There’s No Place Like Home

What Buffalo’s historic winter storm teaches us about catastrophe response.

January 27, 2015 Photo

While Buffalo, N.Y., certainly is no stranger to winter weather, November’s winter storm—unofficially referred to as Winter Storm “Knife”—cut through the southern suburbs of the city, dumping between five and seven feet of snow in a matter of days. Cowlesville, N.Y., was hardest hit with snowfall accumulations of 88 inches.

Recorded snow levels in some regions were more than what typically is seen in an entire winter season. With peak snowfall accumulation between three and six inches per hour, municipal snowplows from outside areas and other states assisted with the snow removal. The National Guard was called in to enforce driving bans and road closings.

Localities declared states of emergency. New York Governor Andrew Cuomo declared a state of emergency on Nov. 19, 2014, and subsequently requested a major disaster declaration as well as assistance from the Federal Emergency Management Agency (FEMA). Even with all of the precautions and warnings, 14 people died.

Property damage was severe, with roofs collapsing from the weight of the snow. Pressure from outside snow and winds caused structural damage to buildings. People evacuated their homes due to concerns of structural integrity when cracks in walls or ceilings were observed. The local farming industry suffered significant damage due to loss of product such as milk, as well as death or injury to livestock and animals. Businesses shut down as a result of the weather conditions and the fact that their employees couldn’t get to their workplaces due to travel bans and being snowed in.

A large portion of the New York State Thruway was shut down, including the stretch from Rochester, N.Y., to Pennsylvania. According to reports, many travelers were stranded in their vehicles or wherever they could find shelter—some for days. Many schools were closed from Nov. 18, 2014 through the Thanksgiving holiday, reopening on Dec. 1, 2014.

While the effects of this catastrophe on the insurance industry will take time to evaluate, the handling of this natural disaster serves as a lesson for the future investigation and evaluation of catastrophic claims.

All Hands on Deck

In the face of the impending influx of claims and concerns of the public, the importance of having everyone in the office assist cannot be overstated. Advanced preparation for the worst will never cause harm; being ill-prepared certainly can.

If possible, calling in catastrophe adjusters or adjusters from unaffected areas will lessen the load on the staff and increase the speed with which adjusters are able to reach and assist insureds. Those who make it in can, and should, assist in whatever ways possible. Whether stuffing envelopes or helping with the influx of calls, no job is too small to help.

Thanking those who fought the elements to make it to the office also is important. Whether it is a formal thank you or providing free coffee and bagels, the acknowledgement will increase morale and productivity.

Use Available Technology

While many may laugh at the public’s obsession with social media, it and other technological advances greatly assist the insurance industry with the dissemination of information and claims handling. Insurers that take advantage of their own websites, as well as Facebook, Twitter, and email blasts, are able quickly to provide their insureds with information ranging from loss control tips to contact information for contractors.

Not only are these avenues instrumental in assisting those affected by the catastrophic event, but also they can provide insureds in unaffected areas information of the impact on their claims. For example, notifying out-of-state insureds that the U.S. Postal Service’s inability to deliver mail will delay the delivery of their claims documentation will prevent confusion or negative consequences.

Further, with recent technological advances, the physical presence of the employee in the office is no longer a requirement. Remote access by adjusters and claims representatives allows those who are either trapped in their homes or simply unable to reach the office to assist with handling and investigating the claims. Transferring incoming calls directly to a cellphone allows for quicker responses in addressing the damage and concerns of insureds. Lastly, the ability to transfer incoming calls to an unaffected location decreases the load and pressure on offices in the storm.

Triage the Claims

With damage ranging from broken windows to collapsed roofs and other structures, having a system of prioritizing claims will allow adjusters to reach those in the hardest hit areas promptly. Not only must adjusters have information as to which claims are priorities, but also they need up-to-date information on the areas in which travel is banned as they will not be able to gain access to those claims. Accurate and timely information on where and when to investigate will not only prevent delays, but also assure the safety and satisfaction of everyone involved.

Additionally, claims representatives answering calls and the adjusters investigating them must have a working knowledge of specific policies. The insureds should be advised promptly of what is covered and what their responsibilities are under their policies.

While insureds may anticipate that every collapse due to the weight of the snow qualifies as a covered loss, adjusters must be aware of exclusions to coverage, such as “[f]reezing, thawing, pressure, or weight of water, ice, or snow, whether driven by wind or not. This exclusion applies only to fences, pavements, patios, swimming pools, foundations, retaining walls, bulkheads, piers, wharves, or docks.” Insureds must be advised that satellite dishes and their systems, even though attached, may likewise be excluded.

Some insureds may be unable to reside at their insured premises due to lack of heat or physical damage caused by the elements. In such situations, insureds may make a claim for additional living expenses for reimbursement of funds they expend. Explaining early on what is allowed under the policy will prevent difficulty in the subsequent evaluation and verification that the insured actually incurred a “reasonable increase in living expenses necessary to maintain a normal standard of living when a direct physical loss we cover makes a residence premises uninhabitable.” Even something as simple as having adjusters make insureds aware that policy conditions require them to produce receipts for any such increased costs will assist everyone in the long run.

The actions of insureds during the catastrophe must be evaluated due to the exclusions for inadequately preserving and protecting the dwelling from further loss. For example, with a loss such as a collapsed roof, additional damage may result if the structure is not properly and promptly protected. While failure to mitigate is an exclusion, insureds cannot be penalized if they could not reach their structure due to travel bans or other issues. Thus, the insureds’ efforts to protect the property during and after the loss must be verified.

Of course, while the vast majority of insureds are honorable and honest, there are times when fraudulent or erroneous claims are made. Some insureds might be unaware of the cause of the damage as they first noticed it after the storm, while others may attempt to profit from the chaos that follows these disasters. With the pressure of thousands of claims to evaluate and process, adjusters still must take into consideration whether any of the damage is not covered because it was actually a result of normal wear-and-tear or aging.

Awareness of each state’s applicable requirements on how long they have to investigate a claim following first notice of the loss also is critical. For example, New York requires an insurer to issue a disclaimer as soon as practicable, which has informally been held to be 30 days or less. Failure to comply could result in a disclaimer being rendered untimely and therefore invalid.

Assist the Insureds

For many insureds, the catastrophe is the first time they are making a claim. Simply providing insureds with access to claims paperwork is not enough. They may not know what to do to protect their properties from further damage or how to prevent it from getting worse. The insureds may not be aware of the effect that ice and snow pressure has on windows and doors or the importance of keeping furnace and dryer vents unobstructed. They may not even know whom to call for an evaluation and estimate of the damage.

Making certain adjusters and claims representatives have information on loss control and prevention is, therefore, critical. Even something as simple as providing contact information for contractors in the area will not only protect the property from further damage, but also result in grateful and satisfied insureds who want to continue the relationship with their insurers.

It’s also important to remember that filing a claim, especially one resulting from a catastrophe, is a traumatic experience for the insureds. Some will be completely unaware of the conditions and exclusions of their policies, even if they seem like commonsense to us. It may take time, but it is important to make certain that insureds understand the claims process and their obligations under the policy. Listening to and reassuring a person who is scared and confused goes a long way. Being empathetic to their situations and their potential lack of knowledge will assist in the investigations and result in happy customers.

While no one can foresee all the issues that may arise out of a catastrophic event, early preparation and having a plan in place will assist in claims handling and customer satisfaction.  

About The Authors
Renata Kowalczuk

Renata Kowalczuk, Esq., is a managing partner of CLM Member Firm Brown & Kelly LLP and practices in the areas of insurance defense and coverage, including the investigation and defense of first-party property claims. She also is a member of CLM’s Insurance Bad Faith and Construction committees. She can be reached at (716) 854-2620,

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