PAGE 4 Wildfires Continued The Urgency of Time The nature of homeowners wildfire damage — frequent, severe, and widespread, with many fires resulting in total losses — has led to a new sense of urgency regarding the amount of time needed to rebuild after a wildfire disaster. The edition of Adjusting Today referenced above describes the impact of “demand surge” on the time and money needed to repair or replace damaged structures. Other things being equal, it takes longer and costs more to reconstruct a home when nearby properties are also damaged than if the home suffered damage on its own. That’s because, in the wake of a disaster, there is increased demand for building permits, design services, demolition and debris removal services, and for building contractors plus the cost of their supplies and materials. It’s not uncommon to see demand surge increase the cost of reconstruction beyond the limit of coverage available in a homeowners policy, especially if that limit was determined on the basis of the replacement cost of a home without consideration for demand surge. The situation in California is different — and worse. “In an average claim we usually expect a dwelling to be rebuilt within 12-15 months,” says Robb Greenspan, SPPA. “For wildfire claims this time period can be 36 months.” Greenspan is president of The Greenspan Co./Adjusters International based in Northridge, California. According to Greenspan, it often takes two years after a total loss just to complete architectural plans and secure all the necessary permits for reconstruction. Those delays are compounded by turnover of claim adjusters assigned by insurers to each claim. “There can be five, six, seven of them,” Greenspan says. “Each one seems to start from scratch.” The problem of discontinuity among carrier claim adjusters in California became great enough to lead the state to enact a statute regarding the practice. Under the law, if a homeowners insurer assigns three or more principal adjusters to a claim within six months, the insurer must provide the policyholder with a detailed written report on the status of a claim and the matters still under consideration. Time to Collect Adjusters are finding that the extended time needed to rebuild homes after a wildfire is putting added pressure on their clients to settle for less than what it will cost to rebuild. Insights for Your Industry PROTECTING YOUR PROPERTY 800.858.3900 | ggg-ai.com Sheila E. Salvatore, Editor | Editor@AdjustersInternational.com Copyright © 2022 Adjusters International, Ltd. All Rights Reserved. Insights for Your Industry® is published as a public service by Adjusters International, Ltd. It is provided for general information and is not intended to replace professional insurance, legal and/or financial advice for specific cases. E08-1026
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