Hoarders aren’t very common as clients, but they have to be approached with a high degree of empathy. Emotions can run quite high, and it requires a sensitive touch when handling.
“These can be very challenging claims to adjust both for the insurer and the adjuster involved,” says Alex Walker, National Director, Claims Relations, RSA Insurance. “Emotions can run high on the part of the insured client, because usually they are very protective of the items and the contents within their house.”
While it is not frequently discussed in an insurance setting, hoarding is an exposure we all need to be aware of.
Walker says that a typical hoarder won’t put in smaller claims, instead claiming only for a larger loss.
“Just because someone is a hoarder or has hoarding issues, doesn’t necessarily mean there is a claim. They may be embarrassed, not necessarily wanting someone to come into their residence,” says Walker. “But there may be a peril that has led to a loss – like a water damage event or a fire – and typically what happens in a claim like that, the contents have to be sorted through and removed.”
When a restoration firm comes in to review damage, the client is almost always there during the process, closely watching over their possessions.
“We’ve had claims in the past where we’ve gone in to do restoration work, removed contents, and the hoarder has decided that they want all their things back,” says Walker, who adds that there needs to be a very high degree of empathy from the adjuster to ensure that the client’s sensitivities are taken into consideration. “They take everything back from the restoration company, and then we have to have them sign a release or a waiver to say they’ve taken all the contents back, and they won’t be proceeding with the claim.”
One way brokers can help insurers to identify those clients who have hoarding tendencies is to be proactive, and to engage in face-to-face meetings wherever possible or feasible.
“There is no substitute for that face-to-face connection with a client and visiting them at their residence. From the outside of a residence, it is very difficult to see if a client has hoarding issues,” says Walker. “I always tell brokers, ‘don’t undervalue yourself; remember that you are a key part of your client’s financial security.’ You are just as important as their investment advisor, their financial planner, and their life insurance advisor.”
Knowing the client is crucial to proper underwriting, says Walker, acknowledging that sometimes the broker can be caught unawares that they have a client who is a hoarder – making those face-to-face meetings with the client all the more important, and having that information passed along from the broker to the insurer.
“There needs to be communication between the claims department and underwriting, to let them know that there is a risk factor with the client involved,” he says. “The underwriters need to know exactly what it is they are insuring.”
“In some cases an inspection can uncover important information about the client and the risk,” continues Walker. “In some instances for new property policies the insurance company will do an inspection of the premises; so if there is a hoarding issue, it would be discovered at that stage.”
Brokers can also avoid a lot of heartbreak for the client by going over the policy, and asking if the limit on their contents – especially cash – is adequate.
“Hoarders will occasionally have large sums of cash or coins on hand, so if there is a loss, you could have a significant portion of the claim that is not insured,” says Walker. “Usually there is a finite amount on the policy, like $500 or $1,000. But you could have a hoarder with several thousands of dollars stashed throughout the house – and that money could be a total loss in a severe water or fire claim.”
Given the state of digital photography, brokers can get a better ‘picture’ of their client’s contents and property by having the client submit photos of their most valuable possessions.
“A picture is worth a thousand words,” says Walker. “If someone has an item that they specifically want to insure, if they have a photograph of that, it is much easier to prove it existed.”
The best advice for brokers who have hoarders for clients? Know your client and have patience and empathy. Brokers may also have a challenge finding a market or underwriter willing to insure a known hoarder/risk due to the potential perils involved.
“There needs to be recognition that these are challenging claims to investigate and adjust,” says Walker. “It requires a sensitive touch in handling.”
