January 11, 2017
Under Deductible? You Need a Review
by Bill Warren
Losses that appear to be under deductible always benefit from an independent review, for three reasons.
Losses that appear to be under deductible always benefit from an independent review. Deductibles for CAT losses have become more complex over the years, and interdependent operations spread the impact across the organization, so it’s increasingly challenging to have confidence in the preliminary evaluation, especially when informing key stakeholders.
Those who have had losses know, with hindsight, that there are gaps in understanding and initial questions that are critical to the deductible evaluation. Avail yourself of a candid, independent review from the start so that whether you have a recoverable claim or not, you’ll be prepared.
Many policyholders engage forensic accountants when they are confident the loss exceeds the deductible, but few think to involve help when unsure. Experienced, professional help can highlight the key factors in this evaluation and will provide a result you can rely on to make better decisions and reduce potential wasted effort.
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Here are three reasons to make this step a standard risk management protocol for your company:
Deductibles Require Measurement
“Under or over deductible” is the first question once you turn your attention to the financial response. Deductible policy language has evolved over the years as insurers respond to claim nuances and program needs. The professionals at RWH Myers have assisted clients with quantifying deductibles and preparing claims throughout these changing times. We understand the language’s quirks and can quickly scope out the magnitude of applicable deductibles.
Insurance Accounting is Unique
Loss accounting is a different discipline than financial or managerial accounting. Misunderstandings waste time and create unwanted transactional friction. Breed process efficiency with the right questions and meaningful answers from a team with experience translating managerial accounting into insurance loss accounting for policyholders.
Are operations overly optimistic? Is finance overly pessimistic? Might reporting a claim impact contingent commissions? Independent expertise will navigate through any biases to pull it all together in a way that answers the important questions based on their merits, ultimately facilitating the financial recovery process.
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No one can anticipate a loss, and policyholders actively work to avoid them, but that doesn’t mean you don’t need to plan for when you have a claim. A candid, independent review will give you the confidence of an appropriate deductible threshold evaluation and will segue into a smooth and fair claim process.