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Part three of our Five Things You Need To Know About Property Insurance series is: Insurance Company Accountants Need to be Questioned. Insurance company accountants are unique in the accounting industry. Far from objective reporters of the numbers, they function as highly competent advocates for insurance companies. Unlike most accountants, insurance company accountants are not bound by typical cost accounting or public accounting standards. Although they have certain typical tools they routinely use to minimize claims, they can literally make up and use any approach they want to improperly diminish claim value. To learn more watch the video.
For a transcript of the video please see below.
Five Things You Need to Know About Property Insurance: 3) Insurance Company Accountants Need To Be Questioned
Insurance company accountants need to be questioned. I said that very nicely. Insurance company accountants are a different breed of professional. They are accountants that spend one hundred percent of their time working for insurance companies. They're rewarded based on keeping the numbers down low while keeping the costs low, and coming up with ideas to minimize the claim. They're accountants, so you would think, "Well, it's all numbers. There's no fluff. There's no give and take. It's okay. I'll let those accountants figure it out."
In most situations that's a disaster. What those accountants will do is they'll look at your numbers, but they will analyze them in a way you've never seen before. I don't care if you've got fifteen years of accounting experience or a hundred, or four degrees in accounting, they will show you stuff that you've never seen before, and they will tell you with a straight face that that's the way it's done, and that that's proper. Well, the response to that is, "No, it's not. It's not necessarily proper."
All these things they've done are made up. Some of them have a basis in theory. They need to be attacked from a traditional perspective, based on what the policy says is covered, and that's not necessarily what they're doing. They'll come up with numbers that you've never heard of. They'll come up with, "Okay, we see you got six million dollars in loss, but five million of that was a saved expense." "Well, what's a saved expense?" "Oh, we're happy to tell you. That's basically something you can't recover because that was money you saved from somewhere else." "We didn't save any money, we lost six million dollars. What are you talking about?"
You can go back and forth and back and forth with them. If it gets too bad, you probably need to hire your own accountant because on the flip side of the insurance company accountants are some really bright folks that know how to deal with these folks, and they do policyholder side accounting, and we're happy to give you some recommendations there as well. The bottom line is be very careful with insurance company accountants. They're practicing something that's an art into and of itself, and it's not the kind of thing that you're going to recognize anywhere else.
Miller Friel, PLLC is a specialized insurance coverage law firm whose sole purpose is to help corporate clients maximize their insurance coverage. Our Focus of exclusively representing policyholders, combined with our extensive Experience in the area of insurance law, leads to greater efficiency, lower costs and better Results. Further discussion and analysis of insurance coverage issues impacting policyholders can be found in our Miller Friel Insurance Coverage Blog and our 7 Tips for Maximizing Coverage series.
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