July 26, 2016

Five Things You Need to Know About Property Insurance: 2) Presentation of the Claim is Everything

Part two of our Five Things You Need To Know About Property Insurance series is: presentation of the claim is everything.   Property insurance policies contain numerous options for coverage.  For each of these options, or coverage grants, different financial parameters attach. When corporations are faced with a complicated property insurance claim, the easiest thing to do is to provide all of the relevant claim information to the insurance carrier, and let them decide whether any given cost is covered under the policy.  This can be a recipe for disaster.  To learn more, watch the video.

For a transcript of the video please see below

Five Things You Need to Know About Property Insurance: 2) Presentation of the Claim is Everything

Presentation of a claim is everything. It’s not always the case with insurance. Sometimes you can just give it to the insurance company and they’ll look at it and they’ll pay it. With property insurance, there’s so many things they can do to diminish the claim. You have to be really, really, really careful about where you put each dollar amount that you’re seeking recovery for.

Give some examples. When you pull out the policy, you notice that it covers a whole bunch of different things. It covers business interruption, it covers property damage, it covers contingent business interruption, it covers time element coverage’s. It covers civil authority, it covers engross egress, on and on and on and on. You look at it more and you’re like “Oh okay, it covers only this for this period of time and it covers only this for that period of time, and this one has X deductible and this one has Y deductible and they’re not the same.” When you look at it, you’re like “Okay, so the numbers don’t mesh up and we don’t know where to put them, but in addition, some of these coverage’s are overlapping. We have a choice. We can put it under sue and labor, we can put it under engross egress, we can put in under preventive measures, but we have to decide where to put it based on that policy language.”

All I’m saying is there’s a bunch of buckets. Each of those buckets has different financial parameters. Some buckets are better than others. If you give it to the insurance company, they’ll put it in the least advantageous bucket, which will give you the least amount of money. If you put it in the correct buckets, and explain, this piece is covered under contingent business interruption, but this piece is covered under engross egress, and you’ve backed it up with a proper law saying that engross egress for example doesn’t require all these other things that this other clause may, you will get more money and it will be significantly more.

My point is, put everything in the right buckets. Understand what the different coverage’s are, and make sure when you present the claim that you’re doing it in the most advantageous way. It will be a disaster if you just give all the information to the insurer and let them work out the claim for you. You will have a very low number. That number will not dovetail with the losses that you’ve internally documented for the company, and they will have reason after reason after reason to explain to you and tell you with the jargon of words that you’re likely not going to understand, or even have a reason to understand why they’re right.

Be proactive. Put it in the right place to begin with and let them go on the defense and tell you why you made a mistake, because that’s much harder to do.

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