Connecting the dots on flood damage claims
Cipher Professional helps home owners get back into their homes after the Christmas 2015 floods
On Boxing Day 2015, in the North West of England, a street was flooded when the River Calder rose 28 feet and the nearby canal over-flowed, creating a large flood damage claim. Mr & Mrs W’s bungalow was badly flooded, with every room affected, so they had to move into alternative accommodation. The property had been flooded around 15 years before.
Cipher UK’s professional services division, Cipher Pro, was invited to tender for the strip out works for several large flood damage claims including this property, 10 weeks after the flood event. Cipher Pro immediately assigned Spain Building & Maintenance and the strip out works were carried out quickly so that drying could commence. Quick drying is imperative for flood damage claims.
In March 2016 Cipher Pro was asked to tender for the flood damage claim reinstatement works whilst the drying was carried out by another organisation. Again, Cipher Pro assigned Spain Building & Maintenance and the tender was submitted on 8th April 2016.
The tender was authorised on 20th April 2016 and a pre-start visit took place on 26th April between all the parties concerned, including Mr W.
The works were completed on schedule by 15th August and the delighted customers moved back into their home.
Too much delay
So it all sounds like the model insurance claim. Mr & Mrs W were delighted with the work done by Spain Building & Maintenance and said “Des and his team have done a wonderful job with our home”.
However this flood claim, as with many other claims that we get involved in, suffered from supply chain fragmentation.
The delay from incident to strip out was excessive and allowed moisture to further penetrate into the fabric of building, making it harder and more expensive to dry out and reinstate.
The sequence of events took too long. By splitting the drying from the strip out works and from the reinstatement works, weeks of delay were built into the claim. If the drying had been given to the same contractor as the strip out and reinstatement works we know through experience that at least one month would have been saved through fewer touch points, better communication and reduced time and cost by overlapping the drying and reinstatement phases.
As often happens in a surge event interim payment requests were not processed quickly enough. A request on 30th June wasn’t paid until mid-August, putting strain on the contractor’s cashflow.
There is one area where things could definitely have been done better – flood resilience planning. Mr & Mrs W decided they wanted to make their home more flood proof for the future. But it was only during the reinstatement works that they realised this was possible.
The tendered scope of works prepared by the loss adjuster was prepared on a like-for-like basis. No thought was given to flood resilience measures by the insurer or the loss adjuster.
However Mr & Mrs W decided they wanted to put flood doors into their property. To facilitate this the insurer offered a cash settlement for the doors from the scope of works so that the money could be put towards flood doors. To gain additional funds it was then left to Mr & Mrs W to apply to the council for a £5,000 grant, which added to the delay and stress. Not only did Mr & Mrs W have to make up the shortfall in extra cost for the flood doors, but the grant took time to come through meaning the doors weren’t installed until after the reinstatement works were completed.
There were other flood resilience measures that could have been done such as raising sockets up the wall. Surely such measures would be sensible in a property situated near a river and a canal that has flooded twice and is likely to do so again, causing more indemnity expense for the insurer and stress for the customer?
This case is a perfect example of the disjointed approach that the recently published Property Flood Resilience Action Plan refers to (also known as the Bonfield Report).
The Bonfield Report says:
- there is a disconnect between insurance reinstatement and resilient repair of properties…. loss adjusters and builders do not understand the benefits of resilient measures
- it is not clear that the insurance industry values property level resilience or incentivising people to have it.
Appropriate flood resilience measures should prevent water entering a house or minimise the impact should water enter the house, speeding up the recovery process. Without such measures the misery and disruption will continue for thousands of home owners.
The Bonfield Report has made several recommendations that will increase the take up of flood resilience measures.
Our contractors and Cipher Pro staff are keen to work with any insurer to develop a flood resilience measures plan for any new flood claims that arise this winter.
Please get in touch if you are an insurer wanting to connect the dots on flood claims – reduce your flood indemnity spend in the future and reduce the potential misery and disruption for your clients.