Why Insurance Companies Need to Have Preparation Plans to Hire Catastrophe Adjusters When a Disaster Strikes
Wow! It has been more than 25 years since Hurricane Andrew, a category 5 hurricane, hit Florida. The hurricane tragedy in Texas comes just a few days after the 25th Anniversary of when Hurricane Andrew made landfall in South Florida in mid-August of 1992. I witnessed first-hand the devastation Hurricane Andrew wreaked in South Florida where I was a living at the time. Two years later, I was preparing to join the insurance industry for the first time as a claims adjuster. Perhaps, it was the picture of so many people losing their homes and valuable possessions that propelled me to enter the insurance industry.
As more and more natural disasters continue to hit our country, the need to be prepared and informed plays a crucial role for our insurance industry. Some disasters give warning, such as a storm. But others, such as an earthquake, have no warning. It is the need to respond quickly and be prepared that propels the insurance industry to find innovative and technological solutions that help policyholders get back on their feet. It’s everyone’s duty to prepare for natural disasters, and much work needs to be done in disaster preparedness. However, it is up to the insurance industry to help the policyholder recover more quickly, by paying claims that allow communities to rebuild.
During a disaster, insurance companies must be ready to respond to the needs of their policyholders. Therefore, insurers rely on hiring catastrophic adjusters, quickly assessing their proper qualifications so they can be deployed on short notice to the devastated communities. Their work in processing property damage helps insurance companies settle claims more quickly.
The National Association of Catastrophic Adjusters (NACA), was founded in 1976 by a group of qualified adjusters who first saw the demanding needs for catastrophic preparation. NACA now has members in 39 states across the United States. The number of needed catastrophic adjusters is rising.
Two types of license adjusters can qualify as catastrophic adjusters: staff adjusters and independent adjusters. Both types of adjuster licensing requirements are regulated at the state level. Staff adjusters are employed by insurance companies and can be qualified when they have been properly trained in adjusting property before they can work as catastrophic-claims adjuster. Independent adjusters are hired from an outside company to adjust catastrophic claims on behalf of the insurance company.
However, some states don’t require an adjuster to have an adjuster license to qualify as a catastrophic adjuster. Each state department of insurance will declare the use of temporary, nonresident adjusters to allow insurance companies to immediately appoint catastrophic adjusters without being first authorized by the Department, once the state commissioner declares a state of emergency. Thus, an insurance company has the capability to hire unlicensed personnel to be trained as a catastrophic-claims adjuster who meets the requirements set forth by each state insurance department.
The states that don’t require an adjuster license are Colorado, District of Columbia, Illinois, Iowa, Kansas, Maryland, Missouri, Nebraska, New Jersey, North Dakota, Ohio, Pennsylvania, South Dakota, Tennessee, Virginia, and Wisconsin. However, some states do require a Designated Home state license—the nonresident license—to be issued first so the individual can have the benefits of a home state license in reciprocity coverage. Catastrophic claims adjusters who normally must travel to affected regions need a Designated Home state license to work in other states.
If you are an insurer and would like to have the technology that will prepare your organization to be ready for a natural disaster, please contact VUE Software. VUE Onboarding and Compliance can streamline your licensing processes so you handle all the licensing requirements by each state and get your catastrophic-claims adjuster in the field, ready to service your policyholders at the time most needed.