Adjusting the Claim Flashcards
Claim definition
A formal request to settle the damage.
Claim basics
- Claimant must from the loss and submit the total to insurer.
- Insurer sends an adjuster, who must decide whether claimant has adequately proven the loss.
Claims process
- ) Acknowledge the claim
- ) Establish lines of communication
- ) Prepare necessary paperwork
- ) Determine the time and cost of repairs
- ) Investigate the losses
- ) Determine the time and cost of repairs
- ) Apply all policy coverages and provision
- ) Negotiate a settlement
- ) Prepare final reports
Claims process section 1.) Acknowledge the claim: steps
- ) Respond within required amount of time.
- ) Contact via letter or phone call.
- ) Keep track of the date of first contact.
- ) Adjuster: liaison between claimant and insurer.
Claims process section 2.) Open lines of communication: steps
- ) Make sure there is a way to communicate with claimant.
- ) Provide current business address and phone number.
- ) Respond to the claimant’s communications promptly.
- ) Answer any questions.
Claims process section 3a.) Prepare all necessary paperwork: steps
- Determine the type of claim it is.
- Prepare the necessary paperwork to process the claim.
- Make sure the claimant receives and understands how to complete the required paperwork.
- Proof of loss forms:
- help insurer begin its investigation
- Often due within 60 days
- Promptly follow up with additional paperwork, if required.
Claims process section 3b.) Preparing paperwork: the claim file steps
- Organize source of documentation for all claim details.
- Copies of all communications
- Evidence from investigation, such as:
- photos/sketches if property
- copies of medical bills
- copies of all claim forms
- witness statements
- Claim file must reconstruct the loss and how it was handled
Claims process section 4.) Determine Insurer’s Liability in the claim: steps
- ) Was the policy active at the time of loss?
- ) Does the claimant have insurable interest?
2a. ) Do any other parties have insurable interest (mortgage company, etc)
3a. ) Does the policy cover the type of damage or injury being claimed?
3b. ) Does the policy cover the proximate cause of the loss? - ) Is there a history of similar claims? If so, have they reduced the policy limit available for this loss?
- ) Will any other policies cover this loss?
- ) Has the insured met all requirements of the contract?
If covered, move on to next step. If NOT covered, deny the claim with a full explanation.
4b) Reservation of Rights: What is it and when is it used?
Tells claimant the insurer will start the claim, but might deny it. Used when: There is a coverage dispute, or the claimant took too long to report claim.
Claims process section 5a.) Investigation: Property claims: steps
- Inspect damages
- Take photos
- Interview claimant and witnesses
- Review police report
- Consult with professionals
Claims process section 5b.) Claims investigation: steps
- Liability claims
- Bodily injury
- Other Liability claims
- Critical Evidence
- Official Reports
- For Auto Claims
- Other Evidence
- Documentary/ Visual evidence
- Industry experts
- Written Statements3 parts of a statement
-Recorded Statements
5b1a) Claims investigation: Liability claims: Bodily injury
- Type of injury
- Copies of all medical bills and receipts
- Documentation of lost wages.
- How severe is the disability, impairment, or disfigurement?
- Are general damages covered?
- Did any pre-existing condition contribute to injury?
5b1a) Investigation: Liability claims: Other Liability Claims
- Is policyholder liable?
- Is anyone else partially responsible?
- Is a lawsuit imminent?
- How much would defending a lawsuit cost?
- What is the probability of winning?
5b2) Investigation: Critical Evidence
- Examine scene or loss or damage
- Photograph damage
- Sketch the property
- Take statements from claimant and the at-fault party (if applicable)
- Inspect and photograph the damaged cars
- Document skid marks to help determine point of impact.
5b3a) Investigation: Official reports
- Police reports
- fire department reports
- Death certificates
- Autopsy reports
- Coroner’s inquests
- Medical reports
- Weather reports from the time of the loss
- School records
- Court records from previous crimes
- Birth and marriage certificates
- Coast guard reports (boating incidents)
- Civil aircraft board (C.A.B) reports (aircraft)
5b3b) Investigation: Official reports: additional reports helpful for auto claims
- State reports filed by the people involved in the accident
- Motor vehicle inspections
- Traffic court proceedings
- Hack bureau reports if the accident involved a taxi
- Reports from the Interstate Commerce Commission (ICC) for trucking accidents
5b4) Investigation: Other evidence
- Documentary/ visual evidence
- Deeds/leases
- Diagrams
- Sketches
- Photos
- X-rays
- Contracts for construction or repair
- Employer records for wage loss claims
- Industry experts
- Doctors and medical examiners
- Car inspectors
- Engineers in the field (mechanical, structural, electrical, etc.)
- Actuaries
- Handwriting experts
5b5: Investigation: Written statements can be useful for:
- Revealing new information
- Painting claim picture from different viewpoints
- Disputing account given by claimant or other witness
- Impeaching witness credibility if he changes his story in court.
3 parts of a written statement
- ) Introduction
- Identify interviewer and interviewee
- Date, time, and place of interview - ) Body
- Where, when, how the loss occurred.
- Description of injuries.
- Make and model of cars involved.
- Where the driver started out, was headed and why.
- What happened after the accident (conversations, police, ambulance, hospitals, etc.) - ) Conclusion
- Interviewee verifies in own handwriting that the statement is true
- Signature below the conclusion on right of page
- Witness signs on left.
3 parts of Recorded statements
- ) Introduction
- State names and locations of everyone on recording
- Age and address of interviewee - ) Body
- Same goal as written interview
- Recording must be continuous: explain any interruptions
- Stay objective: no leading or argumentative questions
- Avoid excessive sympathy
- Don’t discuss insurance or settlements - ) Conclusion
- Interviewee has a chance to add or change any details
- Interviewee must verify that he understood all questions and answered honestly.
- Interviewer states again that conversation was recorded.
6) Evaluation Step 1: Determine time and cost of repairs
- Cost to repair or replace damaged property
- Additional expenses caused by the loss
- Any applicable medical bills
- Lost wages
- Time-frame of repairs
Competitive estimates
- Claimant gets additional repair estimates from different mechanics
- Insurer compares estimates to come up with fair settlement
- Estimates must be based on physical inspection, not pictures or descriptions
7a) Evaluation step 2: Apply policy coverages and provisions
- Relevant deductibles
- Coinsurance penalty, if applicable
- policy limits
- policy valuation is depreciation a factor?
- Coverage exclusions or extensions
- Other policies that may cover the same losses
7b) Evaluation step 2: Common settlement options
- Property claims
1. ) Repair property
2. ) Replace with like kind and quality
3. ) Replace with new
4. ) Pay fair value for damaged property - Liability claims
1. ) Special damages-objective expenses like medical bills, repair bills, lost wages, etc.
2. ) General damages- intangible losses like pain and suffering, loss of use, etc. Often determined by court.
3. ) Punitive damages typically not covered- but state law may allow.
8a) Negotiation and resolution
- Goal: to find a settlement amount that is fair and equitable for all parties.
- The adjuster proposes a settlement to the claimant
- If the claimant doesn’t accept the amount, the adjuster will need to negotiate a sum they both find acceptable.
When is a negotiation not necessary?
When the value of the insured item is pre-established.
-Ex.: An insured sculpture with an established value is damages. Neither party can dispute the value, so the insurer cuts a check, an the claim is settled.
8b) Negotiation complexities
Situations that make negotiation complex:
- liability issues
- multiple coverages
- unclear causes of damage
- disputed damages
- legal issues
- uncooperative claimants
The adjuster must qualify the settlement:
- ) explain the reasons for the settlement amount.
- ) Step-by-step justification for decision.
9) Prepare final adjustment reports
- provide final settlement documents to claimant
- explain settlement documents
- inform claimant of repair deadlines
- explain depreciation recovery (if applicable)
- Store related claim documentation
- close the claim
