Material shortages and supply chain problems are wreaking havoc among those trying to repair and replace property following recent hurricanes, wildfires, floods, and other catastrophes. While the adjustment of property insurance claims is always a dynamic field, this covid supply chain problem is very new. One veteran public adjuster told me at the FAPIA conference last week that the property insurance claims business keeps him young because there is “a lot more new than old” and change is always occurring.
Public adjuster Don Wood and his lawyer son John Wood recently wrote an excellent article on the current supply chain problems wreaking havoc upon property adjusters in How to Adjust Property Casualty Claims Amidst Global Roofing, Exterior Materials Shortages. Their advice is sound:
Our recommendations are to fully account for the increased costs and extensive delays caused by global supply chain shortages and to make accommodations to the restoration contractors and policyholders to avoid even further exacerbation of disruptions flowing from wrongfully underpaid or denied P&C insurance claims.
The article gave current examples of current price increases and supply problems, even offering readers to ask for the actual letters:
For instance, according to a Nov. 5, 2020, letter to customers issued by Louisiana-Pacific Corporation LP Building Solutions, ‘In order to align more closely with market prices, we are announcing a 2021 price change. The weighted average price impact of these changes is projected to be between three to five percent . . . Due to market demand, we will be unable to allow any additional quantity of products to be purchased in Q4, 2020 in excess of your current allocation.’
Furthermore, according to an April 21, 2021 customer letter from ABC Supply Co. Inc., ‘Steep slope roofing manufacturers have announced their third price increase of 2021. The most recent is for all orders shipped on or after June 14, 2021, regardless of the order date. ABC Supply will raise prices on all shingles and related accessories five to seven percent for deliveries on or after June 14, 2021.’
The bottom line is that readers of this blog should go to the link of the Woods’ article because it provides a very good explanation of many issues facing adjusters trying to properly evaluate the time and amount of the policyholder’s loss.
Thought For The Day
They always say time changes things, but you actually have to change them yourself.