Ensuring a Lifeline

Floods swept the length of the St. John River from Edmundston to Saint John, NB damaging roughly 1,600 properties and throwing the province into a disaster situation this past April. As the waters receded, the Canadian Independent Adjusters’ Association (CIAA) stepped in to work alongside the New Brunswick government to ensure residents had a roof over their head, a dry place to sleep, a safe place to live and nourishment to sustain health.

When a disaster, such as a flood, hurricane or large scale fire, hits a province, everybody moves in to high gear to ensure the safety of residents. When there is considerable impact on a community, the province dubs the situation a disaster and various government programs are triggered, including Disaster Financial Assistance (DFA). This assistance — often handled through the provinces’ Emergency Measures Organization (or the Emergency Management Organization in Nova Scotia/EMO) — kicks in when the disaster is of uninsurable or under-insurable nature. The assistance is intended to help residents get back on their feet after a disaster. It is not compensation and it’s not an insurance policy — it is assistance to help residents return to a safe and comfortable environment. “Consideration under the program, for the most part, is to assist in replacing essentials of life,” Wayne Johnston, chief adjuster and EMO claims officer in the province of New Brunswick, says.

To help offset the cost of the disaster event, a province can apply to the federal government’s Disaster Financial Assistance Arrangement (DFAA), according to Jim Coolen, adjuster with Marsh Adjustment Bureau. The federal DFAA is triggered by $1.00 per capita of eligible damage. If the federal government determines that the DFAA could apply in a particular disaster situation, then the province proceeds with delivering the DFA. However, after the DFA program is completed by the province, the federal government once again steps in to audit the process and determines whether the money paid out by the province fits the arrangement of what the federal government was prepared to offset.

“That’s where it gets sticky,” Coolen says. “That’s where you need good paperwork, good documentation, good support. Then it’s a back and forth thing where the province might not have sufficient information and they have an opportunity to then go and get sufficient documentation to support their request for this (funding arrangement).”

If there is not sufficient documentation to show property damage and subsequent allocation of funding to residents, a province might not receive necessary funding from the federal government.

Available options

This is where the CIAA can help the provincial EMOs.

“CIAA members are committed professionals and our expertise is in dealing with just this very sort of situation,” Fred Plant, president of the CIAA and president of Plant Hope Adjusters Ltd., says. “So we can take our expertise and we can supply that service to the government promptly and efficiently, with dexterity and nobility and a proven track record.”

The agreement between the provinces and the federal government states that another party must be there to review and qualify claims, because of the percentage paid out by the federal government, Johnston says.

“We can facilitate the process to go faster, smoother and more effectively,” Plant says.

The CIAA is able to help governments ensure that the right amount of money is being spent; and that money is not flowed out the door for just anything. “There’s no other body that has the level of expertise and the ability to do this as we do,” Plant adds.

However, because the work with the EMOs is done in addition to an adjuster’s, relationships must be set up ahead of time, Plant notes. Independent adjusters are already very busy dealing with what is insured during a disaster and there is no time to submit a response to a request for proposal (RFP) at that time. “If the factory is running to full capacity, don’t go and try to get more orders, there’s no point, you can’t do anything more,” Plant says.

However, if a relationship is set up before a disaster occurs, CIAA can mobilize adjusters to handle EMO claims when disaster strikes — be it by bringing in experienced retired adjusters or adjusters from other areas within a province or nationally throughout the country. CIAA is able to provide a massive body of talent, rather than the limited number that would be available through any one company being awarded a one-off tender.

“You are just not going to have the time and resources to put the wheel in motion to get a response machine running immediately after one of these events occurs,” Plant says. “So, during less stressful times, we like to work with government bodies to establish protocols, set minimum standards, in order to be ready at a moment’s notice when something happens — it’s just good planning.”

While DFA is not an insurance policy, there are many aspects to the process of distributing the funding to homeowners in need that resemble an insurance claim: an affected homeowner makes a claim, there is a program or policy that needs to be interpreted and documentation needs to be garnered. The evaluation of requests follows the same process, the same protocols; it requires the same level of energy, sometimes to a higher degree. There needs to be an understanding of building construction, an understanding in dealing with contracts and in dealing with and explaining things to people.

Because independent adjusters are dealing with these types of responsibilities on a day-to-day basis, they are able to bring to the table knowledge and expertise not found elsewhere. The adjuster knows how to remediate and deal with various situations; adjusters are quick on their feet and they can mobilize quickly.

“There’s nobody better geared for this type of thing.” Coolen states. “All the skill sets that an adjuster has fit perfectly. You cannot find a collective group that has the type of skill sets required to deliver this type of program other than looking to CIAA.”

During a disaster situation, it is not uncommon for an adjuster to spend 10 to 12 hours a day in the field inspecting properties for the EMO. At the end of the day, the adjuster returns to the hotel or motel where they have set up satellite offices to prepare reports summarizing the information collected. This is simply for the uninsured EMO claims. The day is even longer when insured claims are involved, as well. An adjuster often commits to working seven days a week for four to eight weeks without a break, depending on the magnitude of the disaster.

“It’s a hyper-CAT,” Coolen says. “Resources are limited by supply and demand, situations are serious and the need is immediate.”

There is a constant demand on the the adjuster during a disaster to get in, conduct an assessment of the damages and get out in the shortest possible timeframe as residents have often been displaced by weeks or even months by that time.

“People are taken from their normally comfortable environment and placed into a situation where they have lost a lot or most of their personal possessions,” Johnston says. “Yes, this can occur when dealing with a single fire on a regular adjuster’s daily operation, but now (the adjuster) is dealing with sections of a community that this disaster has affected. It is more traumatic than an individual loss.”

Further to this, not only are claimants distraught and on edge, but there are many situations where claimants are attempting to claim for damages that preceded the disaster situation. There must be an ability to view damages and apply common sense as to the possibility of those damages having occurred from the present incident, Johnston says. Often this must be done alone, or with little help, as everyone involved in the situation is stretched thin.

“On a normal basis of claims adjustment, the adjuster has the assistance of contractors to assess damages and usua lly at least two comparative estimates,” Johnston notes. “In the case of a disaster, contractors are usually at a minimum and therefore seldom available to the adjuster.”

Past adventures

In the past, CIAA has responded to requests from various EMOs across the country to help facilitate the processing of DFA claims, including in Saskatchewan, Manitoba, Nova Scotia, Newfoundland and New Brunswick.

The association conducts field investigations, assesses damage to the structure as well as the loss, and details the losses of individual property or possession. The appointed chief adjuster reviews the adjusters’ work, then government staff reviews it and the claim is settled.

New Brunswick

The CIAA’s involvement with the province of New Brunswick’s Emergency Measures Organization goes back 35 years to 1973 when Harry Marsh of Marsh Adjustment Bureau saw a gap that needed filling. He negotiated a relationship where the Maritime Independent Adjusters’ Association (MIAA) would handle the claims on behalf of the EMO. However, the MIAA quickly realized it didn’t have the resources necessary to deal with the close to 9,000 claims associated with one of the largest floods in the Saint John Valley and called on the CIAA (at that time it was the Canadian Independent Adjusters Conference) for assistance. And thus began the partnership between the CIAA and the EMO in New Brunswick.

“We’ve been doing this for years . . . I’ve been here for 20 years and that’s the way we’ve always done it,” Andy Morton, deputy director of the New Brunswick Emergency Measures Organization, says. “It’s a longstanding relationship with CIAA and for the most part it’s a mutually beneficial relationship.”

During the 1973 flood, adjusters came in from Maritime provinces, Ontario and Quebec to assist with the claims, Morton said. “Typically we would call (the CIAA) whenever we had a significant emergency or disaster occur in the province. It might be 40 to 50 claims it might be several hundred, it might be more than that.”

Currently the CIAA is working to settle the roughly 1,600 claims in New Brunswick after the flood swept through the province for five days in April. The event spurred the declaration of a disaster and the EMO team was propelled into action. Residents began filing the possibility of a claim and then subsequently filling out a claims form, Johnston says. The EMO set up satellite offices in the areas hit by the flooding, so that residents could obtain and fill out all necessary information. Shortly after the disaster hit the province, EMO contacted Johnston and he put a team together to handle the claims files being submitted by residents. These adjuster teams then pick up any available files at the EMO satellite offices before heading out into the field to complete the claim.

Because all parties involved in the disaster are busy, adjusters are currently putting estimates together as opposed to a contractor. While Johnston concedes that a contractor might be a little more accurate and ideal in a normal situation, “in some cases we haven’t been too darn far off!” he notes.

Partly due to the relationship with the CIAA and partly due to changes in government procedures as to how it should be responding to a disaster, the CIAA was called in roughly three months earlier than they have in the past. Previously CIAA would come in when all the requests for assistance were received by the government, but this time around, CIAA came in earlier to handle the claims as they were filed by residents, Johnston says.

Newfoundland

CIAA entered into a casual contract with the EMO in Newfoundland in 2004 and since that time CIAA has assisted the government on four catastrophe situations, Joan Morgan, Newfoundland and Labrador regional president for CIAA and provincial director for CGI, says.

When an event occurs in the province, the CIAA executive in Newfoundland meet with EMO staff to set parameters and establish what documentation will be required, how information will be secured, what the process will be, what will be payable and what won’t be. From there, Morgan, as regional president, conducts training sessions where every document, every procedure, expectations on closure rates and response time and how the information is to be compiled is discussed so adjusters are up to speed at the outset. When updates are required, EMO roots these through the regional president, who passes the information along to the adjusters. “It allows the process to work much smoother,” Morgan says.

Retired adjusters are called back into action to help handle the EMO claims during a disaster. The adjusters have no settlement authority and settlement is never discussed with the homeowner. They are required to gather information, scope damages, obtain contract estimates and so forth.

Manitoba

In 1997, the flood of the century hit Manitoba and CIAA worked with EMO to set up an adjustment and review process. To handle the roughly 3,500 claims, 99 adjusters were dispatched to Manitoba from across Canada on a review and evaluation basis for the EMO compensation program. Miles Barber, who was CIAA’s Manitoba regional president at the time, became the point of contact and any information was passed from the government through him to the adjusters. All information was provided to the member firms that were participating, then the adjusters were brought in and the job was completed within a two week period. “In the end, the product was delivered over a very tight and short timeframe,” Barber, past president of the CIAA, chair of the licensing committee and president of Network Adjusters, says. “Now, from time to time, there are uninsured events that happen in Manitoba where the adjusters are called upon to provide resources or assistance to a specific set of circumstances.”

The CIAA was able to help the Manitoba EMO deal with an immense influx of new claims and allow the program to move from the initial introductory stage at a speed where EMO could deliver the product in a timeframe they felt was more than reasonable given the size of the program.

Saskatchewan

For nearly 20 years, the CIAA had a contract with the Saskatchewan government wherein members of the CIAA would handle the claims associated with an uninsured disaster. Members would go out and meet with residents who had been impacted to determine what the damages were, what was eligible and subsequently prepare an estimate as to what residents were entitled to.

The Saskatchewan Provincial Disaster Assistance Program (PDAP) requires field adjusters to inspect dam- ages directly caused by the natural disaster and provide a report and assessment of damage to the program. The assessment and report is subsequently used as the basis in providing assistance to a claimant, Mieka Torgrimson, manager of the provincial disaster assistance program with the Ministry of Corrections, Public Safety and Policing with the Government of Saskatchewan, says.

A committee was formed within the CIAA to handle the partnership with the EMO. The province was sectioned off into regions so that CIAA member offices in that region handled any losses, which occurred within that area. If there was a requirement for more adjusters, bordering member offices were contacted and then subsequently province-wide if need be, James Overend, president of McLarens Scrivener, notes.

Adjusters would attend the scene, inspect and scope the damage and then the provincial government would finish off the file.

The agreement PDAP had with the CIAA was beneficial as it allowed PDAP to access a large number of adjusters and their services across the province when required, Torgrimson notes.

Earlier this year, the government decided to contract the work out to individual companies to provide adjusting services as a means to managing the extensive amount of information required to gather and process as a result of the claims, she adds.

CIAA is currently in the process of working to secure ano ther contract, Rob Johnston, Saskatchewan regional president for CIAA and claims rep for Midwest Claims Services, says.

Nova Scotia

In the early part of 2003, Nova Scotia experienced serious flooding in three different geographic pockets in March, creating more than 1,000 claims. After dealing with the aftermath of the flood, the Nova Scotia provincial risk manager, Bruce Langille, took a look at the recovery process and set up a new protocol in the event of a subsequent disaster based on lessons learned from the two floods. Coolen says he and Langille were having a discussion about what could be done to make the process more effective and efficient just over a week before Hurricane Juan ripped through the province, leaving in its wake at least 1,500 further claims.

Coolen says Langille implemented the procedure exactly as he said he would: he hired CIAA to bring in a contingency of examiners to deal with the requests for assistance and the fieldwork involved. In an effort to have one go-to person, the province hired Coolen to work as the project manager for the CIAA initiative. Hurricane Juan became a CIAA deliverable, Coolen says, at the co-direction of the Langille and the EMO. CIAA hired a team of mainly former adjusters who were highly respected and reputable within the field to examine and manage programs. The association was able to bring in adjusters who were experienced in agriculture, fishing and forestry claims, all of which were of benefit after the hurricane.

“Fundamentally, the end result, the province of Nova Scotia was left with a protocol and a system of guidelines bar none in the country,” Coolen says. “We believe we’ve been more effective, the province of Nova Scotia has been more effective, in the recovery under the DFAA than any single province in the country in any disaster.”

Beneficial to provincial governments

When the floods hit in early 2003 followed closely by Hurricane Juan, the claims volume became such that a more formal process was required to deal with the influx, versus the previous method of handling the claims in house or with local adjusters, Langille says.

And while there are highly professional adjusting firms in Nova Scotia, there simply isn’t the population or the claims volume to warrant largely staffed offices. Therefore, the availability to bring adjusters to bear just doesn’t exist in the format necessary for a larger disaster. One adjusting firm would not be able to offer up the number of adjusters required, but the government wanted to have Nova Scotia adjusters working on the claims. Therefore the answer, according to Langille, was to bring CIAA on as the intake group who would subsequently distribute the claims to adjusters across the province.

With CIAA, the option exists to request adjusters from other jurisdictions to bolster the ranks to try and get the work completed as quickly as possible, Morton adds.

It’s just common sense to have something in place, Wayne Johnston says. “Otherwise, who do they call on? There’s not a group out there available that has experience in the adjusting of losses and having the ability to be able to put a team together to respond.”

During a disaster there are frequently insured aspects and uninsured or underinsured aspects. By forging a relationship with the CIAA, the government does not run the risk of being unable to find adjusters to handle the uninsured claims — the pool of adjusters widens on a national level, whereas when one firm is contracted out, the pool is limited.

In the case of the current New Brunswick flooding, Johnston was able to call upon retired adjusters who were not busy handling insured claims. “They are the ones that have been around and been through it before, so you have a tendency to not require as much direction,” he notes.

A particular acumen of understanding is required when dealing with and interpreting contracts and because the process is so similar to that of the claims industry, the CIAA is a logical fit.

“CIAA provides a comprehensible deliverable of resources again not available in any other industry,” Coolen says. “You can’t be better prepared than to have the resources and the skill sets available should a disaster occur. You don’t want to be training people when the disaster occurs.”

By having an agreement, the provincial government is able to train adjusters before a disaster on how to handle the claims to meet any federal government audit requirements. Because adjusters are already trained on how to handle insurance claims, the learning process is not large.

For Langille and the province of Nova Scotia it is a matter of needing people in the field without delay to help those affected by the disaster. In order to do that, they identified the CIAA as a group that comes with the required expertise and no learning curve. In addition, by working directly with only one association, there is no loss of communication often found when working with multiple groups and less time is lost trying to communicate with many different contacts.

“When you have an oversight body, it allows you to flow your communications very smoothly to the people in the field,” Langille says.

Forging a relationship with the CIAA also removes some of the impediments often produced by administrative runaround.

“By working with the CIAA, EMO has a constant resource pool of experienced claims adjusters upon whom it can call when the need arises,” Grant King, vice president of operations for the Atlantic region at Crawford & Company (Canada), Inc. “EMO does not have to go through any tendering process for each and every occurrence and the terms and conditions of CIAA member firms are agreed to in advance of claims handling and administered by a CIAA representative in concert with EMO. This provides assurance that their claims for uninsured damages will receive prompt attention and not be delayed by administrative processes.”

Not to mention, there is only one bill for one vendor that requires processing only once saving time and government resources. “If we were dealing with adjusting firms we would have had multiple bills on every file, so from an administration perspective it was very tight and tidy on moving that forward,” Langille says.

Fees schedules can be set in advance so that there are no surprises, hidden costs or unnecessary surcharges. “We knew exactly what we would get for a flat fee, we knew exactly what we would get for time and expense,” Langille notes. “So we knew if we were going to go into a very, very large issue it would be time and expense, but it was very clear on what level the incremental expenses would be set at.”

Not to mention, the additional support the association can offer in stressful times.

“They were a great help in 1997,” Wayne Matthes, supervisor of disaster assistance, emergency measures organization with the province of Manitoba, says. “That was a God send to get these people. To bring them in and offer very limited training and be able to pull it off and get those initial cheques out to the people.” The centralized ability to deliver the adjusting resources and consistent delivery and quality of those adjuster resources is beneficial to the various provincial EMOs, Barber says. The provinces understand there is a resource available out there and it’s easily accessible. The CIAA understands that EMO has its own requirements for delivery of various programs — noting that different catastrophic events will have different programs developed by an EMO to respond, each likely having a different protocol and the CIAA follows the instructions of the client, no matter who the client is.

“The number one [benefit] is that (a contract with CIAA) easily meets the procurement guidelines of government: It’s a defined vendor who can come in (during) an emergency situation and provide that level of service,” Langille says. “Number two: They are an oversight body that clearly can understand your business and so when you sit down with them and you apply the claims process that you want, there’s not a learning curve there. They understand and it’s really adapting to reporting requirements and the assessment requirements that we desire.” Morgan notes that the combination of a skilled labour force, quick response time and regional diversification, partnering with the CIAA is beneficial for any provincial government’s EMO team. “Certainly we’ve had a good relationship with CIAA and they’ve done some sterling work for us — above and beyond in many cases.”

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The adjuster knows how to remediate and deal with various situations; adjusters are quick on their feet and can mobilize quickly.

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“Fundamentally, the end result, the province of Nova Scotia was left with a protocol and a system of guidelines bar none in the country.”

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It’s just common sense to have something in place.

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“When you have an oversight body, it allows you to flow your communications very smoothly to the people in the field.”