Shades of Delay

By Mark Goldwich

In this blog, I want to give you examples of what I call early-phase delays. These are delays that come in the first stage, the stage immediately following the disaster or insured loss. These examples of delay are sometimes the most shocking ones to people who file claims, because they expect to be treated as customers, rather than adversaries, by their insurance company. (By the time policyholders get to mid-phase and late-phase delays, they’re not quite as shocked by the behavior of some insurance companies and other players who are supposed to represent their interests.)

Q&A: What will happen?

English: New Orleans, La. August 30, 2005 --Ae...
English: New Orleans, La. August 30, 2005 --Aerial view of New Orleans and the surrounding area showing the flood waters and damage caused from Hurricane Katrina. New Orleans continues to be evacuated as a result of floods caused by failures of the Federal levee system. Photo by Jocelyn Augustino/FEMA (Photo credit: Wikipedia)
• Will there be enough manpower to process the claims that (predictably) follow a natural disaster?
No. A cynic might tell you that this manpower shortage is intentional. I can’t know what the intentions of large organizations like insurance companies are, so all I will be able to say for sure is that, the insurance company will not have enough people on the ground to process the deluge of claims that will follow a major fire, flood, hurricane, tornado, or other significant event. By a remarkable coincidence, this works to their financial benefit. And believe it or not, this “manpower shortage coincidence” takes place over and over again, year after year.

• Are you talking about the first few days following the disaster before the insurance company “calls in the troops”?
No, I mean a period of weeks or months immediately following the catastrophe that triggers your insurance claim. And for many insurance companies, there really are no full-time “troops” for them to call in.

• Why not?
Insurance companies generally staff on a permanent basis at a level that’s meant to handle claims that take place for more common events like kitchen fires, pipe leaks, thefts, and other routine forms of property damage or loss. In other words, they simply don’t hire enough permanent claims staff to cover disasters in addition to the more ordinary claims.

• Is that because insurance companies don’t know whether disasters will actually take place in a given twelve-month period?
Given the industry’s historic obsession with probability, and with actuarial statistics connected specifically to things like fires, floods, hurricanes, and tornadoes, this seems like an unlikely explanation. Some of the larger insurance companies do hire additional staff to handle catastrophe situations, but certainly not as many as are actually needed.

• Could they hire enough full-time staff to do the job for disasters that they know, or strongly suspect
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will eventually take place?
If you mean “can they afford to,” that’s a matter best discussed with the executive management teams, boards of directors, and stockholders of insurance companies.
Although I’m a former insurance company employee myself, I was not privy to these sorts of internal decisions in any meaningful detail.

• So how do insurance companies process claims if they don’t have the manpower to handle them?
Basically, they outsource. In much the same way that Information Technology companies outsource programming and technical service jobs to other countries, insurance  companies utilize independent adjusting firms that subcontract with adjusters who can be sent to a disaster site to work for an insurance company.

• What happens if there is no disaster?
If there is nothing going on in the form of insurance work, then these people have to fend for themselves. Some are able to work year-round for insurance companies. Many others go back to whatever work they did before deciding to be Independent Adjusters. And still others just wait for the next disaster, living for extended periods off money made working the last disaster – semi-retired, I call them.

• What kinds of credentials are adjusters required to have?
Less than you might think. In many states, they don’t have to have a college degree or even need to be licensed. Even in states which require a license, the Independent Adjusters don’t need to be licensed before the storm; they simply get “temporary” or “emergency” licenses once they start working for the insurance company. They could literally be hauling manure one day, and adjusting your loss the next.

New Orleans after the Hurricane Katrina levee ...
New Orleans after the Hurricane Katrina levee failure disaster. (Photo credit: Wikipedia)
• Once a storm hits, are there lots of insurance adjusters swinging quickly into action? 
The insurance companies would say yes, and you can be sure there will be a news clip with at least o
ne adjuster quickly on the scene looking appropriately concerned. Even so, my personal experience is that there are not nearly enough adjusters getting to the site when they should, and I believe most storm victims would agree with me. Ultimately, the answer depends on one’s definitions of the words “lots”, “quickly”, and “action.” I can predict, confidently, that you won’t consider the adjuster’s appearance to be timely.

• What’s the holdup?
When a storm or other disaster hits, the independent adjusting firms get a call from the insurance company. Their people start calling people, who start calling other people, who start calling still other people. Then the independent adjusting firms start looking for a place to set up their offices, or perhaps they wait for the insurance company to set up
facilities. As a practical matter, independent adjusters (who are the people typically given assignments through these companies) are usually left to their own devices when it comes to traveling to the disaster site, finding a hotel to stay at and securing other support services. You can imagine how difficult it is to secure undamaged, available housing and office space right after a disaster. Needless to say this, too, slows down the processing of your claim.

• What actually happens when I call the insurance company?
If you can get through at all, you’ll probably get the number of a claims call center.

• Okay, what happens when I reach the call center?
Typically, they take your information. They can’t do much of anything else. Unlicensed call center personnel often can’t even tell you how much the deductible is on your policy. These people are temporary employees who are not well trained and (usually) not particularly motivated. They take down the information, either handwritten on a simple store bought pad or company created sheet of paper, or they may transmit an e-mail or generate a message printout. Each of these calls represents a message that an adjuster working for that company is supposed to return. That is, if the message gets to the right place.

English: (Photo credit: Wikipedia)
• How long is it going to be before I hear from that adjuster to set up a time for inspection  of my property?
This is the sixty-four-thousand dollar question. The best answer is that you should probably be prepared to wait anywhere from one week to three months to get even an initial call back. I would suggest if you haven’t heard back after a day or two, you should call back – the adjuster probably lost your message. Call, leave message, wait, repeat. Call, plead, leave message, wait, repeat. Call, plead, plead some more, leave message, wait, repeat. Does this really sound like something you’d like to do while you’re without power, without air conditioning, without hot meals, and without clean water … for, say, two months?

• You’re kidding, right?
I wish I were. I recently talked to an adjuster on behalf of one of my clients after a natural disaster. When I finally was able to speak to him after weeks and weeks of calling with no response, I asked him to explain his failure to return my messages. He said, “Look, I get 80 messages a day and I have time to return maybe ten of those messages before I get another 80 the next day. That’s the system. You do the math.”

• That’s an exceptional case, right?
No, I’m afraid that was quite typical for this insurance company – and probably not too different from most other companies. It really is all about staffing. The call center folks
are there, but they can’t help. You need to talk to the adjuster. But the adjuster is not there. He or she is out “in the field” adjusting losses. If they were available to talk to you, who would adjust all the losses?

• Is it a Catch-22, or is it just a coincidence that happens to benefit the insurance company? Whatever it is, it’s not going to work out in your favor.

• Couldn’t insurance companies afford to do this differently?
One would certainly think so. The question then is at what cost? Odds are the insurance
companies would find it too expensive to provide the level of service expected by consumers.

• So do I have to wait a couple of weeks for the insurance company and the independent adjusting company to set things up … and then another week to three months more just to hear back from the adjuster for the first time?
That’s pretty much par for the course. Sure, you might get lucky and be the first person the adjuster calls back. You might also win the lottery tonight. I wouldn’t count on either.

• Yeah, but things will get better after I hear back from the adjuster, right?
Wrong. I’ll tell you all about mid-phase delays in the next blog…

Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.


  1. I don't know how Mr. Goldwish became so smart about all this, but he's the first on my list should I ever need an insurance adjuster.

    1. After 27 years as a licensed adjuster, if I could not learn at least THIS much, there would be a problem! And thanks for the vote of confidence.

  2. It is very interesting to see all the ins and outs of disaster claims. Its also very unfortunate that there is so little companies can do "at first" due to manpower. When my family moved from New Orleans, circa Hurricane Katrina time, they were extremely lucky to have family and friends willing to help them due to the lack of response from FEMA, insurance companies, and the government. I think everyone who could experience some form of disaster, should read this article for them to get a true understanding of the steps insurance companies take.

  3. The only way that most people learn how insurance companies REALLY work is by submitting a claim and then watching as the wheels turn ever so slowly.

  4. Let us all pray we don't have a natural disaster here any time soon, (or before I move on to meet my maker). :O