I guestimate that businesses operated by Koreans are second largest next to Jewish owned businesses. I attribute this trend with the traits of a successful ethnic group. Koreans are diligent, sincere and have pioneering spirit that helps them excel in their businesses, despite their conditions.
I would like to share a recent claim case that involved a restaurant fire.
Insurance company paid for the cost of interior repair, as well as equipment, furniture and fixture purchase. The compensation also included moving cost and storage rental cost. All of this was settled relatively easily.
However, much like most insurance claims, there was one issue that was difficult to settle. We ran into severe difficulty in trying to obtain proper compensation for the sales loss. The fire occurred three months ago and the restaurant owner reported his sales profit as 50% less than his actual monthly profit in his tax report.
The owner requested compensation based on his daily sales record, but the insurance company rejected the claim, sighting that the information was unreliable.
Whose claim is right? Until proven, neither side can claim that they are correct. Until the restaurant owner can prove that the tax report was inaccurate, it would be difficult to change the insurance company’s opinion.
When we determined that it would be very difficult to settle the issue, we decided to change tactic by pressuring and persuading the insurance company.
Since the restaurant did not begin the repair work and we did not know when the business was going resume normally, we decided to use the insurance clause that allows temporary relocation of the business. As such, we requested that the insurance company pay for a temporary location for the restaurant to operate. Of course, insurance claims adjuster did not know our true intent.
The restaurant owner got an estimate to operate a temporary restaurant in a parking lot, renting a trailer with a kitchen. He and found that it would cost approximately $10,000 to do initial installation, obtain city permit and electrical works. Monthly rental cost of the trailer was $7,000. It would cost additional $5,000 if he rented a dining car for his customers to dine properly. When we submitted the estimate, the insurance company sent a check for $17,000 to cover the cost of initial set up and first month’s rent for the kitchen trailer. We claimed that we needed more money because it would cost $12,000 just to cover the rent because we also needed to rent the dining car, not just the kitchen.
This triggered an alarm for the insurance company. Insurance manager must have worried that this would cost a lot more money. He questioned whether operating a temporary restaurant in a parking lot was the wise decision.
I anticipated this response from the insurance company. Insurance company realized that profit loss was actually less than $10,000, but operating a temporary restaurant would cost $10,000 for installation and another $12,000 for monthly rent, which was simply too much.
I then told the insurance manager that we were willing to forego operating a temporary restaurant if the insurance company was willing to pay for the actual monthly net profit.
The insurance manager immediately agreed to pay that amount, not the amount reported in the tax return. The restaurant owner was able to receive the compensation equivalent to his normal net profit.
For this case, because persuasion did not work, pressure was needed to get the desired result.
The insurance companies wanted to reduce the compensation amount by using tax returns or other evidential documents. We worked to help the restaurant owner receive his usual net profit as compensation. There was a difference in negotiation approach.
The restaurant owner is now receiving a check for the profit loss every month, even though he is not working.
Jung Park, PA
Excel Public Adjusters