When big storms go bad: CAT adjusters are the insurance industry's frontline against natural and man-made catastrophes. In the aftermath of Hurricane Dennis, Risk & Insurance's Matthew Brodsky traveled with adjusters from Crawford & Company. This is his account of how—and why—these can-do men and women took on a storm predicted to be as devastating as last year's Hurricane Ivan

Risk & Insurance, Sept 1, 2005 by Matthew Brodsky

At the start of all storms, there's always a lot of "hurry up and wait." But with Dennis, the waiting threatened to be all there was. Storms are these folks' livelihood. Or as one member of the on-site PROACT joked, "Storms is good for business."

Business looked bad. Depending on the company they work for, CAT adjusters are paid by the hour of adjusting, or they get paid a certain amount per number of claims. Either way, Dennis was a dud, financially.

Emotionally, the mantra among Trice and his adjusters was one of sympathy and relief. The people of Pensacola wouldn't have been able to handle another Ivan, said Trice. It's a bit contradictory, making money off other people's misfortune, and a bit of a touchy subject. One adjuster, for example, refused to drive his luxury sport sedan to confirm a claim, preferring instead his utilitarian looking SUV. A luxury sedan just wouldn't look right.

Part of the concern could have something to do with fear of being wrongly associated with public adjusters, who have the unsavory reputation as shysters who flood into hurricane-ridden sites like litigators racing to a car wreck. It got so bad in Florida last year with public adjusters--and their imposters--that undercover "adjuster police" patrolled loss sites to bust adjusters without licenses. Tales of public adjusters fleecing senior citizens during Ivan still floated around Pensacola after Dennis.

Another adjuster said that understanding adjusting is all about perspective. To illustrate the point, he recounted a claim he had done years past at an autobody shop. A storm had thrown a pole into a recently repaired car. The adjuster told the business owner that he must feel lucky that the pole only wrecked one car, while three others nearby were unscathed. Actually, the owner replied, he was disappointed the pole had missed, this adjuster said.

SAFETY, SECURITY, SCOPE

On the most fundamental level, though, CAT claims management services such as the Crawford team provide manpower to insurers. When insurers or self-insured corporations need, say, 100 adjusters for a single event, they call Trice or one of his competitors, and they rescue insurers before the storm of claims drowns them.

In the immediate aftermath of the storm, modeling agencies were predicting insurance industry payouts ranging from $1 billion to $5 billion.

A later estimate, released by ISO's Property Claims Services July 27, showed that property/casualty insurers were expected to pay policyholders in tour states $900 million on claims for insured property losses from Dennis.

Clearly, insurers did have claims, and some were rather large. One such loss occurred at a shopping mall in Pensacola. Dennis, as hurricanes are wont to do, had spawned a tornado, and it had barreled into the commercial center. With such a big claim, Crawford's CAT team handed it off to Crawford's Technical Services Group of Executive General Adjusters--Tech Services for short.

The adjuster for this particular job, Pete Howell, a man with three decades of experience in the business, arrived in the area Thursday morning. His first order of business at the site, he says, was "safety, security, scope."