Adjusting the Claim

Question 1

Claim definition

Answer 1

A formal request to settle the damage.

Question 2

Claim basics

Answer 2

• 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.

Question 3

Claims process

Answer 3

1. ) Acknowledge the claim
2. ) Establish lines of communication
3. ) Prepare necessary paperwork
4. ) Determine the time and cost of repairs
5. ) Investigate the losses
6. ) Determine the time and cost of repairs
7. ) Apply all policy coverages and provision
8. ) Negotiate a settlement
9. ) Prepare final reports

Question 4

Claims process section 1.) Acknowledge the claim: steps

Answer 4

1. ) Respond within required amount of time.
2. ) Contact via letter or phone call.
3. ) Keep track of the date of first contact.
4. ) Adjuster: liaison between claimant and insurer.

Question 5

Claims process section 2.) Open lines of communication: steps

Answer 5

1. ) Make sure there is a way to communicate with claimant.
2. ) Provide current business address and phone number.
3. ) Respond to the claimant’s communications promptly.
4. ) Answer any questions.

Question 6

Claims process section 3a.) Prepare all necessary paperwork: steps

Answer 6

• 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.

Question 7

Claims process section 3b.) Preparing paperwork: the claim file steps

Answer 7

• 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

Question 8

Claims process section 4.) Determine Insurer’s Liability in the claim: steps

Answer 8

1. ) Was the policy active at the time of loss?
2. ) 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?
3. ) Is there a history of similar claims? If so, have they reduced the policy limit available for this loss?
4. ) Will any other policies cover this loss?
5. ) 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.

Question 9

4b) Reservation of Rights: What is it and when is it used?

Answer 9

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.

Question 10

Claims process section 5a.) Investigation: Property claims: steps

Answer 10

• Inspect damages
• Take photos
• Interview claimant and witnesses
• Review police report
• Consult with professionals

Question 11

Claims process section 5b.) Claims investigation: steps

Answer 11

• 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

Question 12

5b1a) Claims investigation: Liability claims: Bodily injury

Answer 12

• 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?

Question 13

5b1a) Investigation: Liability claims: Other Liability Claims

Answer 13

• 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?

Question 14

5b2) Investigation: Critical Evidence

Answer 14

• 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.

Question 15

5b3a) Investigation: Official reports

Answer 15

• 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)

Question 16

5b3b) Investigation: Official reports: additional reports helpful for auto claims

Answer 16

• 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

Question 17

5b4) Investigation: Other evidence

Answer 17

• 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

Question 18

5b5: Investigation: Written statements can be useful for:

Answer 18

• 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.

Question 19

3 parts of a written statement

Answer 19

1. ) Introduction
   - Identify interviewer and interviewee
   - Date, time, and place of interview
2. ) 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.)
3. ) Conclusion
   - Interviewee verifies in own handwriting that the statement is true
   - Signature below the conclusion on right of page
   - Witness signs on left.

Question 20

3 parts of Recorded statements

Answer 20

1. ) Introduction
   - State names and locations of everyone on recording
   - Age and address of interviewee
2. ) 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
3. ) 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.

Question 21

6) Evaluation Step 1: Determine time and cost of repairs

Answer 21

• Cost to repair or replace damaged property
• Additional expenses caused by the loss
• Any applicable medical bills
• Lost wages
• Time-frame of repairs

Question 22

Competitive estimates

Answer 22

• 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

Question 23

7a) Evaluation step 2: Apply policy coverages and provisions

Answer 23

• 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

Question 24

7b) Evaluation step 2: Common settlement options

Answer 24

• 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.

Question 25

8a) Negotiation and resolution

Answer 25

• 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.

Question 26

When is a negotiation not necessary?

Answer 26

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.

Question 27

8b) Negotiation complexities

Answer 27

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:

1. ) explain the reasons for the settlement amount.
2. ) Step-by-step justification for decision.

Question 28

9) Prepare final adjustment reports

Answer 28

• 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