Why on-site inspections are essential for accurate high-loss property damage claims

In the complex and high-stakes world of large loss property damage claims, the importance of on-site inspections cannot be overstated. Although the growth of technology has introduced remote assessments as a convenient and cost-effective alternative, the benefits of being physically present at the scene of the accident far outweigh the advantages offered by remote methods.

On-site inspections give adjusters and experts the opportunity to immerse themselves in the environment where the damage occurred, allowing for a comprehensive and nuanced understanding of the situation that is often unattainable through remote assessments alone. The ability to assess claims in real-time leads to more accurate diagnoses and scopes of work, which are critical to effective and efficient claims processing.

When adjusters or experts are physically present at the scene of the breakdown, they can observe the full context of the situation. This contextual understanding is crucial to identifying all factors contributing to damage that may not be apparent through photos, videos or even live streams from afar. For example, subtle structural problems or environmental conditions that contribute to damage may only become apparent when viewed directly. This depth of insight enables more accurate assessments and can significantly reduce the likelihood of overlooking critical details that could affect the outcome of the claim.

In addition, on-site inspections facilitate immediate decision-making and problem-solving. When experts are on site, they can quickly address any emerging issues, which is especially important in high-loss scenarios where time is of the essence. For example, if an adjuster identifies a previously unseen hazard or new damage development, they can make quick decisions about how to proceed. This not only minimizes downtime, but also helps prevent further damage, which can be instrumental in reducing the overall cost of the claim.

Another significant advantage of on-site inspections is the possibility of direct communication with the insured. In large damage claims, the stakes are high and clear communication is essential to ensure that all parties have a mutual understanding of the situation. On-site inspections allow adjusters to speak face-to-face with the insured, providing an opportunity to address concerns, answer questions and explain next steps in the claims process. This direct interaction can help build trust and reduce the likelihood of miscommunication, a common problem in remote assessments where nuance and intent can sometimes be lost in translation.

When adjusters and experts conduct on-site inspections, they should be aware of the following:

Wear and tear or neglect of maintenance: Signs of long-term neglect or deferred maintenance, such as rust, mechanical wear, or material deterioration, can be subtle, but are important to understanding the full scope of a claim.

Unusual damage patterns: Damage patterns that could indicate underlying problems (such as uneven settlement, localized wear) can often be more easily identified in person, where the inspector can see the property from multiple angles.

Accessibility issues: The actual accessibility of certain areas of the property, such as access spaces, bridges or basements, can only be fully assessed on site. These areas could harbor hidden damage that might otherwise be missed.

Odors and air quality problems: Certain odors, such as musty, smoke, or chemical odors, can indicate hidden damage, such as water intrusion, fire damage, or hazardous material leaks. These are often not detectable by remote assessments.

Insect or pest infestations: Evidence of termites, rodents, or other pests can sometimes be missed from a distance, but can be critical to assessing the extent of damage, especially in wood structures.

As technology has advanced, remote diagnostics for property damage assessment has gained popularity, largely due to its convenience and cost-saving potential. Remote assessments, using tools such as drones, satellite imagery and video conferencing, provide a way to quickly gather information about a damaged site without the need for travel. In cases where the damage is minor or where an immediate on-site visit is not possible, remote assessments can be a valuable tool. They can serve as an initial step in the assessment process, providing a preliminary overview that can inform subsequent on-site inspection.

However, despite the growing popularity of remote valuations, there are significant limitations to this approach, particularly in the context of high loss property damage claims.

Here’s a story I heard from a friend/adjuster:

John, a homeowner in a coastal town, suffered significant property damage after a powerful hurricane tore through his neighborhood. The storm caused flooding, strong winds and debris to fall into his home. Worried about the extensive damage, John promptly filed a claim with his insurer. Due to the widespread nature of the disaster, the carrier decided to use remote assessments to speed up the claims process. They asked John to send photos and videos of the damage. Eager to resolve the situation quickly, John followed their instructions, snapping pictures of the obvious damage: broken windows, a torn roof, and water-damaged floors. The remote assessment team reviewed the submitted materials and issued a preliminary repair estimate.

However, as the repairs began, the contractor noticed something troubling: the foundation of John’s house had shifted significantly due to flooding and wind forces. This subtle but critical damage was not visible in the photos and videos John provided. The foundation shift compromised the structural integrity of the entire house, which would require a much more extensive and expensive repair than originally estimated. Because this fundamental harm was not identified during the remote assessment, John’s claim was underfunded, resulting in additional delays and expense. The insurance company had to send an adjuster on site to reassess the situation, which not only lengthened the repair process, but also created significant stress for John. If the insurer had conducted an on-site inspection at the outset, it would have caught the structural problems early, saving time, reducing costs and ensuring that John’s home was safely and properly restored.

The risk of fraud is also a significant concern when it comes to remote assessments. Without a physical presence on the site, it is easier for fraudulent claims to go undetected. For example, damages may be exaggerated or pre-existing conditions may be misrepresented as new damages. On-site inspections provide a critical level of control that can help prevent such fraudulent activities. Adjusters can verify the authenticity of the injury and ensure the claim is legitimate, which is critical to maintaining the integrity of the claims process.

On-site inspections are essential for accurate high-loss property damage claims. They provide a comprehensive understanding of the situation, allow immediate resolution of problems and facilitate clear communication with the insured. While remote assessments provide convenience and can be a valuable tool in certain situations, they cannot replace the thoroughness of an on-site inspection. By striking a balance between the use of remote technology and the need for on-site assessments, insurance companies can ensure more accurate and reliable results, reduce the risk of fraud and ultimately increase customer satisfaction.

Ultimately, the investment in on-site inspections pays off in the form of more accurate problem identification, improved efficiency and better overall policyholder service.

Rankin is the CEO of Zap Consulting, a national firm specializing in insurance claims consulting services for the HVAC, electronics and equipment industries. Prior to founding Zap Consulting, Rankin held various roles in insurance companies and engineering firms.