Section 4 - Claims Management Flashcards
What are the different kinds of personnel and specialty units needed by the claims department to carry out the tactical plan?
Internal personnel, independent adjusters, third party administrators, specialty adjusters, SIU, subrogation unit
Claims adjuster complete basic steps in claims, what does RIVER stand for?
Report, investigate, verify, evaluate, resolve
Report, prompt reporting is essential
Investigate
Verify, docs proving damages, receipts etc
Evaluate, what will be paid in claim determination, acv, replacement cost, fair market value
What is the initial case reserve?
Reserve money factored for loss generated by the claims software based on similar past claims
What are first party claims?
Losses suffered by the insured. Generally property related losses
What information does the adjuster need from first party claims?
Insurable interest, financial interest
Policy period, did loss occur within pol period
Policy limits, are the limits adequate, meet co-insurance ?
Covered cause of loss, caused by covered peril
Endorsements, added or delete coverage
What are third party claims?
Claimants that are not insureds that have been injured or had prop damaged by an insured. Involve determination of legal liability
What are the steps to determine legal liability of third party claims?
Insured status, are they an insured?
Coverage territory, take place in covered territory
Exclusions, any that apply
Policy limits, are limits adequate
Policy period, take place during pol period
Occurrence, as defined in pol
Legal liability, Insd legally liable?
What is covered/ no legal liability determination of coverage?
Certain coverages that pay regardless of fault, such as med pay or state required no fault coverage
What is “not covered/ with legal liability” coverage?
Pol holder held legally liable for a situation not covered by the policy, such as breach of contract or certain pollution losses
What are the three types of liability that can affect a claim?
- Statutory, created by law, take precedent over contracts
- Contractual, assumption of liability
- Tort, a civil wrong. Different torts- negligence,
What are the different types of torts?
Negligence, failure to exercise appropriate amount of care given
Intentional torts, harm caused may or may not be intentional
Strict liability, found in products liability, up to party subject to prove they were not negligent
Absolute liability, imposed without regard to fault, pool accidents, dog bites, liquor liability
Outside evidence not contained in policy or lawsuit considered claim coverage is called what?
Extrinsic evidence rule
How does detrimental reliance occur in a claim situation?
Reasonable induced promise by company that there is coverage when there is not. Which creates an “estoppel,” good faith reliance on a misleading mis rep and injury or positional change resulting from that reliance.
What two processes are used to avoid an estoppel where an investigation must completed prior?
- Reservation of rights letter, unilateral- only signed by one party.. if claim is investigated, claim can still be declined
- Non-waiver agreement, bilateral, sighed by both parties, if issue with coverage, still reserves right to later deny coverage
Courts may interpret ACV in one of three ways:
Replacement cost, less depreciation
fair market value
Broad evidence rule, all evidence considered
Black law’s dictionary, more than one party at fault is called what?
Comparative negligence
What is joint and several liability?
Involves more than one defendant, may be referred to as “deep pocket defendant “ law mat provide potential for contribution
What is the difference between special damages and general damages?
Special damages referred to as economic damages,monetary in nature, medical bills lost wages
General damages are not monetary, pain and suffering, mental anguish
What are the four ways of resolving a claim?
Pay in full
Pay in part
Deny without payment
Close without payment
When a claim is reviewed by a panel of claims experts, this called what?
Arbitration
Consent to settle clause reserving the right for the ins co to charge the insured settlement costs if they don’t consent to settlement from third party claimant
Hammer clause, soft hammer or velvet hammer
Non consent or no participation settlement provision?
Type of settlement clause seen most commonly with gl or business auto, right to settle lies with the insurance company not the insured
Name some acts of unfair claims practice
Refusing to pay claims without proper investigation
Failing to communicate promptly
Making claim payments to insd without indicating coverage
Vital to company’s reputation
What is the transfer of rights of recovery against others to us?
Subrogation provision, made whole doctrine common law
How is salvage described in the black’s law dictionary ?
Property saved or remaining after fire or loss that has been retained by an insurance company, that has compensated the owner for the loss.
Why can a “tripartite relationship be viewed as a conflict of interest?
The outside counsel defends insured and ins company
Unreasonable and unfounded Refusal to to provide coverage is called what?
Bad faith, common law implied duty
What are some factors of CAT planning?
Size of ins co
Geo location of ins co
Claims dept staffing model
Lines of biz written
Why is claim technology important?
Needs to be able to handle and execute the diversity of claim activity and provide staff with ability to navigate this complexity.
