I’ve Got A Property Claim, Now What?

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Broadcasters tend to have favorable property claims experiences. But, with towers, antennas, and dishes being exposed to the weather and situated at remote, mountaintop sites, things can happen. Here are some suggestions for how to optimize and expedite your property insurance claim settlement.

TIMELINESS

A prompt first report of loss is very important. The scope of the damage – What else got fried by the lightning? – and the necessary corrective measures – Can we repair this or will it need to be replaced? – may not be clear early on. But don’t wait to get a full assessment to report the claim to your insurance company.

Property claims are often times complicated and lengthy, so the sooner the insurance company is involved the better. Report the claim to your insurance company immediately upon becoming aware of circumstances that might speak to a claim.

COMMUNICATIONS

Depending on your location and which insurance company provides your coverage, you will be working with either an insurance company employee adjuster or an independent adjuster engaged by the insurance company. The adjuster may or may not visit the location that sustained the damage. Regardless, prompt, effective communication is very important. The adjuster should provide you with his landline number, cell number and e-mail address. Keep your adjuster informed of developments, especially if they are large expenses or long-lead items. You cannot communicate with your adjuster too often!
And make certain that everybody on the policyholder claim management team knows what is going on. If you are sending an email with an estimate for an antenna replacement to the insurance company employee adjuster, copy everybody on your team.

TRIAGE

When property damage takes a station off-air, there is an urgency to do whatever is necessary to get the station back on-air. And, yes, moving quickly is very important! Do not stand still awaiting the blessing of the insurance company. But proceed diligently and in a fashion that puts you in strong standing for any subsequent “Monday morning quarterbacking”. Take photos of the damage, do not dispose of anything, act to prevent further damage, and do what can reasonably be done to get back on-air.

Also, as quickly as possible, secure written estimates from equipment manufacturers and contractors as to costs to get you back to pre-damage status and be sure to deliver these estimates to your adjuster. For circumstances where the cause of the damage is not readily apparent or is in question, secure written damage causation reports and damage assessments from outside broadcast engineering professionals and send such to your adjuster as soon as possible. For complicated claims, your insurance company may also engage a broadcast consulting engineer to review and assess. Sometimes, it gets down to your broadcast consulting engineer and the insurance company’s broadcast consulting engineer exchanging documents and having a discussion.

GET THE MONEY MOVING

For something like the theft of extra copper transmission line assemblies from the transmitter site, the claim can be resolved and paid easily and quickly. But for larger, more complicated claims, it can take months for the claim to be resolved, fully paid and closed. And early on in these larger, more complicated claims, you will have contractors and vendors who will have provided initial services and equipment but for which the major work and most substantive equipment will come into play over the subsequent weeks or months. To avoid cashflow issues, ask your adjuster for an advance partial payment(s) to address initial services and equipment.

HOW MUCH AM I GOING TO GET PAID?

Without getting into a discussion as to the adequacy of limits and coinsurance, (if applicable), the superior claim settlement basis is replacement cost reimbursement ― (as opposed to actual cash value). Replacement cost reimbursement covers the cost to repair or replace with new of like kind and quality, whichever is less without deduction. You can also elect to apply the claims proceeds toward the purchase of bigger, better, stronger, and faster, but the incremental cost above the purchase price of like kind and quality is at your expense. For example, if your 50 kW generator is destroyed in a fire, you can upgrade to a 100 kW generator, but that incremental cost is at your expense.

Also, you can elect to just not repair or replace at all. Perhaps you own a broadcast tower that has been vacated by the prior tenants, and the tower is subsequently brought down by high winds. You can elect to not rebuild, but your payment for that tower will then be based on the estimated current replacement cost less accumulated depreciation.

Lastly, for property that is going to be repaired or replaced, standard provisions are that the policyholder is initially paid an amount equal to the current replacement cost less accumulated depreciation with that withheld depreciation then paid once the property in question has actually been repaired or replaced. So, do not be alarmed if you have an insurance policy based on replacement cost reimbursement and you see an amount being withheld for depreciation. In practice, what typically happens though, is that when it is apparent early on that the policyholder will be repairing or replacing the damaged property, the insurance company just issues payment based on replacement cost reimbursement with no depreciation being withheld.

KEEP GOOD RECORDS

The resolution of a property claim can involve up to a dozen or more people. On the policyholder side alone, market general manager, the market chief engineer, market business manager, and corporate controller/CFO will be involved along with various vendors and contractors. There will be a strong urgency to get things done, and there will be numerous reports, bids, invoices, and correspondence exchanged, questioned and paid.

Consequently, it is really important that you keep a complete file of all communications, engineering reports, estimates, invoices and other documents, and that you maintain a ledger of all charges incurred and payments received.

PROBLEMS

Most all property claims are promptly and equitably resolved. But problems can arise. If there is a problem (e.g., the adjuster not returning calls, delays in payments issued by the insurance company for vendor invoices), call your agent for assistance. Your insurance agent cannot waive a wand over the situation and make all right. But your insurance agent can escalate your complaint and work to get the matter the attention it deserves. Also, be aware that if you are a claimant in a catastrophe situation (e.g., hurricane), the insurance companies will be inundated with claims and will, to a certain extent, give priority to the larger claims. Claims response times in such situations will, in general, be lengthier.