Property Claims Help

The most common bank insurance claim is damage to buildings or business property.

Vandals paint graffiti on the side of one of your branch offices.

A customer’s vehicle hits the overhang on your drive-up window.

An electrical circuit overheats, causing a fire at your administrative center.

A windstorm damages the roof of your main office.

Should You Turn the Claim In?

In a prior section, I discussed the use of deductibles to reduce your property insurance premiums. A high deductible means that small claims will not be insured. Your insurer will want you to report all incidents that damage your property. I recommend a more conservative approach to my clients: don’t report small property claims.

As each renewal approaches, insurers review your claims to determine that year’s premium. Many small property claims on your account will cause premiums to rise, as insurers hate claim frequency. Protect your bank by paying small claims without reporting them to the insurance company. (Always report workers’ compensation, liability, and auto claims.)

The above being said, once you decide to move forward without your insurer, you will have a very difficult time getting the insurance company involved. If you find later that the damage is more extensive than you originally thought, you could be on your own to pay it. Use caution.

Protect the Property From Further Loss

You are responsible for the protection of your property after a loss. If a windstorm damages your roof, call a contractor for temporary repairs. If a fire has destroyed a part of your building, protect the rest of the building from damage by weather or thieves. Perhaps temporary repairs are in order. Perhaps you need to hire a security firm. Move undamaged property to a safe location for storage. Save receipts for what you spend, and submit them to your insurance company for reimbursement. Do not make permanent repairs without first consulting your agent. Your insurance company may give you a hard time if it is not a part of the rebuilding process.

Contact Your Insurance Agent as Quickly as Possible

Once you decide to involve your insurer, quickly inform him or her of your loss. In smaller claims, the adjuster will contact you by phone. Larger claims will involve regular visits from the adjuster.

Document the Damage

Take pictures of the damage. Save newspaper articles. Damaged property should not be discarded before your insurance company gives you permission.

Document Your Expenses

Most bank insurance programs will include coverage for extra expenses you incur to get back into operation quickly. Advertisements of temporary locations, refitting another location to accommodate displaced employees, and increased cost of operations are all a part of your extra expense loss.

Document All Activity

Every conversation with the insurance company adjuster should be documented and confirmed. If you’re asked to get estimates and told you can remove the rubble, send an email to the adjuster (with a copy to your agent) confirming that you will be contacting contractors and will have the rubble removed.

Act as if you are the project manager and the adjuster is a key part of the team. Work together. If things move in a direction you are not comfortable with, immediately involve your agent.

Expect Complexity – a Bumpy Road

Only the smallest property claims are simple. Work through the process expecting some misunderstandings and miscommunication. Head off problems down the road by documenting, confirming, and being active in the adjustment of your claim. Property claims are construction projects with more emotion and urgency.

All Claims Adjustments are Negotiations

The insurance policy outlines the coverage provided. Rarely are property claims handled 100% as the policy intended. You may want to add a third floor to the building that will replace the damaged structure. Perhaps you will not occupy the building as a branch but will use it as an administrative office. Perhaps you will not rebuild the building at all.

Work with the adjuster through the negotiations of your insurance claim. Bring your agent into the picture. Perhaps other advisers such as consultants, contractors, and lawyers can provide helpful input.

Involve Your Agent in the Process

While most agents don’t deal directly with claims, most will step in when a problem exists. Helping you with the process is a part of their job. Use their resources.