It’s the call every property manager hates to receive: the first notification of what will turn into an insurance loss for the client. Sometimes it comes late at night or in the wee hours of the morning. Depending on the severity of the loss, it signals the beginning of what could be months of work above and beyond the normal scope of the job.
In the immediate aftermath of an insurance loss, property management firms are challenged to maintain their normal workload while overseeing additional tasks related to the loss. Hiring a public adjuster will ease the burden, but some tasks will remain in the purview of the management company. Hiring and supervising contractors, tracking down unit owners to work on remediation and repairs, meeting with the association for updates, and the time-consuming job of documentation is only a partial list of additional responsibilities adding up to supplementary management company expenses.
The client’s insurance company could compensate these expenses if proper steps are taken before a loss occurs. Here are five points to consider—with no guarantees—but this will at least give the property manager the best chance to recoup fees.
How to maximize your chances of compensation when your client has a loss:
- Put a fee agreement in the contract with the client/association, with specific language relating to insurance claims. In this agreement, compensation should be based on an hourly fee that is based on work outside of the normal duties.
- Be very specific about the nature of the work, such as “maintenance costs to prevent further damage” or “project management costs to oversee the remediation and repair.”
- It is very important to specify hourly rates in the contract, as that will determine compensation by the insurance company. If the contract specifies compensation as a percentage of the insurance claim, the insurance company will decline the payment, as percentage fees are only paid to public adjusters or attorneys.
- When performing any and all tasks related to a claim, it is imperative to keep good records. We recommend keeping an hourly log of time spent on the loss. Documentation is key to receiving compensation.
- Have the agreement prepared by an attorney who is knowledgeable about the insurance claim process. The more detailed the contract, the greater the likelihood of compensation to the management company for extra expenses incurred as a result of the loss.
Not sure what to do immediately following a loss? Click on this link for a detailed checklist: http://www.proflossadjuster.com/suffered-a-loss