Rapid Action on Insurance Claims Can Help You Recover Following Hurricane Matthew
For the first time in over a decade, a major hurricane is putting preparedness plans to the test in Florida, Georgia, and the Carolinas. After pummeling parts of Haiti, Cuba, and the Bahamas, Hurricane Matthew’s track is taking it up the US southeastern seaboard.
The storm, which has reached Category 4 hurricane strength, is currently expected to turn eastward over open ocean over the weekend. As it hugs the coast, the storm’s track is difficult to predict; even a slight change in direction could bring landfall. And forecasters say there is a possibility the storm could loop back, hitting some areas a second time, though likely as a much less powerful storm.
Safety is, of course, priority number one. But for businesses that suffer damage, properly documenting losses for insurance claims will be a critical factor in recovery. Considerations include:
- Act as quickly as possible — keeping safety in mind — to document property damage. For example, take photos or video of standing water, and record progress as it recedes. This will enable you to clearly capture the damage that is left in the water’s wake.
- Prepare a written evaluation of your losses. Among other things, this should include:
- Fixed asset register and depreciation records.
- The most recent physical inventory.
- Payroll records for employees used in cleanup and recovery, including the specific hours worked, tasks performed, and pay and overtime rates. A unique accounting code should be used to capture all costs associated with recovery efforts.
- Purchase orders or estimates of all contracts for repair or replacement of damaged assets.
- Profit and loss statements for the two years prior to the event for all affected locations.
- Budgets and forecasts prepared before the loss to depict anticipated loss results.
- Document information that may have been given verbally. For example, conversations held with customers or suppliers may be material to claim measurement. As time passes, people’s memories fade and key people may change jobs. Information and recollection of events should be gathered and recorded as soon as possible.
- In the event of a service interruption, document the reason, and, if possible, which utility providers’ equipment (substation, transmission, and distribution lines) was impacted and the distance from your property.
- Identify potential issues early and address them with the entire claims team. This may include required code upgrades, changes to be made to the pre-loss structure, or other improvements.
- Adapt accounting to capture losses. Forensic accountants and others in the claims process recommend creating a new general ledger account to capture all expenditures incurred as a result of the loss.
Recovering from a disaster can be difficult. Be sure to contact your risk and insurance advisors as you document the claims that can help speed your business’ recovery.