Anti-Fraud SIG
There is a lack of transparency in and understanding of the Damage Management sector, according to one of its main representative bodies, which could be slowing progress in dealing with flood claims.
Jonathan Davison, strategic development director of the British Damage Management Association, told the CILA Anti-Fraud SIG that the BDMA understood a lack of communication between insurers, adjusters and contractors can allow leakage to increase and that “fraud can and does happen”. However, he was more concerned about poor practice, too much variation in remediation and a tendency for contractors to focus on “stripping out” rather than restoring property after floods.
“Fraud is committed however it is not widespread, but there is a lack of understanding of the damage management industry because many within the insurance industry don’t understand what these contractors do. A lot of contractors, predominately not those involved in the supply chain process, may be open to, dare I say it, ‘spin a yarn’ when it comes to requirements of a particular job,” said Mr Davison.
However, Mr Davison pointed out that accusations of fraud may be misplaced: “Many contractors use a variation of approach. Often you will see one contractor using one type of equipment and another one using something else. When there is discussion between the contractor and the adjuster, a particular process may be described and justified however does the adjuster know whether or not the advice given is correct? The difficulty at the moment in terms of connecting that to fraud is that there are other issues which cause leakage; poor practice, inadequacies in terms of manpower and equipment, as well as adopting the wrong approach. There are many excellent contractors but the BDMA’s objective is to give the wider industry further knowledge so you can take that and understand whether a job is being done correctly or not, whether a certain piece of equipment is required, or not.”
REINSTATEMENT v RESTORATION
“There is also an issue for us with regards to restoration versus reinstatement,” continued Mr Davison. “There is far too much stripping out and it’s become almost common practice in certain areas to go in, wait until the water has subsided, do an initial decontamination and then strip everything out. We believe reinstatement should not be the norm when it comes to concrete floors, floorboards, joists and so on. A property can often be dried out with minimal ‘strip out’ therefore reducing claim cost and vastly speeding up claim resolution. There needs to be a sea change with regards to this particular area. We need to talk more about restoration.”
Mr Davison pointed out that unfortunately, there was “tangible” and immediate benefit in reinstatement of property because claimants and even adjusters would like to see something happening.
SCOPE OF REPAIR
Mr Davison explained the BDMA was now inviting adjusters to use the association as a resource to obtain accurate information on scope of repair: “You can have exactly the same two properties next door to one another with precisely the same damage. One would have everything removed and the other wouldn’t, one property would be drier four or five months before the other. We’ve got to get to grips with this issue. It’s partly the fault of the industry that I represent, in that we are not being as transparent and forthcoming as we should be in terms of what should be standard practice. We have as a result opened up our wealth of knowledge through the BDMA so you as adjusters can get a better idea of when an action is required and when it is not.”
“If a contractor’s mindset is to strip out as much as possible in order to dry a property quicker, then that person needs to be challenged.”
Ralph Savage
