Risk Financing Facilities Help Insureds Avoid the Post-Disaster Problems of Slow and Delayed Claims Management

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Claims management seems like such an ephemeral concept, doesn't it?  Most insureds probably don't even give it a second thought when looking at a carrier, instead assuming it will happen quickly and efficiently.

But that's not going to be the case after a major disaster like Hurricane Florence.  While insurers "flood the zone" with adjusters, the sheer magnitude of the event can slow the process.  And that's before we get to the "3 D's of deny, delay, and defend" which insurers will argue are a myth but which insurance lawyers argue are gospel.

A recent article in the Insurance Journal contains some of the standard post-disaster complaints experienced by an insurance company regarding claims:

• “Why haven’t I heard from a claims adjuster?”
• “I haven’t heard anything from my carrier for two weeks.”
• “Where is my check?”
• “Are they going to pay? When are they going to decide?”
• “The adjuster said something about not having the right coverage, what does he mean?”
• “You mean flood wasn’t covered?”
• “Why haven’t you come by to look at the damage?”
• “My neighbor got paid for ‘X,’ why didn’t I?”
• “When is someone going to get these trees off my roof?”
• “When is the carrier going to remove these trees from my yard?”
• “When can I start rebuilding?”
• “How do I pay for my hotel bills while out of my house?” “What about additional food costs?”

Taking control of your risk by forming and running a risk financing facility (RFF) eliminates this problem, especially if you run claims in-house.  Here, we recommend that at least one person on your staff obtains an Associate in Claims designation from the Institutes.