Overview
When a funeral home in a rural county in the Northeast United States burned to the ground just after Christmas, the owner reached out to Rollins Accounting to help their business and the community recover. The owner had two additional locations, but these locations were too far from the loss location to send grieving families. Being a small county, residents did not have many options for funeral services other than our client in their times of need.
Our experienced team provides unmatched forensic accounting and inventory expertise and insight in the insurance claims process to help policyholders fully recover under the terms of their insurance policy from unexpected losses.
Issues
- The community in which funeral home was located is rural and had limited options for funeral needs
- The funeral home needed to resume business as soon as possible
- A temporary location was found, but needed a significant amount of work to be used for services
- Determining the revenues the business would have earned absent the loss was difficult to substantiate (i.e.: trying to predict the mortality in the county and what level of amenities each service would require)
- Rollins initially reviewed the number of services and average revenue per service for the two years leading up to the loss at all of the owner’s locations: however, in reviewing the historical details, there were increases at other locations while the loss location had experienced a decline
Solutions Applied
- Rollins helped the insured and public adjuster present estimates and quotes for the build-out of the temporary facility to the insurance carrier to receive advance funding on the remodel
- As actual invoices came in for the work, those incurred invoices were submitted to the carrier to keep money for the work flowing
- Within a couple of months, the business had a temporary facility with which to service their community
- Through productive discussions with insurance carrier’s accountant, an agreement was reached to project that the business would have generated the average monthly revenues inclusive of the significantly increased revenues experienced at the temporary location during the loss period, resulting in a fair revenue projection for the client
Outcome
Through discussions with insurance carrier’s accountant, we were able to project that the business would have generated the average monthly revenues from the two prior years instead of just one. With the declines in the one year prior, this increased his revenue projection and helped offset the additional money being generated following the loss on a per-service basis.
Despite the arrangement with the church and the use of a temporary facility, the business still lost close to half of the services and revenue they likely would have generated had the loss not happened. Through amicable negotiations with the insurance carrier’s accountant, Rollins Accounting was able to help the business recover those losses through their business income and extra expense insurance coverage.
Highlights
- Projecting mortality is difficult and various methods can be applied.
- An agreement was reached with the insurance carrier’s accountant to use the revenue projection most favorable to client.
- Rollins Accounting was able to help client recover their losses through their business income and extra expense insurance coverage.