Loss Measurement



...an event is not only frustrating, but may not fulfill requirements of the insurers or FEMA. With this in mind, we will discuss each portion of the recovery and the proper techniques for estimating and/or documenting the loss.

We will focus on major loss elements including those that are not considered directly eligible for FEMA funding since they are insured. We will also discuss the calculations that will be made to allocate insurance proceeds, to ensure that reductions are only made on that insurance that corresponds to FEMA eligible losses.

Emergency Costs

Emergency Costs are the first to be incurred and generally are the first to be reimbursed. Activities ranging from damage prevention to emergency cleanup are handled quickly and generally without regard to record-keeping.

When possible, an organization can prepare for these costs during the emergency planning phase by pre-selecting contractors to perform specific activities such as clean-up and debris removal. This approach serves multiple purposes by allowing the costs to be captured and invoiced by the contractor, freeing staff to focus on day-to-day operations and allowing an applicant sufficient time to procure such services in accordance with FEMA policy found in Part 13 of CFR 44. While FEMA is generally more flexible during the emergency period, the applicants’ costs are often challenged as a result of inappropriate contracting methods and/or costs that appear unreasonable.

Regardless of who performs these activities, it is imperative to begin keeping accurate records. If a contractor is being used, they should be monitored to ensure they are performing within contract parameters. If staff is being used they need to consistently document what they are doing, where they are doing it and for how long. While these measures may appear onerous, they are necessary for a successful financial recovery.

Along with accurate records, applicants need to begin making a photo-diary of the ongoing response. Whether video or stills, this method of record-keeping...