Inside Insurance: What's next?

Inside Insurance: What's next?

May 14th, 2011 in Business Diary

By David Colmans

The nation is in one of the largest recovery modes ever with five separate billion-dollar storms that struck across the country, many of them in the South.

According to Dr. Jeff Masters, who writes a weather blog on, here's what has shaken not only weather experts but also emergency service professionals, the insurance industry and the millions of people who have been, and continue to be, affected. To view Dr. Masters' overview, go to

  • 2011 Groundhog Day's blizzard ($1-$4 billion)

  • April 3-5 Southeast U.S. severe weather outbreak ($2 billion)

  • April 8-11 severe weather outbreak ($2.25 billion)

  • April 25-28 super tornado outbreak ($3.7-$5.5 billion)

  • Mississippi River flood of 2011 ($2+ billion)

After the shock wears off for those who have been, and still are, affected by these events, the next step is literally putting the pieces back together. Insurers have set up many mobile catastrophe centers in the affected areas to assist their policyholders to return to some sense of normalcy as soon as possible.

That is a task of far greater magnitude than one might think. Their insurers handle these natural disasters for the thousands of victims in the same way that an emergency room triages patients who have been seriously injured all at once. The range of catastrophe extends from a home or business that has been literally blasted off it foundation into a pile of scattered rubble to homes or businesses where there is very minor damage including broken windows, trees down and damage to roofs or siding.

The worst damage where homes are uninhabitable are usually, by necessity, the first to be reviewed/inspected because the family must find temporary housing and receive short-term payments to go on with daily life. Emergency personnel must do their best to secure the affected areas and displaced individuals must be housed, clothed and fed as well as made "whole" again as soon as possible.

Contrary to Dorothy's adventure in the Wizard of Oz, this is not a dream and those affected first must deal with living through the calamity, adjusting to displacement that may last quite a while and be expected to have patience to deal with a complex process that will take time.

As the recovery phase continues, home sites must be evaluated, demolition must take place and then the rebuilding process begins. Adjusters and catastrophe personnel are working not only on-site, and in temporary centers, but at regional offices and corporate headquarters catastrophe teams are hard at work to provide the needed resources help policyholders achieve some sense of normalcy.

For those who cannot return home, insurers provide additional living expenses since families are likely to obtain rental housing given the time it takes to rebuild. In many cases, not only the home but transportation has been destroyed or seriously damaged, so vehicle adjusters must also be involved.

Patience may be a virtue, but when all one has is gone, everyone is stressed. Working through these catastrophes is what insurers do. Extra staff is in the affected areas and in regional offices make this process as efficient as possible.

Homeowners and their families must work with their insurers to not only deal with the physical damage of their dwellings, but to identify as best they can all the personal effects that were damaged or destroyed. Clearly this is a difficult process but it must be done to help the family recover and return to their pre-storm state.

On top of these issues, victims of the storms are reminded to be very careful as to whom they deal with in the clearing and rebuilding process. Recommendations from their insurers, family and friends regarding contractors are important to consider.

Dealing with strangers who show up to obtain work can prove to be a bad situation as insurers, government officials and consumer advocates constantly warn. It's better if you request a contractor than to deal with someone you don't know.

This is the time to be appreciative of help provided by insurers and the local community, a time to understand that the complexity of the problem requires patience and understanding, and a time to be vigilant over property and belongings.

David Colmans is the executive director of the Georgia Insurance Information Service. Contact him at (770) 565-3806 or by email at