Adjusting Calgary’s hailstorm: The rationale for bringing in U.S. Cat adjusters

During the hail storm this past June that damaged tens of thousands of Alberta homes, adjusting firm CRU Group struggled to find enough qualified independent catastrophe adjusters in Canada, and wound up resorting to bringing in people from the United States.

“It didn’t go over real well,” acknowledged Skip McHardy, chief operational officer, catastrophe response, at CRU Group. He was answering a question about the situation during Canadian Underwriter‘s Aug. 27 webinar, Standing on Guard for Thee: Adjusting Canadian NatCats. “People in Calgary weren’t really happy seeing Texas trucks during the pandemic. It definitely was a challenge, but I think people realize it was a necessary thing to ensure that the service was there; to ensure that the properties would get inspected.”

Hail the size of tennis balls was observed in northeast Calgary and nearby communities the evening of June 13, and there was major damage to roofs, siding, windows, skylights, and vehicles. Catastrophe Indices and Quantification Inc. (CatIQ) estimated the P&C insurance industry paid out nearly $1.2 billion for repairs, making the Calgary hailstorm the fourth-costliest insured disaster in Canadian history.

In a press release July 3, the Canadian Independent Adjusters’ Association referred to concerns from the public, expressed on social media, over whether deployment of U.S. adjusters to handle claims in Alberta was appropriate given the current pandemic travel and quarantine restrictions.

During the webinar, one audience member asked McHardy why consideration was not given to hiring multi-line Canadian adjusters who needed work after being laid off during the COVID-19 pandemic.

Property loss adjusting during catastrophes is a different model, McHardy replied.

“You don’t talk to a Cat adjuster about liability, or slip-and-fall claims, or bodily injury,” he said. “Canadian independent multi-line adjusters are incredibly well-trained, incredibly well-educated. They are very professional.  But ask one of them to get on a plane, fly across the country – regardless of missing his daughter’s graduation – bring with them a ladder, rope and harness, and go to another market,” said McHardy, alluding to the fact that Cat adjusters are asked to work under a different set of circumstances than multi-lines adjusters.

When responding to catastrophe events, CRU Group tends to spend thousands of dollars in advertising trying to recruit independent adjusters in Canada, McHardy continued.

“Inevitably we are lucky if we get two or three” because it is just so tough to find someone meeting all the criteria, he said. “[The adjuster] has to give 100% of his dedication to the particular carrier that he is going to work for. He has to be able to do all the work, climb the roof, write an accurate estimate in either Symbility or Xactimate – the [software] platforms that the carriers need. And oh, by the way, he doesn’t get paid until he does the work – and he is not sure if he is going to be there three days, three weeks, three months, or two years.”

Webinar panellists noted that independent adjusting firms, which handle Cat claims outsourced to them by insurance companies, each has a different business model. Likewise, at the company level, each individual insurance company has its own way of handling catastrophe claims.

For Desjardins Insurance, handling Cat claims is an extension of what Desjardins adjusters do on a daily basis, said Fred VanDine, section manager of property field claims for the Ontario, Atlantic and Western Regions at Desjardins, during the webinar.

“We want to make sure that when we do have people handling a Cat, that they’ve got good customer service skills, they’ve got the knowledge and confidence to be able to get out there and answer questions and have a solid understanding of property damage – hail, wind, fire, flood – and also the repair techniques that are needed.”

Feature image via iStock.com/IndyEdge