The Advantage of a Three Step Insured Property Loss Claims Strategy

You just received a call on your cell that a small fire has occurred at the office building you manage and coincidentally operate out of.  You return to your office to find that while the fire was small, the subsequent fire sprinkler damage is heavy…. Now what?

Insured property loss claim events are often ill-timed and come in a variety of types and sizes.  While the occurrence is hardly predictable, the proper management of a claim process should lead to predictable results.  As with any challenging situation you encounter in business, gaining and maintaining the advantage is the key to success.  At Stirling, we use a simple three step strategy.  This strategy will prepare you with the tools to tackle the simple, and the complex insured property loss claims and create predictability throughout the claim and restoration process. 

Step OnePreparation is the foundation of advantage.
Beyond having an Emergency Plan, a Response Plan lays the foundation of aligning resources and gaining the initial advantage when unfortunate events occur.  Operating in a market exposed to hurricanes, Stirling aligns resources across the Gulf Coast each year, in anticipation of each hurricane season.

  1. Know your coverage, deductible and who to call when reporting an insured loss claim.  The insurance agents that Stirling works with are instrumental in providing education and analysis of risk and expectations that lead to a strong protection strategy and jointly understood insurance coverage.
  2. Have a flexible Response Plan for property loss events with clear personnel assignments and chains of decision making authority to enable a quick response.
  3. Properly maintain your property and address issues like roof leaks in a timely and decisive manner.  Conducting regular inspections, identifying developing repair requirements, and escrowing repair and maintenance funds all contribute to a healthy property maintenance strategy that can often better withstand and more quickly recover from property damage events.
  4. Identify and qualify regional resources that will be more readily available for large-scale weather event response.  Remember, that fire and water are your two worst enemies.  Having advance contacts with two or more fire and water response companies will be critical to getting a quick and comprehensive response.
  5. Review all of these annually.  The update should coincide with key events or time periods, such as the beginning of hurricane season or at insurance renewal.

Step TwoInitiative extends the advantage.
Once damage has occurred, the efforts from Step One will pay great dividends.  Marshaling and mobilizing resources is critical to stabilize conditions following a property loss event.  Whether Stirling is responding to the aftermath of a hurricane or reacting to a fire in a managed property, a team from the surrounding area responds.  All of the team members bring special skills and experience to bear on the situation, giving Stirling’s local Property Manager valuable resources and support for immediate and future needs.

  1. Mitigate further damage using established resources.
  2. Report the damage to your insurer.
  3. Get the assigned property adjuster involved as soon as possible as a partner in restoring your property and resuming normal business operations.  Establish a rapport, lines of communications, and align expectations for the claims process.  Adjusters, given their experience, can be extremely valuable resources through the entire process.
  4. Set a schedule, as you would with any project, setting realistic goals for the completion of the claims process and reconstruction/repairs.
  5. Engage your professionals with whom you have standing relationships to determine the scope of work, working closely
    with your adjuster to review estimates and loss income calculations.
  6. Document everything and keep the adjuster informed of your restoration progress.

Step Three:  Deliberate execution leads to the advantage of predictable results and satisfactory resolution.
Claims settlement is at times complex, frustrating, and the seemingly slow part of the entire process.  Anxious to return to normal, claimants may rush to spend whatever is necessary, not follow proper sequential steps, utilize inexperienced resources, and fail to either properly plan and/or execute a productive restoration and settlement process.  This is why it is important to have a strategy in place and to deliberately execute it.   Stirling supplements this step of the process with communication to tenants/occupants of the property, actively managing their expectations of the process and providing a degree of comfort in the knowledge that we are closely managing the restoration.

Costs:  All bids collected should contain sufficient detail to determine the reasonableness of costs. Coordinating the review with your adjuster and negotiating with your contractor(s) is a natural part of the process.

Qualified Resources:  Identifying and qualifying your regional resources in advance of a claim assures reasonable costs and a quality restoration.  In a crisis, avoid storm chasers and companies with whom you do not have experience.   If you must use new contractors, carefully check their references with other property owners and adjusters they have previously worked with.

Sequential Steps:  In dealing with claims on the broad scale of hurricane events, we at Stirling found that as in our development work, a strict sequential process led to a more predictable and satisfactory outcome of the claim process:
a)  Never release a contractor without agreement with the adjuster on cost and scope, an agreed price, and a contract.
b)  As with any construction administration, follow good practices like using retainage and lien releases.
c)  Coordinate funding with the adjuster before, during, and after the work by providing all information needed to adjust your claim and initiate the release of insurance funds.

Accelerating the process:  For relatively small claims, agreeing with the adjuster as to cost and scope of work allows you to begin the restoration process quickly.  On large, more complex claims, like the scale and breadth of Hurricane Katrina related claims experienced by Stirling, breaking the claim into smaller, more manageable parts and setting priorities can accelerate progress toward settlement.  This approach allows you to initiate and achieve portions of the repairs while working to finalize your claim as a whole.

Unanticipated work:  If during the course of restoration, unanticipated work and costs are discovered, documenting and communicating the issues to your adjuster are critical to avoid misunderstandings or a failure of acceptance under the coverage.

Finalizing:  Satisfactory resolution of your property loss claim is the culmination of your efforts that started before the incident that caused the claim.  The cumulative effect is a claim that finalizes with no surprises, as you would predict, and with the property properly repaired.

Conclusion
This three step strategy is effective for any size claim, however, for the large, complex property loss claims, it is fundamental to achieving the advantage and establishing predictability to reach a satisfactory resolution to your claim.  Over the years, we at Stirling have worked to develop and continuously improve our three step insured property loss claims strategy, to the benefit of our clients and tenants.  The people, techniques, and experience of Stirling have uniquely prepared our company to respond to and satisfactorily resolve insured property claims.

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