Thursday, March 15, 2012

Should Disaster Claims Processing Be Different?

Bests Week's March 12, 2012 issue has a small news article on page 9 discussing the National Association of Insurance Commissioners' Property and Casualty Insurance Committee voting at its Spring meeting to hold a public hearing on whether the NAIC should create a model guideline for the processing of claims following a natural disaster.  Consumer representatives have called for special guidelines for disaster claims following natural disasters.  They advocate that Cat claims are very different than typical claims and require special handling and guidelines.  Issues like the appropriate duration for consumers to recover full replacement cost of personal and real property, streamlined inventory requirements in the event of a total loss, proper training in the calculation of replacement values, the availability of policy terms and conditions (often lost by the consumer after a natural disaster), and access to claims-related documents are expected to be discussed at the public hearing.

This is an interesting issue and an important one because one-off or routine claims are not under the same pressure as hundreds or thousands of claims resulting from a natural disaster.  Are special guidelines needed?  Any comments from those reading this blog?

At the Spring Meeting of the ABA's Tort, Trial and Insurance Practice Section on May 17 in Charleston, SC, the TIPS Disaster Initiative will have two panels of experts talking about the preparation for and the response to natural disasters.  Among those speaking are the Mayors of Birmingham, Alabama and Charleston, South Carolina, who will talk about how they have dealt with natural disasters, and Ed Collins, the National Director for ProtectingAmerica.org, who will speak from a disaster preparedness and response national perspective and may have some insights from the insurer perspective from his day job at Allstate.  The question of how claims arising from natural disasters are handled will likely be a topic. 

For more information about the TIPS Disaster Initiative and the Spring Meeting in Charleston, please click here.

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