Experiences from Puerto Rico: Claims still being adjusted
It has been almost exactly one year since Hurricane Maria swept across Puerto Rico, devastating large parts of the country and causing overall economic losses of around US$ 65bn. And the reconstruction works are still ongoing. Gerhard Loos, Key Case Claims Manager, was there at the end of April 2018 to get an up-to-date picture of the situation. He also spoke to affected clients, including Carlos Rubio, State Historic Preservation Officer of Puerto Rico, based in the capital San Juan. Two perspectives on one loss event.
Gerhard Loos: “Efficient adjustment of claims was virtually impossible.”
When I arrived in the capital, San Juan, on 16 April, it was still impossible not to see the damage caused. Destruction of the electricity network, which is almost exclusively dependent on overhead transmission lines, had delayed the reconstruction of buildings and infrastructure. Whilst around 90 percent of the power grid was again operational in April, in December – some three months after the devastating hurricane – only little more than half of customers had had their power supply restored.
This not only made reconstruction more difficult, but also posed a problem for the adjustment of claims because the long delay in carrying out repairs resulted in additional consequential damage, for example due to water penetration and moisture. On top of that, there was a lack of awareness about the services that the so-called “restoration companies” could provide to limit losses, by recovering and cleaning the equipment that had been affected by water or humidity. One of these companies arrived in the country shortly after the hurricane with their equipment for water damage restoration, only to have their generators confiscated at the airport for other purposes.
No exceptional periods for settlement allowed by the authorities
Furthermore, the permitted period for claims settlements was not adapted to the exceptional circumstances following Maria, as would have been expected when a regular year’s worth of claims is produced by one single catastrophic event. Settling and paying the huge volume of claims within 90 days proved to be unrealistic for the insurance companies. To escape fines, they have been closing some claims before the deadline and reopening them afterwards. By the end of January 2018, some 230,000 claims had been filed, which might not correspond to the actual number of losses.
Experiences from Munich Re’s workshop helped after Hurricane Maria
Carlos Rubio: “People are now more concerned about each other.”
The country’s communication network in particular was in a desperate state following the direct hit. There was no television anywhere in Puerto Rico, and only one radio station was working. People outside the country were better informed than we were, and every day worried family members were calling from overseas. This state of affairs persisted for weeks, during which a large part of the population was practically unaware of what had happened in the country. Many did not know how their relatives had fared. And then there was the constant fear that lay over the country after Maria. If there was a power cut, long queues formed immediately at food shops and gas stations. That was still the case in April, more than six months after the hurricane.
People are helping each other out
After the hurricanes, another government agency gave us the opportunity to move to another building with power and air conditioning, but we decided not to move because we needed our archives. We adapted to the circumstances, writing letters by hand for example. Now, everything is working again. We were lucky in that the building remained largely intact. We are making good progress with settling our claims.
Almost a year after Maria
The people, on the other hand, have learned from the experience. Neighbors are working together to find ways of resiliency for their communities. In some cases, particularly in remote mountainous areas, some have managed to provide renewable energy infrastructure to buildings that are currently being used as a community centres, where they have refrigerators and other facilities for communal use. On a personal level, people have been taking measures and precautions in advance of the hurricane season.
Maria was certainly a wake-up call. Even if you can never know exactly when and where a hurricane will strike, we hope we will be better prepared for the next time.