This is the second installment of some experiences we encountered after the total loss of our dealership.
Public insurance adjusters – I never heard of them, until our disaster occurred. It’s more than likely few others have as well. If one has a major loss, one will be made aware of PIA’s. The phones will ring off the wall and vibrate out of the holders. PIA’s are those individuals or companies who step in on your behalf and, for a fee, become your advocate for the settlement of a claim. The insurance companies either have their own “adjusters,” which means your payment is “adjusted” from what you think you will get down to what they actually put in the form of a check. I do not mean to imply any less than honest dealings. The insurance companies are a “for profit” entity and the best way to profitability is to take in the max amount one can and pay out the least.
The adjuster sometimes is employed by the company and sometimes operates as an independent. Either way, most are honest, or they will not be “adjusters” long. They are arbitrators in their job and try to please both the insurance agency and the customer (a big smile should have come on your face as a reader just now). Most adjusters get a flat fee contrary to the myth that they get paid in proportion to the money they save the company.
Now enter the public insurance adjusters. They are also adjusters, and their job is to fight for you and deal with the details of filing claims with your insurance provider. If one has a major loss involving a multifaceted claim that involves segments such as garage keepers, building, tools, machinery and other areas that have to have documented inputs to receive settlement, the paperwork can be overwhelming. Let me take that back — it will be overwhelming. Each damaged item will have to have pictures, serial numbers, values, work orders against it, customer info and salvage value in some cases.
Inventory records in detail — what was paid for and what was due on the next parts statement — follows. Lists of equipment, when purchased, and the same ole same ole. As stated about business interruption insurance (again, you need it) the business will have to have records dating back 3 years on a monthly basis showing cash flow. I could go one for 4 other hours and areas but will avoid redundance.
These PIAs will assist in all these areas and know tricks a dealer will never think of. In most cases we have researched the additional moneys received will almost offset the fees. Speaking of fees, the normal we have found is between 5% and 12% of the payout from the insurance carrier. One of the reasons PIA's produce more revenue is they read the fine print of the contracts (Tell me you have read all the fine print in your insurance coverage and understand it all). On the flip side, if you max out all the limits of your policy and do not have the business interruption clause, you probably do not need the services of a PIA.
On a personal note, we used a PIA for the BI portion with a 10% fee. This was cheaper than hiring an accounting firm to assist our journey to a rebuild. Plus, it allows the bookkeeping department to carry on with the daily details of the money side of the business. It has proved to be a good decision.
So now you know what I know about dealing with insurance companies, which is enough to be dangerous. Oh, I forgot to buy stock in and purchase the products Pepto-Bismol, Tums, Rolaids and whatever the doctor prescribes for a large dose of patience. Until part 3, wishing you miles of smiles and profits in the meantime.
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Told from the perspective of an in-the-trenches owner/operator — Tim Brannon of B&G Equipment, Paris, Tenn. — Equipment Dealer Tips, Tales & Takeaways shares knowledge, experiences and tips/lessons with fellow rural equipment dealerships throughout North America. Covering all aspects required of an equipment dealership general manager, Brannon will inform, entertain and provide a teachable moment for current — and future — leaders within equipment dealerships. |
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More From Tim Brannon
- Fast and Fiery-ous
- Our Industry’s Connection to China: An Optimistic Point of View
- Idiocracy: Our Industry’s Dependence on China
- Battling Through the Next Market Cycle
- Are 'UFOs' Circling Your Dealership?
Editor's note: Among the long list of destroyed property in the fire was was Brannon’s diploma from Murray State University, which had been proudly hanging on the wall of his office. His alma mater heard about the tragedy, and on Tuesday, a delegation from university paid a visit to Brannon and his family at the site of the burned-out business to help undo just a little bit of the fire’s damage.
Click here to read the full story from The Paris Post-Intelligence.
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