Common Problems With Claims
I thought I might take a moment to provide my input
regarding a posting by Kevin Quinley regarding
common gripes about claims service. The reason
is that common complaints often translate into bad
faith claims, and that is where my involvement often
comes in as the expert witness.
10 Rules to Live By
1. Thoroughly investigate: I often do not see where
the claim is fully investigated, by this I mean there
is all to often a lack of investigation in all the
possible basis that might support the insured's
claim. On the flip side there is a lack of
investigation into the possible basis that might
support a defense for the insured and/or a
basis to pay a third party claim.
2. Objectively evaluate: There is a tendency to not
objectively evaluate claims of the insured as well as
third party. The focus all to often is to the interests
of the carrier as opposed to the objective evaluation
of the issues. The fundamental duty of the claims
representative is to be objective, claims that are
owed should be paid without the creation of conflict
when possible.
3. Promptly Investigate: One of the most common
complaints I had as a manager was the failure of
adjusters to promptly investigate. Without prompt
investigation claims are paid that are not owed,
claims are not paid that we do owe, and those we
represent are not provided the fundamental service
that is the basic promise of the policy. The
fundamental role of the claims department is to
investigate.
4. Timely pay: The lack of timely payment of
policy benefits to the insured are a common fault
seen all to often. Rather than create resolution
all to often roadblocks are placed in the path of
an insured or claimant. Keep in mind there is an
additional fundamental role of the adjuster that is
to pay claims that we owe and pay them promptly
without conflict.
5. Timely respond: This is from the perspective
of all parties that have an interest in the claim.
Prompt communications is lacking in many
of the cases I review, to the insured, claimants
and plaintiff counsel. Failure to communicate
leads to misunderstanding and the hardening
of positions, litigation and claims of bad faith.
6. Meaningful response: Promptness is but one
element, I have answered many questions
regarding yes, you sent me a letter or called
me, but what you said had little to do with the
issue or skirted the issues. The claims
department must provide meaningful responses
that address the claims issue at hand, the
failure to do so, creates adversity and in turn
leads to claims of bad faith.
7. Set expectations: One of the primary
drivers of complaints is the failure to set
expectations with an insured or third party
up front. I have observed that if an adjuster
tells, a person you can expect the following
in the handling of your claim, then they do
not set their own expectations. My
observation is, if you do not set expectations
for people, then they set their own.
8. Meet your Commitments: A primary driver
of complaints is the failure to make good on
your promise to an insured or third party claimant. When you make a promise to do
something by a certain date or take a
action and do not then conflict sets in.
9. Communicate: In self insured accounts
or large SRI accounts it is critical that regular
communications with the insured take place,
this is a driver of the complaint process, and
one of the key complaint issues I dealt with
as a claims manager and claims vice president.
10. The Promise: Do not place your interests
before that of the insured. One of the driving
issues in the bad faith cases I have seen, on
the first party side, be it UM, UIM, Property,
or disability cases is that when the interests
of the insured are placed secondary to that
of the carrier, then the promise made to the
insured is broken. After all the essential
promise of the policy is the promise to pay
the insured at the time the insured counts
on those benefits. When the essential
balance is broken, two things occur, first is
trust is no longer present and secondly the
promise is breached.
Mike Cerf
Expert Witness Insurance Claims
Sherwood, Oregon
503-925-1937
mcerf@teleport.com
