OBSERVATIONS OF A CAT ADJUSTER

by Ronald J Zaremba CPCU, AIC, ARM
Zaremba Claims Service, Inc.,

If you tell a member of the Public that you are a 'CAT ADJUSTER', they generally envision you as a physical therapist for felines. At least that perception is more positive than the one held for ‘storm trooper’. There are many full time CAT ADJUSTERS, however, most CAT ADJUSTERS are regular property and automobile adjusters who volunteer for temporary assignment at the, site of a catastrophe.

All catastrophes are traumatic for those caught up in the forces of nature. Earthquakes are particularly traumatic because. they are unpredictable and occasionally very violent. The Northridge earthquake was particularly rude and traumatic., Picture yourself nestled in your nice warm bed at 4:30 AM when you are awakened by your home bouncing and violently shaking. The roar and the din from your kitchen cabinets as they empty and the contents crash to the floor, your paintings and pictures dropping and breaking your furniture overturning, your chimney crashing onto the roof or onto the patio outside, your children and pets terrified and howling. All this lasts for less than a minute. Then it is quiet and very dark. No lights, no power. Your home and personal property are dumped, damaged and destroyed. Broken glass litter, the floors. That is what the lucky ones faced on the morning of January 17, 1994 all throughout the San Fernando Valley north of Los Angeles. The unlucky ones suffered more. Apartments, houses, and commercial buildings collapsed, trapping, insuring and killing their occupants. Unlike hurricanes, hail storms and tornados, earthquakes continue to occur regularly in the effected area.

After shocks are a predictable part of the earthquake phenomenon. Normalcy is not quickly or easily reached. The trauma continues even through the adjustment process. You as a CAT ADJUSTER on earthquake loss duty get to at least partially experience the forces that created the disaster. A problem related to earthquake frequency is the earthquake deductible. The earthquake deductible is large and applies separately to all damage caused by earthquakes occurring within a seventy two hour period. The time limit on the deductible may yet get tested as its application will not prove popular.

The damage from an earthquake is widespread, but not evenly distributed. The amount of damage suffered varies with several variables, including distance and orientation to the shockwaves and the epicenters, soil stability, construction, and what precautions have been taken. It is not unusual to see one or two structures "red-tagged" (condemned) in a neighborhood of structures that were pretty much unscathed. Surprisingly, older smaller wood frame houses did better than the newer larger houses with spans and other architectural features. Another surprise is that in a land of no winter and no wood, nearly everyone has at least one masonry fireplace. Masonry structures such as fireplaces and concrete block walls fared poorly. Code changes after

The earthquake requiring more reinforcing in masonry structures, did not make adjusting these losses any easier as the insurers resisted paying for code improvements, even under replacement cost policies.

The adjustment process is complicated by large deductibles. Deductibles are typically ten per cent of the coverage afforded. Thus a ten per cent deductible would separately for the building loss, the other structures loss, and the personal property loss. If the coverage is $150,000, dwelling, $15,000 other structures, and $105,000 on personal property then the separate ten per cent deductibles are $15,000 on the dwelling, $1500 on other structures and $10,500 on personal property. Is a fractured concrete walkway adjacent to the house part of the dwelling coverage or an "other structure coverage ? How about a concrete patio under a permanently attached roof?

The importance of these questions depends on whether the insured. is meeting 'his deductibles or not.. To further complicate the problem, some insurers offer five per cent deductibles, and some offered aggregate deductibles. Because of the large deductibles, all cracks in walls, sidewalks etcetera are now "earthquake damage" because the insured never noticed their existence before the earthquake and he is trying to get his damages over his deductible. Fortunately, fresh breaks in concrete are fairly easy to discern but not all are easily resolved.

Good neighbor fences create another problem. Common concrete block wall fences are indeed common the San Fernando Valley. Most were built before the insured acquired the property, or if not, his neighbors have since moved and the new neighbors don't profess much interest. Partly because of the walls, and partly because the neighborhoods of the San Fernando Valley are probably more culturally diverse than any where else in the world, the neighbors don't know each other. Not every one has earthquake insurance. The concrete block walls are expensive (about twice the cost of a good six foot cedar fence).

After the earthquake, the building code on block wall fencing was upgraded and the insurers are not paying for the "code improvements". The insurer is not going to pay more than the insured's interest in the damaged common block wall, 50%, less applicable depreciation and deductible and nothing toward any code improvements to rebuild the walls. Thus the insured is faced with inadequate funds to rebuild the block wall fences to restore his cherished privacy. His neighbors interest and ability to finance their share of the rebuilding may be even less. The situation creates a lot of discussion in the adjustment process.

Unique problems present themselves in every catastrophe. When widespread damage occurs, the policyholder need your professional help to explain how their insurance can help them, to appraise the damages and the financial help from their insurance to recover their loss. You fulfill the purpose of our industry by helping others recover their losses. Your presence and prompt assistance is important to the policyholder and to and the insurance industry. Without your help, we can not effectively deliver our promise to "help., 'You should volunteer to go to help others. If you handle property or automobile damage appraisal claims, chances are good. that you have or will be asked to help. There are only a few valid reasons for not volunteering to go on catastrophe duty; your health won't tolerate the increased workload, it is too important to you and your family that you stay, or you are not adequately trained. Don’t go if your health won't withstand it. Don't go when your family needs you. You can not leave your family problems behind and realistically expect the problems to solve themselves while you are away and expect your work to be productive. Don't, go if you lack training. There is no shortage of well meaning but incompetent help.

The rewards to you are many. The gratification and respect you receive from the policyholder is intangible but real. The rewards you receive from your employer and the industry are generally excellent. Volunteering as a cat Adjuster subjects you to hard work and long hours. Working as part of a catastrophe claims team is at times, frustrating and exhausting and at the same time exciting and exhilarating. However, the work and the regimen will test your abilities, will expose you to different cultures and beliefs that expand your horizons, will provide you an opportunity to meet others to extend your personal network and will help keep your life in perspective. If you have the ability to do the work, the attitude to want to help, don't pass up the opportunity to be a CAT ADJUSTER. You will be a better person by helping others.

(An edited version of this article appeared in CPCU Claims

Quarterly, Spring 1994)