I had no idea how uneventful my life was until I came home to find a tornado had passed through my apartment. I had been on the subway when it happened, then I walked up my block in auto-pilot, taking in absolutely none of the world around me. I opened my apartment door and found all my window screens lying on the ground, everything that had been on the windowsills was now scattered around on the floor and water everywhere. I was convinced that we had been robbed and was livid at the inconsiderate thieves who had felt it necessary to leave a watery mess behind. Now I had to go to the grocery store to get paper towels and other cleaning materials. It was only once I walked outside again that I noticed all the damage on my block. A tornado. In Brooklyn. Who knew?
A couple of months later, I was at work when it seemed as though the words on my computer screen shifted. First, I thought I was about to pass out then, because I work on the 28th floor where I get motion sickness on a windy day, I walked to the window to see just how windy it was. Nothing. I decided that perhaps I needed a little fresh air and walked out of my office to find others were looking confused; perhaps there was construction going on upstairs. We all decided to go outside for little fresh air. We were surprised to find crowds of people standing about on the street. it turned out that the movement had been caused by an earthquake. Since then, New York City and its environs have seen damage from two hurricanes, Irene and Sandy.
Because these natural disasters have been hitting us at home, I have been thinking and reading more about insurance issues, both at an individual and business level. A lot of individuals and businesses have been trying to sort through their various insurance coverage issues – what they can claim, where they should go to resolve their issues and whom they should be dealing with. It can get very complicated and having the right people helping them navigate it all can make a huge and positive difference to a claimant’s experience.
The first step with insurance coverage is getting a policy that provides adequate coverage. It is important to know and understand what is covered, whether one is a business or an individual. It is highly advisable for a business owner, regardless of the size of that business, to engage the services of a knowledgeable lawyer to review the insurance contract so that the business owner is aware, before anything happens, what they can or cannot claim. Individuals should also know and understand their insurance policies. It may also be a good idea to have a professional review an individual’s insurance policy, to ensure that the individual knows exactly what is in the contract.
Generally, forensic accountants are engaged in connection with business insurance claims, not individual claims. Financial forensic professionals, often certified in financial forensics, are useful in many ways, when dealing with business insurance claims. Forensic accountants who have experience with the claims process will tend to be a time saver as they will know what, where and how documents should be filed. For business interruption claims, forensic accountants will identify the financial documents required to prove losses, analyze these documents to calculate the losses, and summarize their findings in a format preferred by the policies. Experienced forensic accountants know how the insurer wants documents to be submitted – the format, order and even the segregation by claim type. This goes a long way toward a successful and timely processing of a claim. It will also be helpful to have forensic accountants who are familiar with federal, state and local laws. Depending on the extent and type of devastating event, the insured parties may be claiming federal aid – through FEMA (the Federal Emergency Management Agency) or the National Flood Insurance Program – in addition to the claims that they are filing with their insurance companies.
Though forensic accountants do not generally deal with individual claims, there are several steps individuals can take to simplify the claim process:
- As mentioned before, understand the insurance policy, including what types of natural disasters are covered by the policy. Individuals should consider whether or not they require extra coverage beyond the standard policy.
- When getting an insurance policy, make comprehensive lists of valuables. After the event, make lists of losses and, using resources such as stores and the internet, estimate the cost of replacing lost and damaged items.
- Report your claim promptly.
- Organize paperwork in a binder that is sectioned by the various types of claims.
- Keep a log of all claim activities, including dates and parties dealt with, and save copies of everything that is filed.
- Don’t sign off on any legal documents without fully understanding them first and consulting with a lawyer, if need be.
- Seek out and speak with people who either have gone or are going through the insurance claim process. Share your experiences and tips. Generally, educated and united policyholders tend to have faster and fairer settlements.
- If you decide to hire a professional to assist you with your claim, be sure to check their qualifications and references. Sadly, there are people to seek to take advantage of those who have been struck by tragedy and to exploit the vulnerable.
Dealing with a disaster that leads to property damage and business interruption is very stressful. Preparing for the possibility of these events, including getting adequate insurance, keeping good records and consulting with qualified professionals can go a long way toward making recovering from the disaster more manageable.