Advisors Have Key Role to Play in Hurricane Aftermath

By Brian O'Connell InsuranceNewsNet

While Irma and Harvey are – thankfully – in the rear-view mirror, Hurricane Maria is gathering strength in the Caribbean Sea.

There are lessons for investment advisors in what is shaping up to be one of the worst hurricane seasons in history. Hurricane victims need crucial financial assistance to navigate the days and weeks ahead.

Savvy advisors reached out to non-clients and offered help, with the idea of turning a helping hand into a hand-in-hand relationship between money managers and new clients.

“I already have Hurricane Irma victims coming into our office to assist with the claims processing,” said Jason Turchin, lawyer and owner of the Law Offices of Jason Turchin in Weston, Fla.

Turchin has handled more than 5,500 insurance claims on behalf of victims of accidents and property damage. Major hurricanes can be devastating to homeowners, renters, and business owners alike.

Client or not, victims deserve some good financial advice, he said.

“To help Hurricane Irma victims in Florida, we are providing a free consultation to those with questions,” Turchin said. “We are also building a database of licensed and insured contractors and repair companies to help our clients get their properties fixed and cleaned up as quickly as possible.”

Contingency Basis

If clients need help with their insurance claim, or have any dispute with the insurance company, Turchin’s firm is handling those cases on a contingency fee. So hurricane victims don’t have to pay us any fees or costs out of pocket.

“In some cases in Florida, the insurance company may even be responsible to pay our fees,” he added.

Turchin, and other financial specialists in affected states offer up some helpful tips for advisors who might be new at the hurricane financial recovery experience. These priorities are at the top of the list:

Assess and prioritize. To get his clients back on their feet, Turchin’s team tried to quickly assess their situation and to prioritize their claims.

“Dealing with insurance companies can be very overwhelming, and we want to help make the process as quick and smooth as possible,” he said. “If the insurance company doesn’t act quickly or properly, we can take the necessary action in court to protect our clients’ rights under both the insurance policy and the law.”

Getting the evidence. After making sure client families are safe and that they have food and shelter, advisors recommend getting pictures or taking video of a client’s home for damage. The sooner the better.

“Getting evidence of how much water damage you actually had is going to be extremely important when filing a flood claim or getting financial assistance from FEMA or other government agencies,” said John Espenschied, owner of Insurance Brokers Group, which is licensed in both Florida and Texas.

After water recedes, it is more difficult for an adjuster to visualize the magnitude of the damage, Espenschied said. Regardless, advisors need to get clients to file claims as soon as possible, he added.

“There will be hundreds of thousands of claims and contractors will be booked for work shortly afterwords,” he said.” Most insurance policies will provide between 12 and 24 months for housing expenses, or a flat dollar amount from the date of claim, so getting
the process started sooner is always better.”

Vet any hurricane recovery help. Financial advisors will also urge caution before clients sign on with any contractors, flood recovery companies, or painters.

“You have to use reputable contractors,” said Jay D. Mussman, an attorney with Day Pitney/Chapin Ballerano & Cheslack, with offices in Florida. “Make sure you research your contractors and don’t sign away any rights.”

Hire an expert. Advisors who are aiding clients (and non-clients) dealing with hurricane-related financial recovery issues, and who may not be well versed in disaster recovery tactics, may want to get professional help.

“To cover the demand, insurance companies are hiring anyone (with little-to-no experience) to adjust claims with only one-day training,” said Leonard Theran, president of Professional Loss Adjusters, a loss adjustment firm with teams in both Florida and Texas. “At the same time, insurance company adjusters are being inundated with more claims than they can handle, so that low initial offers will be made because they just don’t have the time to do the job right.”

In that complex scenario, getting experienced help could be an option for advisors looking to get clients back on their feet financially.

'It Pays to Hire an Expert'

“It’s a long process and it pays to hire an expert, someone who understands the language of insurance policies and someone who has experience negotiating with insurance companies,” Theran said.

Dealing with clients inundated with hurricane-related financial loss isn’t easy. Advisors who find themselves in this situation would do well to educate themselves on disaster recovery scenarios, get clients in front of the situation, and reach out for help if and when they need it.

Brian O'Connell is a former Wall Street bond trader, and author of the best-selling books, The 401k Millionaire and CNBC's Guide to Creating Wealth. He's a regular contributor to major media business platforms, including CBS News, The Street.com, and Bloomberg. Brian may be contacted at [email protected].