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Insuring Collateral Damages Why Claim Payments Are Less Than Total Losses And What You Can Do About It Bruce B. Thomas

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REBEX September 21, 2010 Insuring Collateral Damages Why Claim Payments Are Less Than Total Losses And What You Can Do About It Bruce B. Thomas – PowerPoint PPT presentation

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Title: Insuring Collateral Damages Why Claim Payments Are Less Than Total Losses And What You Can Do About It Bruce B. Thomas


1
Insuring Collateral DamagesWhy Claim Payments
Are Less Than Total LossesAnd What You Can Do
About ItBruce B. Thomas
REBEX September 21, 2010
2
Insurance Is Great
3
But It Doesnt Cover The Total Loss
3
8/15/2014
4
Property Loss Survey
  • Transurance Services surveyed property claim
    experts to better understand large property
    claims
  • 461 years of claim experience resolving more than
    2,300 large property claims
  • Claims settled for more than 10 million and
    involved BI and EE
  • Included representatives from
  • Insurance companies
  • Large insurance brokers
  • Independent adjusters
  • CPAs and attorneys who specialize in helping
    companies resolve large property claims

4
8/15/2014
5
Key Findings
  • Resolving large property claims has become more
    difficult
  • More people involved, less authority, longer and
    costlier process, and many reasons for claim
    disputes, even after all the facts are known
  • Insurance covers much less of the total loss than
    previously realized
  • 15 to 30 of final claimed amounts are not paid
    by insurance
  • Final claimed amount does not include damages
    that
  • Are not known, such as increased costs and lost
    profits
  • Are known but which are obviously not covered
  • Fall within deductibles, self-insured retentions,
    and co-insurance
  • Exceed policy limits

5
8/15/2014
6
Collateral Damages Are Significant
  • Damages that occur in conjunction with insured
    losses but which are not paid for by insurance
    are a large uncovered risk for every insured
  • They are typically 30 to 50 of insurance
    recoveries
  • If an insured receives 10MM from traditional
    insurance, it will need 3 million to 5 million
    more to pay for Collateral Damages

6
8/15/2014
7
Sources of Collateral Damage
  • 15 to 30 of claimed amounts are not covered
  • Many business continuity expenses are uninsurable
    because they are difficult to define, measure, or
    prove
  • Include advertising expenditures concessions to
    vendors, distributors, and employees legal and
    consulting expenses additional administrative
    and financing cost lost revenues cost of new
    risk management programs regulatory costs
    rebuilding to a different standard, etc.
  • Deductibles, SIRs, amounts in excess of limits,
    and coinsurance

7
8/15/2014
8
Insuring Collateral Damages
  • Traditional insurance cant cover them
  • Requires definition, measurement and proof
  • Adding more descriptive words to the policy or
    fighting claims harder will not solve this
    problem
  • Transurance can insure Collateral Damages
  • Simply and efficiently

8
8/15/2014
9
Commercial Property Transurance1
  • Pays for damages that are collateral to insured
    losses but not paid for by property insurance
  • Payout is a pre-selected of the traditional
    insurance payment
  • Collateral Damages do not need to be proved
  • Insured must demonstrate that payment was made
    under the referenced insurance contract
  • Proceeds may be used as the policyholder sees fit
  • Premium is the payout times the referenced
    insurance premium

1. Patent Pending
9
8/15/2014
10

100,000
Transurance
Insurance
100
10
8/15/2014
11
Summary
  • Traditional insurance is very valuable
  • But cant cover damages that are hard to define,
    measure or prove
  • Collateral Damages are 30 to 50 of property
    insurance recoveries
  • Transurance helps pay for this short-fall
  • No hassle buying this coverage or settling claims
  • Same value as traditional insurance it references
  • Provides money to be used at the discretion of
    the insured
  • Everyone is sensitized to Collateral Damage after
    a loss
  • Why be second-guessed when you can be prepared?

11
8/15/2014
12
Cover More With Transurance
12
8/15/2014
13
TransuranceServices.com
  • Information on
  • Collateral Damages
  • Using Transurance to maximize the value of your
    insurance program
  • For property, casualty, DO, EO, captives, and
    more

13
8/15/2014
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