“Hi, Karlyn. It’s your sister. We’ve been evacuated. There’s a big fire up in Paradise that might head down our way. Just wanted to let you know we’re heading to our daughter’s house. We only had 15 minutes to grab stuff, but it probably is just a precautionary alarm. Call when you get a chance.”
That was the voicemail I got Thursday afternoon after I had spent a day chatting with an insurer about customer experience and the claims process.
The next voicemail said: “We’re on the road again. My daughter's place is now being evacuated. We’re going to mom’s.”
And when I got off the plane, the last one said: “Mom’s evacuated now, too. We’re all coming to your house.”
Sadly, she and her husband lost their home and business in the northern California wildfires. Fortunately, everyone is alive, I have enough room for everyone and I know a little bit about insurance. It turns out that being a bit bossy is also a great attribute when you’re helping someone in a disaster.
Now, usually, I cover the claims process by looking at the technologies that insurers deploy when handling a claim. But all of a sudden, I now get to experience a totally different lens on the process. I helped my sister and her husband file their claim on the home and on the business. Both carriers are big name brand carriers that I know well. I know what systems they use, I know their strategy and their commitments to customer experience, and I know where their executives believe they are. But, so far, we’ve had mixed experiences. So I have some advice…
The First Notice of Loss (FNOL)
- Both carriers had terrific after-hours intake staff. Although I know their claims admin solution and could visualize the fields on the screen as the carriers were gathering information, the intake process did not feel like they were just filling out a form. It truly felt like these people cared. They both spoke slowly. Which, it turns out is VERY important. They were patient, and they were very clear about the next steps. I asked my sister afterward how she felt, and she said “I feel safe. I think they’ll be here to help me.”
- Here’s where we first start to see some stubbed toes. Both companies sent an email after the FNOL. The commercial lines company came within hours and provided a contact name and phone number. Literally 40 minutes later, the claim was reassigned to a different adjuster. No other information was provided other than a name and phone number. There was no information about what was going to happen next or what to expect. The personal lines company's first email came one full day after the FNOL and said it was “reminding” us to view terms and conditions to receive claims documents. It required us to set up an account on the company's portal. This wasn’t really a reminder, as no one had mentioned a portal to us. The wording was such that we believed we had to set up the portal account before anything would happen on the claim – especially because, at that point, no adjuster had been assigned, and there had been no other contact by the insurer. And the process for creating an account was actually unclear even to me. It took me multiple attempts to just set up their account, and I’m not quite sure what we’ll do on that site once something happens. The setup certainly did not need to be done before contact with the adjuster.
- The business insurance carrier reached out the next business day to provide basic information and to explain the next steps. My sister and her husband were told to put together an inventory and provide a monthly profit and loss statement going back two years. They were not given any information about what happens next in the process. We believe that nothing is happening until the inventory is complete and they find a way to recreate the P&L statements – both of which feel like pretty formidable tasks, especially for people who have just gone through such a harrowing experience. The personal insurance carrier did not even call. Not that day, or the next day or even the next day or the day after that. Meanwhile, friends who also lost their homes have had money deposited in their accounts and have people looking for long-term housing. My sister has nothing. Finally, five days after the FNOL, I called the personal lines insurer. The insurer claimed it had tried to call – but we show no record of any calls on my sister's phone or her husband's – and there was also no email outreach from the adjuster (although the email on the terms and conditions did come through). Let me just say, I’m already pretty sure that I do not want this carrier as my insurer or as the insurer for my family and friends.
- When we finally got hold of the personal lines company five days after the total loss of my sister's home and business, the company offered $500 of emergency funds. Let me just say – that’s kind of a pathetic amount of money given that my sister and her husband had to buy clothing, toiletries and other supplies immediately. With only 15 minutes to evacuate both a home and a business, you don’t take a lot with you. Fortunately, they didn’t have to rent a hotel, but they were already $2,200 into basic expenses. And the document that they received explaining the temporary living expenses – honestly, it feels like it assumes that we’re going to try to defraud the insurer. Sure, you may have fraudulent claims. But if you have a trusted, long-term customer who has never filed a claim, you may want to treat that customer differently. My sister said, after that call – “I think they’re going to scam me. I think they’re going to do everything possible to not pay me. Do you think we need an attorney?” Notice how quickly she went from, “I think they’ll be here to help me,” to, “Do I need an attorney?”
- I happen to know a little bit about insurance and so requested copies of the policies so I could understand all the coverages. The first response from both companies provided only the jacket. I had to make a second call to each insurer to get the underlying language, although I had asked for that in the initial call. And the commercial lines company sent me the wrong person’s policy. I got a copy of a policy for someone else’s completely unrelated business entity. As expected, each policy has a lot of little sub coverages – like debris removal or coverage for fine arts. But both companies only told us about the limits of insurance for the major coverages. They did not identify all the little sub coverages – and without an insurance expert reading the contract, my sister and her husband wouldn’t have known that there is coverage for their trees and shrubs, so wouldn’t have put them in the inventory. On the commercial policy, there’s a difference of almost $400,000 of additional coverage from those small sub coverages. Additionally, the insurer got the basic limits wrong, as there is a special endorsement that attaches to the policy that provides additional coverages and extends certain limits within the policy. If I hadn’t requested the policies, and didn’t know how to read and interpret them, there’s a lot of coverage that might have gone unclaimed.
- Here’s where being bossy comes in handy. It turns out there are a LOT of things that have to be done when your home and business burn down. Things like rerouting landlines to a cell phone and setting up a P.O. Box to get the mail. Filing a FEMA claim and contacting the county to get your property taxes reduced. Figuring out how to get an inspector and how to find a contractor. Even just figuring out who to call to see if the road has opened and whether you can get access to your home to start some kind of salvage. I bet that insurers know all these different steps. But neither carrier provided us with a checklist of things to do or a checklist of what will happen next. Our instructions are: “Create an inventory and keep receipts.” My sister and her husband are sitting in limbo and want to move forward. But they don’t know what needs to be done.
