of experienced adjusters willing to travel. But the changes also help speed up claims and get repairs done sooner, company representatives said.
“Drones or aerial imaging helps them estimate the claims,” said Scott Hauptman, vice president for claims for Grange Insurance, of Columbus, Ohio, which is working with Integrity Insurance, of Appleton, Wis., to handle at least 500 storm-related claims in Cedar Rapids. “It’s as efficient as possible and helps them (adjusters) safeguard their health.”
Cedar Rapids officials told The Gazette that 140 buildings are too damaged to be occupied. Several hundred more have non-structural or cosmetic damage.
Before buildings can be fixed and people can return to their homes, insurance companies must document the damage and determine how the loss will be covered.
Many insurance companies have sent catastrophic teams to Eastern Iowa. Nationwide Insurance, for example, stationed some at the Home Depot on First Avenue SE in Cedar Rapids.
“Really the biggest thing we’ve found in Cedar Rapids, due to lack of internet and power, is they (homeowners) weren’t sure if they had a claim filed or not,” said Courtney Kannas, property field claims manager for a Nationwide team that covers Iowa, Nebraska and parts of Kansas and Missouri. “If they didn’t have a claim filed, we could do that for them. We also could give them a high-level understanding of their policies.”
Integrity adjusters recently sent a drone over the Wired Production Group’s building on N Towne Lane in Cedar Rapids to get a better look at a roof that was peeled off and a crumbled back wall.
“This 12,000-square-foot building is a total loss,” said Ron Rausch, Wired Production president and owner. “They (Integrity) brought a structural engineer in here to document that was the case.”
An adjuster also looked at millions of dollars in cameras and other equipment Wired Production uses to stage events for many Eastern Iowa companies, including The Gazette. When the roof was ripped off, rain and water from broken water mains flooded the offices and ruined much of the gear, Rausch said. The firm is setting up operations temporarily in Dubuque until the Cedar Rapids site is rebuilt.
“They were very amenable to letting us start the cleanup process and work with people we want to,” Rausch said of the insurance company.
State Farm, the first insurer to get Federal Aviation Administration approval to operate drones over people, has been using drones to gather information on Cedar Rapids claims, spokeswoman Tammi Estes said.
Nationwide hasn’t been using drones in Cedar Rapids because of the challenges of photographing around fallen trees, Kannas said, but the company is encouraging policy holders with minor damage to photograph the property and submit claims online.
“It gives us a better picture right away as to the extent of the damage they have to their home so we can get them emergency reimbursement or set them up with temporarily housing a little quicker,” she said.
A Washington, D.C., law firm said in a news release that homeowners and businesses hit by the derecho will face challenges in getting adequate reimbursement.
Weisbrod Matteis & Copley, which represents homeowners in lawsuits against insurers, pointed to an Aug. 4 webinar with insurance executives who said many older adjusters were reluctant to go out in the field because of risk of contracting coronavirus.
Some insurance companies also have struggled to get adjusters into states that require quarantines for visitors.
“After battling the insurance industry after Katrina, I fear that Iowans will be left at the mercy of a B team of insurance adjusters,” Jim Hood, a former Mississippi Attorney General who now works for the law firm, said in a statement. “Storm victims will need to quickly document their damages with drones, pictures and lists of damaged items.”
One insurance executive on the webinar said he thought fewer adjusters in the field would increase fraud.
“I do have some concerns we are going to have to do more virtual adjusting,” said Jed Rhoads, president and chief underwriting officer for Markel Global Reinsurance, based in Virginia. “If we’re adjusting claims through satellite imagery or drones or handheld devices, it could lead to new additional types of fraud.”
People could doctor drone or cellphone images or charge a company additional costs to procure the photos.
Integrity Insurance has been allowing virtual adjusting for several years, Hauptman said, and has developed strategies for detecting fraud.
“We have means on the back end to authenticate the pictures to make sure the time and location are appropriate,” he said. “The vast majority of our customers are great people. If there is fraud in an industry, that affects everyone’s rates.”
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