To process tens of thousands of auto and property claims with losses already well into the billions of dollars, insurance companies have adjusters camping out across Texas.
The Houston Chronicle reports in one case, the adjusters – many of whom are called in from out of state due to the magnitude of the effort – are living in tents.
Farmers Insurance sent more than 400 catastrophe insurance responders to assist with Hurricane Harvey-related claims. About 80 of them have quartered at “Farmers Village,” a camp in Rosharon where newcomers are greeted with maps of their air-conditioned cabanas, the food tavern, fishing area and putting greens. A fuel station allows employees to fill up rental cars, and Adirondack chairs overlooking the lake are popular for unwinding after 12-hour days. But mostly, the tents put them relatively close to their work while also freeing up hotel space for families flooded out of their homes.
The plan was developed after 2008’s Hurricane Ike when catastrophe adjusters had to stay in the homes of local insurance agents. It was tested in California after a fire, but Harvey is the camp’s first large-scale deployment.
“It was always designed for a major hurricane that hit Houston when truly much of the infrastructure was knocked down,” chief claims officer Keith Daly said. “In this case, much of the infrastructure wasn’t knocked down, but there’s still that hotel aspect.”
The Farmers adjusters are handling 38,000 claims throughout Texas and roughly 15,000 in the Houston area. The insurer expects to have made contact with all affected customers by the end of this month, though it will have adjusters in Houston through the remainder of this year. As people begin rebuilding, they often find additional damages to report.
Farmers is not the only company working its way through a logjam of flooded cars and wind-battered roofs. State Farm customers have filed roughly 34,400 automobile claims and 39,900 property claims in Texas. The Texas Windstorm Insurance Association, the insurer of last resort for wind and hail coverage along the coast, reported 55,664 claims.
Those numbers don’t include flooded homes. The federal government provides flood insurance, and more than 83,600 National Flood Insurance Program claims have been filed in Texas. Some $174 million has thus far been issued as advance payments, according to the Federal Emergency Management Agency.
“In Houston, it’s absolutely flood and cars,” Daly said.
Farmers CEO Jeff Dailey was in Houston on Tuesday to support his employees. Outside a home in Katy, he confirmed that the “vast majority” of Farmers’ customers don’t have flood insurance for their homes. He did not know how many were flooded.
“To me, the biggest impact on Houston is going to be the uninsured economic damage here,” Dailey said. “I think this will rival what happened in New Orleans with Katrina.”
Insurance response personnel are helping customers without flood insurance seek assistance from FEMA. Before the agency will provide financial aid, homeowners must have letters from their insurers confirming that the properties didn’t have the proper coverage.
Adjusters are also educating homeowners on the different nonprofits providing aid.
“There’s an outpouring of funding that has happened, the challenge is: How do you find it?” claims officer Daly said. “That will be a frustration for people in Houston as to who’s the lucky one that gets it and who doesn’t. It’s not a regulated environment.”
Early estimates suggest the damages are extensive. Residential insured and uninsured flood loss for Hurricane Harvey could be between $25 billion and $37 billion, according to an Aug. 31 report from CoreLogic. About 70 percent of the flood damage is uninsured.
The Insurance Council of Texas estimated $3.75 billion in insured automobile losses throughout the state. And a JPMorgan report placed overall potential industry insured losses for Harvey at $20 billion.
Technology, however, is boosting Farmers’ efficiency in handling claims. Drones provide a look onto rooftops that is quicker and safer than having an adjuster climb up there.
Customers can also submit pictures of their vehicles. Using the flood line to indicate how deep a vehicle was submerged, Farmers may be able to make quick determinations.
“Knowing that this is a car-dependent community, the quicker people can get back into their vehicle, the quicker they’re going to be able to get their lives back on track,” Daly said.
Farmers’ catastrophe insurance adjusters generally work every day for three weeks before getting five days off. For Harvey, they’re working a six-week stint, though they will get a few days off during their third weekend in Houston.
Farmers Village has provided them with team building and collaboration opportunities that aren’t always available in hotels. The company rented Wake Nation Houston, a cable wakeboarding facility, to set up camp Sept. 1. The camp closed Thursday.
“Our quest was really to try to make this as comfortable as we could,” said Jeff Losey.
Losey and Kim Stafford, who run the camp and have been dubbed co-mayors of Farmers Village, gave the Chronicle a tour Tuesday.
In addition to designated work areas, there are seven men’s cabanas and two women’s cabanas, each capable of housing 10 people. Some tents have dividers while others are open like college dorm rooms.
“My primary concerns were it’s Houston at the end of summer and we’re staying in tents,” said Mike Davidson, a catastrophe manager for business insurance. “It’s been a lot better than I expected.”
He said the tents remained cool and the mosquito population under control.
The beds have sheets and sleeping bags. Employees can drop off laundry to have it washed, and shower trailers provide shampoo and clean towels. The women’s restrooms even have artwork and background music. Hot breakfasts, to-go lunches and dinners are served buffet style. Football’s on the TVs, and evening pingpong matches are common.
Ultimately, Farmers Village allows the company to focus on customers while taking up fewer of the city’s hotel rooms. This was especially meaningful to Stafford as her friend in Katy was flooded and couldn’t find a hotel. She ultimately found a short-term apartment rental.
“Going through this really shows we put our action behind our words,” she said.