Documenting Complex Claims After a Natural Disaster

Frank Russo
Principal, Procor Solutions + Consulting, LLC
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Global natural disasters continue to rise year over year, with 2020 totaling $210 billion of losses.

As the frequency of these events rises, it is critical to have a sound plan for managing through the cost recovery phase of a significant impact on your organization. Public entity insurance/risk managers have the unique challenge of clearly documenting, segregating then correctly assigning the claim costs to potential areas of recovery existing in both insurance and FEMA for the same event.

An essential item to remember in any complex claim submission is to be proactive from the start. Keep in mind, it is the organizations’ responsibility to present the claim and the receiving party’s responsibility to review and adjust it.

Also, even though FEMA may be “the payee of last resort” following the conclusion of an insurance claim submission, it is critical to start with a holistic claim submission that includes all of your insurance policy “buckets” or assumed areas of collectability as well as potential eligible FEMA categories that may apply.

Three additional items for consideration include:

1. Prepare a Rough Order of Magnitude of your loss within the first two weeks:

To have the full view of the potential loss put into context, be sure to prepare a summary identifying all areas of your loss with associated estimated or expected costs. For example, if there is building damage, obtain contractor estimates for repair to demonstrate the ultimate costs as you choose the vendor to commence. Or, if claim items are too early to quantify, such as business interruption, include the item as “to be determined” or “TBD.” This will help the adjuster and examiner consider the worst-case scenario, including potential future claim items as they set the insurance reserve.

2. Be sure to tell the claim story in narrative form:

Another critical component of the claim submission, aside from detailed costs submissions, is the inclusion of a narrative or summary explaining the timeline and reasons for each decision made and where/how they are connected to an area of coverage in the insurance policy and/or FEMA grant.  Often an organization misses the need to put a “story behind the numbers” in a claim submission, leading to confusion on what occurred.  Keep in mind a complicated insurance claim can take between 6-18 months to settle, so a detailed narrative recounting all pertinent facts is crucial to memorialize actions and context when the time approaches for a settlement.

3. Remember how cash-flow is key to fund your recovery:

Lastly, an effective claim presentation with proper insurance coverage can become a tool for cash-flow during a loss. Remember that the insurance claim doesn’t have to be paid only at the end of the process. The adjuster can release funds as items are agreed to and supported. As the organization proves damages through the adjustment process, ask for partial payments, always work to minimize the “undisputed amounts,”: and then ask for the money. This will help the organization maintain cash flow during the recovery process and ultimately speed up the phase for FEMA to reimburse eligible remaining cost items not paid through your insurance policy.

*The views and opinions expressed in the Public Risk Management Association (PRIMA) blogs are those of each respective author. The views and opinions do not necessarily reflect the official policy or position of PRIMA.*

By: Frank Russo
Principal, Procor Solutions + Consulting, LLC

Summary of Qualifications

Frank is a founder of Procor Solutions + Consulting, a leading specialty consulting firm offering expertise in the areas of insurance risk management, disaster planning, claim preparation, construction claims, insurance appraisals and dispute resolutions.

Frank is a recognized global thought leader on the topic of business resiliency having spoken and written many times throughout his career about business risk preparation and recovery strategies from major income-impacting disasters, losses or disputes.

Business Experience

Over his career, Frank has helped collect over $10 billion dollars in loss recovery for his clients. He has actively guided clients through all the major large-scale disasters over the last twenty years including the terrorist acts of 9/11/01, 2017 Hurricane Season, Hurricane Katrina, the Gulf Oil Disaster and the Japan Earthquake/Tsunami to name a few. He also is involved in major construction and development projects when there is a need to professionally quantify, support and present incremental costs and schedule delays.

Professional Affiliations

Construction Risk Insurance Specialist (CRIS) designation from the International Risk Management Institute; an Associate in Risk Management designation from the Insurance Institute of America; and is a verified Cyber Insurance Risk Manager (CyRM).

Frank was recently honored as a recipient of the “Innovator in Finance” Award from FiNext acknowledging the efforts of FinTech thought leaders and torchbearers of the industry.


Frank is an alumnus of Rutgers University and holds an Executive MBA from the Lubin School of Business at Pace University.

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