It has been over three months since Sandy hit the Northeast, bringing unimaginable damage to New York and New Jersey and there are people who are still struggling to recover and rebuild their lives and homes. A lot of the challenges are related to delays in receiving insurance payments. It is already a stress to go through the trauma of a storm that destroys one’s home. The process of repairing the home and dealing with various insurance companies can become an overwhelming second job. In a situation like this it may be advisable for a property owner to seek the services of a forensic CPA to help navigate the insurance claim process.
There is a lot involved in filing an insurance claim and, in the case of events like Sandy, it is even more involved because there are different types of potential claims involved – FEMA, flood and wind, to name a few. Those filing claims will deal with their private insurance company (for their homeowner’s policy) and with the federal government (for FEMA and the National Flood Insurance Program). The probability of a smooth and successful experience is improved when the homeowner has knowledge of, or is working with someone who has knowledge of the insurance process. This is where a forensic accountant comes into play. There are a lot of parties at the table when filing an insurance claim including claims adjusters, engineering experts and construction experts and it is helpful to the homeowner to have a party overseeing the different players.
First, it is vital to understand the insurance policies and know what kind of coverage they offer. FEMA, for example, will help with minor repairs and temporary housing but FEMA is not where one should turn to rebuild a home destroyed by flooding. The National Flood Insurance Program (NFIP) is the program that provides flood insurance, through private insurance companies. Knowledgeable due diligence is necessary to make sure that the collection and submission of data to the insurance companies is done properly. After a large disaster, the insurance companies are inundated with claims and this means that a claim that is filed properly is more likely to be processed more quickly than claims containing not enough or extraneous information. A forensic accountant can help a claimant determine what the insurance company requires, what is relevant in order to file a claim and why the information is being submitted. In this way, the submission of information will be worthwhile and not just a process of checking boxes and giving the insurance companies all the information one has in the hopes that it will work.
Another thing a forensic accountant can help a property owner with is making sure that there is no crossover with claims. A claim to FEMA should not also be made to the NFIP and a claimant should be sure to use the correct entity’s forms when filing their claims. FEMA forms are to be used to file FEMA claims and NFIP paperwork should be used to file flood insurance claims. Administrative errors can create massive delays that serve only to make a stressful situation even more painful.
Having the right professional, an objective and realistic forensic CPA, helping drive the process can make a huge difference when filing an insurance claim. The forensic accountant can help the property owner make the most representative claim and not just push for the biggest number without a good basis. The claim process is a labor intensive process that involves an incredible number of documents and it is a process where the time, effort and documentation are severely underestimated. It is very easy for the property owner to get caught up in a web of paperwork, phone calls that seem to go nowhere and bureaucracy. A knowledgeable forensic accountant can minimize the frustrations and help put the property owner on top of the situation.