A little water can cause a lot of damage. To mitigate water loss claims, a fast response is critical. Unfortunately, traditional first notice of loss (FNOL) processes can lead to wasted time, and that leads to higher costs and poorer customer experiences. A digital FNOL that also triages time sensitive claims can reduce the time, damage, and costs associated with water loss claims.
According to the Insurance Information Institute, water damage and freezing claims are a leading cause of homeowners insurance losses. Each year, approximately one in 60 insured homes experiences a loss caused by water damage or freezing. Between 2016 and 2020, water damage and freezing claims accounted for 18.3% to 28.7% of all losses.
A pipe bursts. Water pours into the room. It’s a bad situation, and it will only get worse with time.
Even relatively small amounts of water can cause significant damage over time. Hardwood floors can warp. Drywall can become soft. Carpets and furniture can rot. Mold and mildew can flourish.
Mold can be especially problematic due to the potential for both property damage and health issues. According to the U.S. Environmental Protection Agency, if mold contaminates the HVAC system, turning it on can spread mold throughout the building. This is bad because mold remediation can be expensive, and the larger the affected area, the more expensive it is.
Bob Vila says the national average cost for mold remediation is $2,254, but if the whole house requires mold remediation, it can cost $10,000 to $30,000. Mold on drywall can also be pricey, with average costs of up to $20,000 if the drywall and everything behind it has to be removed.
To keep costs down, you need to address water damage before materials have time to rot and before mold has time to grow and spread. That requires a streamlined FNOL process.
Insurers know that claims need to be resolved as fast as possible. When the claims process drags, costs tend to go up. At the same time, policyholder satisfaction tends to go down. In fact, the J.D. Power 2022 U.S. Auto Claims Satisfaction Study found that the average repair cycle time increased by about five days, and claimant satisfaction dropped by seven points.
A strong FNOL process can get the claim off to a good start and support a fast resolution, but common problems can lead to delays.
Each delay on its own may seem trivial, but it all adds up. And when it comes to water damage, each hour that’s wasted can lead to higher costs.
Most claims processes start with the first notice of loss, but traditionally, the claims handler reviews the FNOL before repair services are deployed. This can create a long delay between the initial report and the deployment of services – giving water damage time to become worse.
Speed is especially important when it comes to water loss claims, but a faster claims process is always beneficial. Liberate’s AI-powered digital FNOL process can be tailored to automate a wide range of smart triage workflows. The result is a better customer experience and a reduced loss ratio. Learn more.
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