Candid feedback on how consecutive Cats strained resources

A scarcity of skilled labour, shortage of building materials and lack of adjuster capacity were all significant hurdles in the claims process following consecutive wildfire and flooding catastrophes in Nova Scotia last year, Insurance Bureau of Canada (IBC) says in a new report.

Insured losses from the May-June 2023 Tantallon wildfire and July 2023 atmospheric river flooding event are approaching nearly half a billion dollars, according to final estimates from Catastrophe Indices and Quantification Inc. (CatIQ).

“The back-to-back disasters in Nova Scotia illuminated the challenges of managing two large claims events in quick succession and tested the resilience and adaptability of insurers, adjusters, restoration companies and emergency services,” IBC says Thursday in a press release. “Stakeholder feedback suggested the need to improve information flow as crucial to successful disaster management and to enhance response efficiency and effectiveness.”

IBC included candid feedback from various stakeholders, including restoration companies, insurers, and brokers, in its report, One-Year Update Following 2023 Nova Scotia Wildfires and Flooding.

In the IBC report, restoration companies identified a scarcity of skilled labour, building materials, and lack of adjuster capacity as major hurdles in the claims process. Some of the feedback includes:

• “Huge delays on specialty items (kitchen cabinetry, windows, doors) with four- to five-month back orders [as] the norm, and costs increased substantially.”
• “Sub-trades must be paid ahead of time — and their costs have increased.”
• “It’s to the point now that, due to the number of catastrophic weather events in the last two years, we can’t catch up with the demand.”
• “It’s hard to find skilled labourers – applicants have little to no skill set or experience, and there is high turnover.”

 

Restoration companies overwhelmed

For insurers, feedback centered on the availability of claims adjusters. Restoration companies found themselves overwhelmed, leading to misplaced estimates and claim delays. “Some restoration companies had over 400 files. Four hundred files cannot be managed properly,” reads one comment.

Brokers identified the need for better real-time communication to improve the response to future catastrophic events. “Brokers felt that the ability to access claims notes would help better assist clients, although privacy concerns in sharing such data would have to be addressed,” the report says.

In the aftermath of the wildfire, some adjusters also supported having one adjuster handle all total loss claims within a company to ensure consistency.

“The overarching lesson from these events is the need to improve communication,” the report says.

Total insured losses from the two events now stand at $490 million, Insurance Bureau of Canada (IBC) says. The final estimate for the Tantallon wildfire was about $247.5 million, with the flooding event totalling about $243.2 million.

The May 28 to June 4, 2023 wildfire forced more than 16,000 people to evacuate their homes and businesses in the Halifax Regional Municipality. The fire destroyed or damaged at least 200 properties, including 151 homes. Tantallon, N.S. was the worst-hit community in the Halifax area.

The atmospheric river event on July 21, 2023 led to significant flooding in parts of Nova Scotia, including Halifax, East and West Hants, Lunenburg and Queens. In the hardest-hit areas, more than 200 millimetres of rain fell in fewer than 24 hours, “leading to a provincial state of emergency, significant damage to infrastructure, flooding to homes and businesses, and tragic loss of life,” IBC says in the report.

The Tantallon wildfire was originally estimated to have caused more than $165 million in insured losses. Initial estimates for the July 2023 atmospheric river flooding event were similar at more than $170 million.

The good news is more than 88% of the wildfire claims and 90% of the flooding claims have now been resolved, CatIQ reports.

 

Feature image: Buildings are seen in floodwater following a major rain event in Halifax on Saturday, July 22, 2023. A long procession of intense thunderstorms have dumped record amounts of rain across a wide swath of Nova Scotia, causing flash flooding, road washouts and power outages.THE CANADIAN PRESS/Darren Calabrese