Insurers Used Variety of Resources to Reach Out to Fire Victims

In the midst of the blazing wildfires that overwhelmed seven Southern California counties in October, insurance companies sprung into action. Most said they had learned from past catastrophes and that preparation was key to minimizing losses.

According to Erron Al-Amin, senior director of personal insurance marketing at Fireman’s Fund, even before the fires were claimed a disaster, the company “proactively contacted agents and brokers,” to make sure they were prepared. Susan Murdy, director of media relations for Fireman’s Fund, noted that daily e-mails were sent to agents and brokers about types of coverage that was being provided, and allowances the company was making for customers.

A message to agents and brokers on Oct. 25 stated, “Fireman’s Fund will forgive late premium payments up to 60 days following the wildfire in the fire zone areas in Southern California.” Issues such as landscape damage, air quality issues and special coverage for insured hotels also were addressed. In the days that followed, e-mail updates offered information about the progress the company had made in reaching out to its policyholders.

More recently, “Personal Insurance Customer Service employees proactively placed calls to about 1,500 policyholders in the fire zones. They personally contacted over 500 people, with another 500 receiving voice mails,” Murdy said. She indicated the phone calls were also a way for Fireman’s Fund to check in on policyholders, ensuring that they were OK.

Mitigating Risks

Al-Amin also mentioned that given the fact this was a drought year and the risk of wildfires was high, the company already had a Wildfire Preparedness Program in place that instructed people on how to get their property and themselves ready. The recommendations, posted on the company Web site (www. firemansfund.com), include ensuring that building materials for the roof and exterior structure are fire- and heat-resistant. The site also advises that it is important to “[c]reate ‘defensible space’ around structures and driveways to greatly reduce the risk of damage.”

Fireman’s Fund was not the only company that took pre-emptive measures to mitigate wildfire damage and assist with claims. Jonathan Freed, national spokesman for State Farm Insurance, said his company organized teams of people who are constantly planning, working on, and revising their wildfire plan. “So far things are working exactly as planned,” Freed said.

Similarly, USAA has a team that is prepared for such catastrophes. Justin Schmitt, executive director of property and casualty communications, noted that the national team, comprised of specialized catastrophe field claim adjusters, dealt with 800-plus property insurance claims and 125 or so auto insurance claims that were received as of Friday, Oct. 26. A large call center has proven helpful for members as well.

For Firefighters

Making sure the company is prepared is just part of the process. Fireman’s Fund wanted to ensure that the firefighters were prepared as well. Thus, with its Heritage Program, fire departments in the areas that were affected have received more than $2 million in the past three years to put toward firefighting technology. Allstate has provided grants to Los Angeles fire departments, and “efforts are ongoing,” said Terri Stackhouse, senior communications consultant.

Safeco offered a $50,000 grant to the San Diego/Imperial County Red Cross. It also encouraged its employees and independent agents and brokers “to contribute to relief efforts by matching their cash contributions to the area Red Cross and the Salvation Army … up to $100,000.”

The Seattle-based company specifically wanted to make sure that children are taken care of. “Safeco is launching a countrywide employee drive to collect 1,000 brand new stuffed animals for children whose families have lost so much in the fires,” it said in a statement.

Relief Efforts

Generally, insurance companies said their level of preparedness was fairly evident if you look at how they reached out to policyholders, especially at evacuation sites. Many insurers went to great lengths to ensure that their customers had the information and the resources they needed. Information about how to file a claim is accessible through special hotlines, and agents and claims specialists were onsite to answer questions. Resources such as food and lodging also are being provided.

“In the immediate short-term, people need assistance to get back on their feet,” Fireman’s Fund’s Al-Amin said. The disbursement of temporary living checks is one of the many ways insurance companies are offering that immediate short-term help. Fireman’s Fund has staff in the affected areas, offering such services as emergency medical care, trauma counseling, assistance in locating temporary housing, and referrals for legal and financial assistance. Like most insurance companies, Fireman’s Fund has also set up a hotline for victims of the Southern California fires.

Mercury Insurance’s Randy Petro, San Diego senior divisional claims manager, stated, “When families have to evacuate their homes it causes a great deal of stress and uncertainty. Even though they may not suffer any losses, it’s still a very disconcerting experience, and we want to provide our policyholders with the support they need to help them get through this difficult time.”

Mercury also set up a toll-free number for policyholders to call to file a claim. Once the claim has been reported, adjusters will make contact with the policyholder within 24 hours, offering details of the policy benefits, a timeline that helps to manage expectations, and immediate disbursement of living expense funds, covering food, clothing, and other necessary provisions.

Mobile Response

Farmer’s Insurance deployed nine mobile response units (MRUs) in Southern California to distribute resources. A Mobile Catastrophe Claims Center, which was introduced 11 months ago, is manned by driver Randy Glenn, mobile command center operator, and his wife, Verdean, who take the MRU to disasters as needed.

In the current situation, the MRU was stationed at Gate A1 of Qualcomm Stadium, where up to 10,000 evacuees sought refuge. The Glenns, plus anywhere from 17 to 25 volunteers, provided breakfast, lunch, dinner and snacks for anyone affected by the calamity, whether they were Farmer’s customers or not. The volunteers are comprised of Farmers employees — agents, district managers, the CEO, and employees’ families.

Food is not the only thing being offered by the Farmers MCCC. The vehicle is equipped with satellite phones and Internet lines so people can get in touch with their loved ones, a large television to keep people informed as news progressed, toys and coloring books for children, and information about filing a claim. Employees at the MCCC also aided in distributing temporary living expense checks to policyholders that were forced to evacuate.

According to Glenn, “People are in shock, so we’re trying to do everything we can to keep spirits high.”

In addition to the MCCC, Farmers has more than 400 claims adjusters in Southern California to assist victims of the fires, the company said.

Communication Strategies

To help distribute insurance information to victims who have been displaced, some insurers have turned to mainstream media. State Farm’s Freed said all forms of communication need to be used in such a disaster — television, radio, print and human interaction — because getting information to the people is of utmost importance. Additionally, he said his company has people onsite in the affected areas. A 1-800 number was established for customers to reach catastrophe operators, who can settle claims over the phone.

During the height of the fires, Stackhouse said Allstate had radio ads running twice per hour on many of the major Los Angeles and San Diego radio stations offering information about the ways customers can file claims. The company also ran an insert in the Los Angeles, San Diego, San Bernardino and Riverside newspapers with the emergency claims service number.

Yet while insurers aim to assist their clients who have been affected by the wildfires, they note that some of the victims are their employees. At least one State Farm agent in San Diego lost a home, and a number of Allstate agents were displaced.

“Even though we are in the insurance business, we are on the same level as our clients and are just as vulnerable,” Freed said. “It keeps things in perspective and motivates us to really help them.”

Stackhouse commented that despite their losses, agents that were displaced by the fire worked at the evacuation areas and reached out to customers.

The general consensus is that it is too soon to tell what the extent of the damage may be and what additional measures need to be taken. The Insurance Information Network of California reported that the Southern California firestorm will likely top $1 billion. At press time, the figure was preliminary, with areas just being accessed by homeowners and claims adjusters, following mandatory evacuations. As insurance companies are given the go-ahead to assess the situation, they will know how many extra employees, if any, to deploy to the affected areas.

Nevertheless, some companies, such as Allstate, which is headquartered in Illinois, have called in extra claims adjusters from other states. And the company will call in more assistance as the need presents itself, Stackhouse said.

The adage that history repeats itself seemed to ring true in 2007. But thanks to the lessons learned in dealing with 2003’s Cedar and Old Fires, insurers went to great lengths to be proactive this time around.

Insurers emphasize that whether it is this disaster or a future one, crisis teams are in place prepared for whatever may strike. The companies also are constantly reviewing and amending their disaster policies as they learn from past experiences. The combination of collaboration, both within the company and with the clients, along with risk management implementation, has made 2007’s wildfire relief effort a success, they said.