CAN AN INSURNACE COMPANY SLOW AN ADJUSTMENT DUE TO COVID-19?
Many property owners are frustrated by slow insurance claim processing due to COVID-19. People ask whether insurance companies can slow the process due to the pandemic. My general answer is, “yes, they can”, but only under certain circumstances.
The Insurer’s Concern
If an adjustment, or subsequent appraisal, requires an on-site visit an insurer may slow the process. Like all employers across the country, insurance companies must consider their liability exposure. Some employees may refuse to go, and state law may shield them from retaliation. Insurers may be wary of sending an employee with COVID-19 and infecting property owners. In that context you can see why insurance companies may slow site visits necessary for an adjustment.
Indoor vs. Outdoor Site Visits
In assessing whether an insurance company should slow an adjustment I draw a distinction between site visits that are indoor those that are outdoor. The core behind most stay-at-home orders is to maintain social distance from other people. I find no reason why outdoor site visits to review shingles, siding, etc. can’t be done with people maintaining social distance. I’ve rarely seen the need for adjusters, property owners, contractors, etc. to huddle together to view outdoor property. I think property owners can insist on outdoor site visits because everyone should be able to maintain social distance.
Indoor site visits can be different. People are in closer proximity, and someone in a home with COVID-19 has spread the virus everywhere. However, I think that if everyone necessary for the site visit is confident they do not have COVID-19, or the risk of transmission is low, the property owner and insurer should be able to develop a protocol to maintain a safe distance. Just like at a grocery store where people now stand more than six feet apart. Property owners and insurance adjusters can do the same thing.
Not all insurance adjustments should be delayed by COVID-19. I think most insurance company employees are working remotely with full access to computer servers. For insurance companies that have full access to their documents via electronic resources, and who communicate via email and phone anyway, there should not be a significant delay in paperwork. Insurers can still generate adjustments. Xactimate software, the software used by so many insurance companies to issue an adjustment, operates just as well from a laptop at home as it does from a desktop at the office. The paperwork phase of an insurance adjustment should not be significantly delayed by COVID-19.
When an insurer delays an adjustment a proper owner, or its advocate, ought to first ask whether a site visit is required, and if so, then ask whether it is indoor or outdoor. Answers to these questions should drive the property owner’s response. Property owners should immediately insist on a change in deadlines if there must be a delay. Insurance committees regularly enforce deadlines for replacing material and for filing claims in court. Delays in an adjustment, or an insurance appraisal, due to COVID-19 should not result in the property owner missing a deadline. Property owners ought to demand an extension of deadlines in case of any COVID-19 delay, and insurance companies operating in good faith ought to grant them. A demand ought to be in writing, and property owners should insist on a response in writing within 10 days.
If you have any questions regarding an insurer’s delays, contact me.