Adjuster Pro 2
No Release Settlement
"Walk Away" settlement - insurer pays the bills submitted by the claimant - signing and cashing a check substitutes for the Release Form
Evaluation Pt 2
- apply policy coverages and provisions
6th: Evaluation Pt 1
- determine the time and cost of repairs - additional expenses caused by the loss - any applicable medical bills - lost wages - time frame of repairs
Independent Adjuster
-can be called a fee adjuster or bureau adjuster - not contracted by any one insurer - self employed - processes claims for multiple insurers at the same time - paid by fee schedule, daily rate, or time + expense - sometimes paid on a commission basis
Contribution of Equal Shares
-each policy pays an equal share of the loss up to the lowest policy limit -Process repeats until loss is paid in full or all policy limits have been reached
Mediation
-mediator is a neutral 3rd party - mediator only advises in the negotiation - mediator's decision is not legally binding - settlement is only legally binding if both parties agree to it - either party may "walk away"
1st step in Claims Process for Adjuster: Acknowledgement
-respond to claimant by letter or phone within required amount of time - keep track of the date of first contact
3 preliminaries of negotiations
1. is there coverage? 2. what is the insured's liability? 3. what are the damages?
Negotiation
A process by which two opposing parties attempt to merge their respective interests in order to yield a balanced and beneficial outcome for both parties
Liberalization Clause
Any change to a policy form that broadens coverage without increasing the premium automatically applies to the issued policies of that type
Negotiation Tips: The "give and take"
Approach negotiation with an open mind, it is impossible to prevail on every point, conceding some points increases likelihood of opposing party conceding points, inflexibility prevents negotiation
Investigation: Liability Claims
Bodily Injury: type of injury, copies of all medical bills & receipts, documentation of lost wages, severity of injury, are general damages covered? pre existing conditions that contributed to the injury? Other Liability Claims: is the policyholder liable? is there anyone else partially responsible? is there a lawsuit? how much would defending the lawsuit be? what are the chances of winning?
Prior to negotiations, the adjuster must:
Complete Investigation, complete estimate, no the circumstances, be clear about objectives, understand possible obstacles, no the maximum amount the insurance will pay, have an idea of the minimum amount the claimant will accept
Criminal vs Civil Trial
Crim: state vs citizen civil: citizen vs citizen
Investigation: Other Kinds of Evidence
Documentary/ Visual Evidence: deeds or leases, diagrams, sketches, photos, x-rays, contracts for construction or repair, employer records for wage loss claims Industry Experts: doctors and medical examiners, cart inspectors, engineers in the field, actuaries, handwriting experts
3 parts of a Statement
Introduction: names of the interviewer and the person making the statement + date, time, & place of interview Body: where, when, how the loss occurred + description of injuries + make and model or cars involved + where the driver started out, was heading, why + what happened after the accident Conclusion: interviewee verifies statement is true, signs on right, witness signs on left
Investigation: Recorded Statements
Introduction: state names and locations of everyone in recording + age & address of interviewee Body: same as Written statement, recording must stay continuous, stay objective, avoid excessive sympathy, don't discuss insurance or settlements
Additional Insured
Person or organization that is added to the policy at request of the first named insured and benefits from policy but is not allowed to make changes
4th: Determine Insurers Liability in the Claim
Questions to ask to determine if the insurance policy can apply to the losses being claimed; - was the policy active at the time of the loss? - does the claimant have an insurable interest in the losses? are there any other parties that also have an interest? - does the policy in question cover the type of damage or injury being claimed? is the proximate cause of the loss a covered peril? - does the claimant have a history of similar claims? - are there any other insurance policies that will also cover the loss? - has the insured complied with all policy conditions including what to do after the loss?
Overinsurance
The amount of insurance covering a risk which exceeds the insurable value of that risk - Insurer will only pay up to the insurable value - fraudulent intent voids the contract
Preponderance of evidence
The plaintiff must present more evidence supporting his case then the defendant
Primary
The policy pays up to the limit regardless of presence of another policy
Nonconcurrency
The situation in which two or more policies covering the same risk have different inception expiration dates
Work product
Work prepared for the insurer in anticipation of a litigation as long as the insurer would not have had the work done if it weren't for the lawsuit
Assignment Condition
a policy is not transferable unless the insurer agrees
Responding to the Claim: Accept and Pay
claimant has proven damages, adjuster determines settlement amount based on investigation, if amount is close to claimant's the adjuster comes to agreement and issues settlement check * small difference should be settled in favor of claimant
Agent
one who recieves the authority to act on behalf of someone else
Exclusive (Captive) Agent
paid on commission basis, represents one insurer at a time
Pro Rata
policies split the loss based on percentage of coverage each policy provides equal to the percentage of the loss
Excess
policy only pays once the primary policy limits have been exhausted
Negotiation Tips: Create a Good First Impression
professional appearance, respectful, neatly groomed, good hygiene
Common Settlement options to calculate a fair Indemnity
property claims: repair property, replace with like kind and quality, replace with new, pay fair value for damaged property liability claims: special damages, general damages, punitive damages
Sales Agent
receives authority to sell -authority given by written contract
Criminal trial's burden of proof
- 12/12 jurors must be convinced - guilt must be proven beyond a reasonable doubt
Appraisal
- a definite disagreement must exist prior to appraisal - each side chooses an appraiser - both appraisers agree on an umpire - agreement by any two of the three is binding * appraisal only decides settlement amount, not whether coverage exists in the first place
Draft Authority
- adjuster can settle directly with claimants and write checks for the insurer - often limited to a certain amount - w/o this the adjuster would have to submit settlement for approval
Arbitration
- arbitrator is a neutral 3rd party - arbitrators decision is legally binding - costs less than going to court - less formal atmosphere - arbitrators have more expertise than juries
Two main goals in the Claims Function
- comply with the terms of the contract - support the insurer's financial stability
Declaratory Judgement Action
- court declares the legal rights of both parties - court does NOT decide how to resolve the case - disputing parties use the court's decision to come to a settlement
Vacancy Condition
- defines vacancy for the purpose of coverage - specifies time period ( usually 60 days) and a condition - commercial buildings are deemed vacant if less than 31% of the available square footage is occupied for the set time period
3rd: Prepare All Necessary Paperwork
- determine the type of claim - make sure the claimant receives the correct paperwork and understands it & when they are do & any other obligation - promptly follow up with additional paperwork
Public Adjuster
- hired by claimant - charges on commission (usually 10% of settlement) - hired when the insured knows the insurer will be making a payment for the claim - helps determine the proper identification and valuation of a loss - specializes in appraising and negotiating claims
Scheduled Payment Release
- insurer agrees to pay for all compensatory damages ( special and general) up to the point of settlement - insurer also pays for certain future "incidentals" - most commonly used in Worker's Comp claims
Partial Release: Payment of Property Damage; Bodily Injury Pending
- involves claims that have property damage and bodily injury - insurer indemnifies all property damages while it awaits the proper indemnification for bodily injury
Last Resort: Litigation
- letting a court of law decide the case - can be expensive & unpredictable - try to avoid
2nd: Open Lines of Communication
- make sure there is a way to communicate with claimant - provide business address & phone # - respond to claimants questions promptly
Initial or Preliminary Report
- required within 15 days of receiving the claim - time lines and deadlines - apparent losses - liability issues - applicable coverages -initial claim reserve ( money that the insurer sets aside in prep for paying the claim)
Structured Settlement
- series of smaller payments over time - reserved for largest claims - insurer often must pay a portion up front
Advance Payment Settlement
- used when the claimant's damages are mostly bodily injury and the claimant is unable to work - involves a series of partial payments that will be subtracted when the final settlement amount is determined - decreases chance of lawsuit
Reporting to the Principal
-the adjuster must give the principal frequent and regular updates on her progress on a claim
Interim (Status) Report
-update on claim progress - due at set intervals (15 or 30 days) as long as a claim is open - new evidence - medical information - repair estimates
Responsibilities of an Insurance Adjuster
1. acts as the Fiduciary Agent 2. has the Power to Bind 3. must Report to the Principal
Three major responsibilities of contracted agents
1. follow the contract 2. always use reasonable judgement & care 3. provide all necessary information and documentation to the insurer
Discoverability in a Claim File
In court the adjusters claim file is discoverable and must be handed over
Liability vs Property Claims
L: harder to assign dollar amounts Factor in issues like mental duress and comparative negligence P: cost to repair or replace is simple and straightforward
What is an Independent Insurance Sales Agent?
a self employed agent that is able to represent and offer insurance products from more than one company at a time. -able to compare and give rate quotes from diff companies - able to find a policy that bear fits the customer
Responding to a Claim: Is Negotiation Possible?
adjuster must know the exact amount the insurer is willing to pay to settle prior to investing time in the negotiation process
Responding to a Claim: Dispute Resolution
adjuster/claimant negotiation only work if both parties are motivated to settle - easiest, lowest- cost negotiation option
Full Release Settlement
aka "Full Release of All Claims and Settlement Agreement" - all damages paid at once - most common settlement option - by signing the claim, the insured releases the insurer from additional claims connected to the agreement and discharges all claims against insurer
What is included in the Claim File?
all claim details, copies of all communication, all evidence from the investigation - must recon reduce the loss and how it was handled
Final ( Full) Report
all facts and evidence of the claim, policy coverage applied, adjusted losses, & final claim disposition
Fiduciary Agent
an adjuster must: - have authority granted by insurer via a contract - act for, and on behalf of, the principal(the insurer) - protect the principal's financial and property interests - adjuster must always act in the principal's best interest with utmost good faith
What is an Insurance Adjuster?
an agent who processes insurance claims for a salary, fee, or commission
Who can an Adjuster work for?
an insurer, a private company, an adjusting company, or the claimant (insured)
Express Authority
authority that is directly granted to the agent in writing via the agent's contract authority to: sell policies, collect premiums, issue binders, offer discounts, & cancel insurance
Legal Action Against Insurer
before anyone can sue an insurer, The insured must meet all the obligations and comply with all the terms set by the policy and the insurer cannot be held liable for damages that the policy does not cover
Non-Waiver Agreement
claimant agrees that adjuster's words and actions do not bind the insurer -typically used in catastrophe situations
Negotiation Tips: Develop Trust
claimant and adjuster must trust each other
Competitive Estimates
claimant get additional repair estimates from different mechanics - insurer compares estimates to come up with fair settlement - must be based on physical inspection not pictures
Responding to a Claim: Reject Request & Deny Claim
claims are denied when: the damages aren't covered, the claims are fraudulent, the damages can't be proven, if the loss occurred outside the policy period
Attorney-client privilege
confidential information between the attorney and his client shared as part of the process of getting legal advice
Responding to a Claim: Negotiate with Claimant
damage is covered, but the claimant is asking for more than the insurer is willing to pay, so the adjuster must negotiate to find an amount that will settle the claim
Things contained in an adjuster's loss report
date of loss, names of everyone involved, detailed description of loss, tort & tortfeasors if any, also details about the policy
Staff (Company) Adjuster
employed by one insurer, salaried, can work locally, regionally, nationally ex. State farm
Investigation: Critical Evidence
examine scene of loss or damage, photograph damage, sketch the property, take statements, document skid marks to determine point of impact
Other Insurance / Apportionment
guidelines for settling claims when more than one policy covers the damages - enforces the principle of indemnity
Recovered Property
if one party recovers damage to property after the claimant was indemnified that party must notify the other party
Apparent Authority
indirect authority that is granted when the insurer does NOT correct its agent, even though the agent may be acting in error
Insurance Adjuster
receives authority to settle claims brought against the insurer - authority given by written contract
Purpose of Exclusions
remove coverage for uninsurable losses, manage moral and morale hazards, eliminate coverage duplications, remove coverages that typical consumers don't need & coverages that need special treatment, lower premiums
Investigation: Official Reports
reports the adjuster might consider: police reports, fire department reports, death certificates, autopsy reports, corners inquest, medical reports, weather reports, school records, court reports from previous crimes, birth and marriage certificates, coast guard reports, CAB reports
Direct Writer
same as exclusive agent but works for salary
day-to-day activities of a sale's agent
sell insurance policies, service policyholders' contracts, collect premiums, represent the insurer
Consequences for failure to appear to mediation
severe for the insurer- contempt of court and penalties mild for the plaintiff- no penalty or minor penalty
Negotiation Tips: Minor ( but important) Details
solving simple , trivial matters can get negotiations unstuck ex. an apology
In an investigation, critical evidence includes what?
statements from the claimant and at fault party, sketches of the property, and photographs of the damage
Why would a Reservation of Rights be issued in step 4?
tells claimant the insurer will start the claim but might deny it used when: - there is a coverage dispute - the claimant took too long to report claim
Emergency Adjuster
temporarily licensed individuals who handle claims after natural disasters or catastrophes - only allowed to work on claims related to disaster
5th: Investigation - Property Claims
the adjuster must inspect damages, take pics, interview claimant and witnesses, review police report, consult with professionals
Implied Authority
the authority that the public reasonably believes the agent to have, based on the agent's representations: portraying oneself as a representative, wearing a name tag with a company logo, handing out company business cards
A witness who has had a recorded interview must have:
the chance to add or correct any details in his statement
The Power to Bind
the principal is bound by the adjuster's decisions and actions. this authority: - is granted to adjuster in writing - means the adjuster may act on behalf of the employer - binds the employer
What is Adjusting?
the process of comparing a claimant's losses to the promises made in an insurance policy
Claim Function
the process of handling claims for coverage under an insurance policy -primary role of an adjuster
For a bodily injury liability claim what must the adjuster determine?
the type of injury and it's severity, and the presence of pre existing conditions
Investigation: Witness Statements
useful for: revealing new information, painting claim picture from different viewpoints, disputing account given by claimant or other witness, impeaching a witness credibility if he changes his story
When are there no negotiations when responding to a claim?
when the dollar amount is too great or too small or for punitive damages
Settlement
when two parties in a dispute reach an agreement - when settlement is reached the claimant gives up the right to seek any further damages, & right to sue
General Agent
works for one company and supervises/trains the exclusive agents
Civil trials burden of proof
wrongdoing proved by a preponderance of evidence
