Now that Hurricane Irene is done pummeling the Eastern Seaboard, affected business owners will move on to the next phase: trying to figure out if insurance will cover their losses.
In the chaos that follows a natural disaster, mistakes can be made that may delay insurance reimbursement, or mean your insurance won't pay at all. Long delays can be deadly for a business trying to bounce back and get the doors open again.
Here are the top seven mistakes business owners make in filing insurance claims:
1. Not contacting your insurer immediately. Many people make the mistake of cleaning up damage before an insurance representative visits the business. This creates confusion about how bad things really were, and you may find that labor you did or paid for is disallowed if it preceded an insurer's inspection. In a disaster situation, many insurers have a quick-response team that will come out to survey the situation.
2. Not documenting the damage. Often, repairs must begin immediately to prevent additional damage, or equipment must be moved to a new location. If so, be sure to photograph the original scene to document how it was before you started your cleanup effort. Also take photos of any repairs you make.
3. Not keeping damaged goods. If your business cleanup includes removal of items such as water-damaged merchandise, flooring or insulation, keep it all, even if it has to pile up in the parking lot. The damaged materials are all evidence of the impact of the disaster on your business.
4. Not appealing your insurer's lowball estimate. Your insurer will give you a damage estimate after surveying your business. If you think it's too low, you can appeal. Hire your own adjuster to do a second estimate. Usually, an impartial, third-party mediator will then be employed to make a final decision on the payment amount.
5. Not reading your policy. It's a common myth that if you have insurance for a building, you must have coverage for flooding, earthquakes and all other possible calamities. But often, it's not true. In earthquake-prone states, for instance, this coverage often must be obtained on a separate policy or rider, and flood insurance is only offered through the National Flood Insurance Program. Don't waste time submitting claims to your private insurance policy if it won't cover you for the disaster you've just suffered.
6. Counting on FEMA for quick help. If your business is in a federally declared disaster area, federal aid will be available. But you can ask survivors of Hurricane Katrina how maddeningly slow this aid moves. It might provide homeowners with temporary shelter and eventual money to rebuild. But for a business owner, your private insurance will be your best chance at receiving money fast enough to reopen before all your customers drift away.
7. Not preparing ahead of time. Obviously, the aftermath of a disaster goes more smoothly if you are ready to swing into action when trouble hits. Start with reviewing your policy to make sure you have adequate coverage. Then be prepared. Do you know where your insurance policy is kept? Is it handy, where you could grab it if you had to leave suddenly? Is an extra copy in a safe deposit box where it would be safe from flooding or fire? Do you have your insurance agent's number programmed into your phone? It'll prevent delays if you have your information handy.
Is your business insured against natural disasters? Leave a comment and tell us your plan.
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Comments:
This post give a good focusing to know about the common Mistakes for making a insurance claim. We are saw many people which is affected this problem. It's give a batter solution to ignore this mistake.
I like to visit this nice post. This post give a little discussing for the business insurance matter. Now we are getting about a various kind of policy which is helpful to protect our business, Health and Etc. I got a well instruction to get a business insurance.
Great advice. Keeping damaged goods can also provide you and the insurance company with some value in the salvage if sold - lowering your rates in the long run
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When planning ahead that includes knowing what you can handle before hand. For my business we keep track of all insurance paperwork (For HIPPA, IIABA etc.) this allowed for easier filing for personal insurance as well. I've left the URL to a great website that helped us keep track and create statements from data in our excel spreadsheets. Hope this helps! Tawnya http://oneclickstatements.com/insurance-employee-management.html
A tornado knocked out a transformer and all electricity in 3 counties. All of my frozen food thawed and ruined. CNA insurance refused to cover the loss because the act that caused the loss of power happened off the premises of the building. I also had business interruption insurance. They only paid until the electricity came back on even though I did not have frozen food to sell which cut my business almost in half. Moral to this story: Fire CNA...if you have them as your provider, run to a different po
If you know you will be filing a claim then inform your insurance company as soon as possible. It will be very useful to you if you inform them immediately.
Your statement # 1 for: "Many people make the mistake of cleaning up damage before an insurance representative visits the business. This creates confusion about how bad things really were, and you may find that labor you did or paid for is disallowed if it preceded an insurer's inspection." is 100% false. Most insurance policies require an Insured to mitigate damages in the Conditions section. If you let the damages sit instead of mitigating when you could, they can become more costly. These costs can be excluded. Your statement # 4 states: "Hire your own adjuster to do a second estimate." What you did not state is that often when you hire a 'public adjuster' is that this adjuster requires a 7%-12% (depending on what the state department of insurance allows) fee from the loss settlement. Do you want to give away 10% of your settlement check? I agree with the remainder of your article. The long and the short of it is: read your policy, know what you are and are not covered for, and be prepared.
First you have to find the best insurance company, then you have to find who will claim the full payments to you...
Great list Carol, all very good advice. Additional to below: Dust off that disaster plan, and if you don't have one, take time now that everything is fresh. We are an insurance agency and have been on our generator since Sunday, and fortunately haven't missed a beat for our customers. Without a plan that includes responsibility tiers among our staff, generator, ready-cut plywood for two picture windows, a solid list of local service providers, contact infor for all staff, companies, and service providers, ...you get the picture. IT WORKED. Free templates available at agordon.com. Taking the time to focus on this pays huge dividends
Great additional point...coverages and plans need to be regularly reviewed. Your business hopefully keeps growing, so old coverage may not be adequate any more.
Plan, plan, plan. Have all of your plan's (weather, safety, fire, utility etc.) all written down and kept up to date. And make sure that you have your agent, who actually writes the policy, come by the business to be sure that you're keeping in compliance with the policy's term's and your compliance with them. That means all of the inspection's, from the Fire Dept, whatever OSHA Agency is responsible for workers safety and your utility provider's, need to be located in one place so you can get to them when you need them, not scattered thru your files by seperate category. It took me 2 weeks to write all of my policy's and inspection guideline's (and inspection checklist's), taken right off the OSHA website, into a coherent policy and compliance manual. But now I'm done and can be pretty wellassured that I am gonna be more than covered and in compliance when I get the insurance agent out here to do a walk-thru for the initial rate setting.
Some helpful hints here. But the most important were glossed over in the closing sentnces .... if you have not met with your agent at least once a year to throughly review your coverages (your agent also has copies of your policy). Reviewed your disaster plan as well............there is no question things will not go as you expect when disaster hits. You only have yourself to blame then........
Reading your policy is something you should do before disaster strikes.
Thanks for these reminders Carol, businesses should definitely review their insurance policy and if they have the appropriate coverage for various incidents and disasters both man-made and 'acts of God'. To add, having digital copies of policies and other important docs is a must.