Hurricane Dorian is expected to make landfall in Florida as a Category 4 storm over Labor Day weekend. This will be the fourth consecutive year that Florida experiences a major hurricane, following Hurricane Michael (2018), Hurricane Irma (2017) and Hurricane Matthew (2016). As the storm nears Florida’s east coast, the insurance industry is focused on one thing – the homeowner.
Given the frequency with which major storms impact Florida, properties in the region are relatively well-prepared for high-wind events. However, after a few years of consecutive storms and external factors causing additional strain on the insurance industry, carriers are strained to make the claims experience swift and efficient for homeowners weathering the storm.
Loss Creep and Elevated Construction Spend Clouds the Claims Process
Over the past year, loss creep has been top of mind for insurance carriers. In 2018, carriers noted loss creep from Hurricane Irma was of greater concern to their bottom line than claims from Hurricane Michael, according to S&P Global Market Intelligence.
These elevated losses are made worse by a tightening in the construction labor and materials markets. The combination of 2019 tariffs and coast-to-coast natural disaster activity have strained construction resources. It’s taking longer for homeowners to find a contractor to make necessary repairs to their property and, across the board, materials like lumber and steel cost more, elevating the cost of the overall project. These factors add additional roadblocks to the already complex claims process ahead of Hurricane Dorian’s landfall.
Insurance Carriers Aim to Accelerate Recovery Following Catastrophes
For insurance carriers, the longer recovery timelines that stem from loss creep and rising construction costs translate into homeowners who may not complete major repairs on their property until a few months to a year following the last hurricane. In today’s climate, insurance carriers do not have the resources to inspect every property. Ahead of and immediately following Hurricane Dorian, insurance carriers that leverage property data with insight into evolving risk landscape can provide customers with swift and more efficient service, which ultimately helps protect homeowners from life-threatening hurricanes by ensuring properties are repaired to completion in a timely manner.
A BuildFax analysis of 11 major hurricanes between 2000 and 2018 found the average recovery following a hurricane lasts 10.7 months. This timeline pertains specifically to larger-scale repairs, including building, plumbing, electrical and mechanical work, following hurricane landfall. These major systems repairs are critical and impact the homeowners’ day-to-day lives following an event. However, hurricane recovery may extend beyond 10.7 months to account for other smaller repairs.
The average recovery timeline provides a window into how long repair-work should take, but it also affords carriers an understanding of how long their customers might be waiting for a re-roof or another major repair following Hurricane Dorian. These insights enable carriers to better serve homeowners in this crucial time.
Property-Level Data Supports Carriers in the Aftermath of a Hurricane
It’s of the utmost importance that insurance carriers respond quickly and efficiently to claims following a hurricane; all the while ensuring homeowners have the resources they need to complete these repairs promptly. However, following a major hurricane, insurance carriers are also grappling with an influx of claims.
Especially in these times, property-level insights enable carriers to:
- Identify Preventive Maintenance Activity: Properties that underwent storm shutter installations are likely to fare better during Hurricane Dorian. In fact, between 2017 and 2018, Florida experienced a 38.83% increase in storm shutter installations across the state.
- Monitor Structure Improvements Between Renewal Dates: Immediately following a storm, some properties may require a reroof while others could require even larger repairs. Pay claims quickly, validating the condition of the structure that accounts for depreciation or improvements made since the last renewal date, taking that burden off the homeowner.
- Improve Claims Efficiencies by 30%: Following Hurricane Irma, BuildFax helped American Integrity Insurance Group close the loop on claims submissions by validating completed repair work, ultimately resulting in a 30% reduction in research time.
- Identify Potential Instances of Claims Fraud: Especially in areas with repeated severe weather activity, carriers can use insights from repairs to validate that properties are appropriately repaired ahead of the next hurricane.
For more insights into how BuildFax can help you better serve your customers amidst Hurricane Dorian, contact a representative today.