Once disaster strikes, the first priorities are always safety and preservation of property, but there are priorities to consider ahead of a loss to avoid unexpected surprises. Disaster mitigation and restoration is a critical service after property damage, and how you manage it may impact the outcome of your claim. Though there are many capable firms that specialize in property damage clean-up and restoration, there are some that will make mistakes and others may even take advantage of the situation. When it comes to recovering the cost of mitigation and restoration services for an insurance claim, any mishaps can create big problems that may leave you stuck with the bill.
Here are some techniques to prevent potential problems before they arise:
- Vet your emergency response team prior to loss - Preparation is the key in any endeavor but with property damage claims, you cannot be too prepared. Recovery service providers should be identified and interviewed. Make sure the company you choose will be able to handle your potential issues. Involve your insurer during vetting. There are “approved” vendors that insurance companies recommend; however, just because they are “approved” does not mean there will not problems. Notify the insurance company of who you plan to use as well.
- Clarify and document scope of work - Be clear on scope of work with the recovery firm and make the adjuster part of that conversation. Often, emergency response does not follow the normal protocols of a typical project. There likely won’t be time for detailed estimates, so try to get the adjuster to approve work in real-time to avoid second guessing.
- Take a hands-on approach - Your property may still be underwater, but once access is granted, you must be hands-on. No one should have access to your facility without the presence of a company representative. Assign a property supervisor to the affected site to keep track of who is there and what they are doing. It’s your property and your responsibility. The bigger the loss, the more people coming in and going out, so it is vital to have a company representative onsite to observe and answer questions.
- Audit contractor charges before approving - The first weeks after a loss is chaotic. It’s important for policyholders to put controls in place to monitor activity and to verify work has been completed to specifications and according to the terms of the agreement. Reimbursable insurance expenses should be separated and audited prior to payment for proper detail and accuracy. This needs to be done efficiently in real-time. If you don’t have the resources, this step can be completed by your claim preparation accountants i.e. forensic accountants. Having forensic accountants on your team, along with your technical experts, can process this information in the context of insurance recovery. Don’t assume your forensic accountants will automatically audit invoices. Identifying errors or worse, fraud, is critical to avoid delays in payment or project completion. If you hire RWH Myers, we will discuss the proper protocol and work with you to establish the internal controls to intercept errors.
- Address issues immediately - When the first invoice arrives, insurance companies may act surprised and even deny coverage, especially if the steps above have not been followed. Make sure to get the parties together to discuss the issues. Don’t procrastinate and don’t assume. It is important to be proactive with any potential discrepancies. The policyholder is responsible if there are unresolved differences. If the adjuster disagrees with the work performed and the invoices are paid, it may be difficult to recover everything your expenses.
The immediate aftermath of a disaster is stressful and hectic. Preparation and communication can help you weather the storm and minimize unwanted surprises when you’re looking for claim payment. Having an experienced and independent forensic accounting team will reduce the stress, the workload and reimbursement issues. Per the tagline for one of the largest restoration firms, in the end you want it to be “Like it never even happened.”