Claims and the Customer Experience After the Camp Fire

By Karlyn Carnahan | November 20, 2018

Things you learn when you help someone in a disaster


“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 fifteen 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 daughters’ 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 them file their claim on the home and on the business. Both carriers are big name brand carriers who 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. And 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 they 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.”

Advice to insurers: The FNOL process is not about how quickly you can get the information, it’s about how safe you can make the claimant feel. Yes, the technology is important, but this is not the place to put data entry staff. Five stars to both carriers!

Acknowledgement of Claim:

  • 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 first email came one full day after the FNOL and said they were “reminding” us to view their terms and conditions in order to receive claims documents. It required us to set up an account on their portal. As a note, 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 since at that point, no adjuster had been assigned and there had been no other contact by the insurer. But 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. It certainly did not need to be done before contact with the adjuster.

Advice to insurers: Provide a more explanatory acknowledgment. Explain what will happen and when it will happen. Think about the sequence of the automated tasks and the order with which a claimant gets information. Don’t send out the online access instructions until after the adjuster has made contact and can explain the process. It’s too confusing when it just comes randomly. Or provide a document that explains the process and where this step fits in the process. An acknowledgment of claim should include some level of information around what the process will be going forward. By setting expectations early, you reduce the claimants’ angst.

Adjuster Assignment and First Contact

  • The business insurance carrier was proactive. The adjuster reached out the next business day to provide basic information and to explain the next steps. They 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. But 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, their 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. They claimed that they had tried to call – but we show no record of any calls on their phone – 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.

Advice to insurers: Keep reaching out until you talk to them. Or email. Or text. Any contact at all is better than none. My sister feels abandoned.

Immediate Support

  • When we finally got hold of the personal lines company five days after the total loss of their home and business, they offered $500 of emergency funds. Let me just say – that’s kind of a pathetic amount of money given that they 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 $2200 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 them 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?”

Advice to insurers: Be careful in how you word your explanations. Small nuances in language come across very differently to people who are traumatized and desperate for help. Use some kind of fraud analytics tool up front to determine how trusted your claimant is. Trusted claimants may be eligible to go down a different path.

Explanation of Benefits

  • 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 request from both companies provided only the jacket. I had to make a second call to each insurer in order 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, they wouldn’t have known that there is coverage for their trees and shrubs – and so, wouldn’t have put it 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 which provides additional coverages and extends certain limits within the policy. So 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.

Advice to Insurers: Let the claimant know all the different sources of coverage that may be available to them. Send them a full copy of their policy with all the underlying policy language.

What Comes Next

  • 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 PO 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 up and whether they can get access to their 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 take action to move forward. But they don’t know what needs to be done.

Advice to insurers: You know what has to be done. Help your clients with a checklist both of insurance activities, and of non-insurance activities. Give them a timeline of what to expect. Recovery is more than a check. And claimants generally have not had their home or business destroyed in the past. They don’t have basic information about what to do. Even as simple a checklist as ‘reroute your phone lines and get a PO Box” is good advice.

Going through a major event like a firestorm is traumatic. Technology is a terrific tool that allows carriers to deliver a great customer experience. But there are aspects of the customer experience that as of today, even these two big brand-name carriers don’t have right. Some of it can be automated and some of it is about the human touch. As an insurance industry, we can do better. And we should.

Karlyn Carnahan leads Property & Casualty research across the Americas. She focuses on issues related to digital transformation. She’s particularly interested in shifting distribution channels, new ways of enabling and managing channels, underwriting transformation and new products, improving claims and transforming the customer experience. She is a widely recognized expert on these topics and has written market-leading reports, presented at numerous conferences, and has been extensively published in a broad range of industry media and general business media.

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