Study 6: Loss Investigation - Summary Flashcards
1
Q
The need for and the elements of a plan of action for a loss investigation
A
- Part of any investigation plan must consider the legal obligations of the insurer.
- The scope of an investigation is primarily determined by the magnitude of the loss.
- An investigation plan considers what will be done and what will not.
- When fraud is a possibility, an intense investigation by a highly experienced loss adjuster may be warranted.
- Most insurers follow established protocols to respect privacy laws.
2
Q
Preserving the Insurer’s Rights
A
- In most cases, loss adjusters notify the insured as soon as they become aware that a coverage issue exists on a claim.
- When coverage is in question, loss adjusters may need to preserve the legal rights of the insurer by asking the insured to sign a non-waiver agreement or by sending a reservation of rights letter to the insured.
3
Q
Non-Waiver Agreement
A
- Informs the insured of a coverage concern
- Mentions that an investigation to determine coverage and quantum is under way
- Investigation is not an admission of liability by the insurer
- Includes necessary information of the claim and the issues regarding the insurer’s stance on it
- Requires the insured’s signature to give it legal effect.
- Adjuster must explain reason for the agreement and what will happen if the claim is not covered in order for the insured to give informed consent
4
Q
Reservation of rights letter
A
- If insured refused to sign the non-waiver agreement, a reservation of rights letter can be sent. Advises insured that coverage for a claim may not apply.
- The reservation of rights letter is a unilateral assertion by the insurer that it is preserving its options and waiving none of its rights.
- Does not bind the insured or acknowledge coverage, making it difficult for the insured to allege waiver or invoke estoppel
- Must be delivered by hand or registered mail to the last known address on file
5
Q
Factors that determine the scope of an investigation
A
- The magnitude of the loss is the primary determinant of the scope of an investigation
- Potential cost of an investigation must be balanced against the expected outcome
- Conscientious desire to complete a thorough and accurate investigation must be balanced against the precious resources of time and money
- The type of claim and the particular circumstances will determine plan of action
6
Q
Factors that might alert an adjuster to fraud
A
- Claimants press too aggressively for a quick settlement
- Claimant has financial problems
- Recent changes made to policy – adjuster should contact broker
- Did insured become separated or divorced shortly before loss?
7
Q
Preparing for and Conducting the Interview
A
Preparing for an interview with a witness, a third party, or an insured tends to improve the chances that the needed information will be obtained and lessens the number of mistakes made. An action plan will focus the adjuster on the task at hand. Loss adjusters must review existing documentation—including background information from police reports, newspaper accounts, or a prior visit to the accident scene—to help focus the questioning.
8
Q
Checklist for conducting the interview
A
- Adjusters should anticipate any coverage issues and be prepared to answer questions about deductibles and other relevant terms and conditions of coverage.
- The interview should be scheduled as soon as possible following the loss.
- Enough time must be scheduled to properly conduct the interview; a location that minimizes interruptions is useful. Environment should be conducive to a businesslike yet relaxed conversation.
- Loss adjusters can use various types of questions to obtain information; questions can be modified as required.
- Loss adjusters must spend time assessing personality traits and establishing rapport with the person to be interviewed.
9
Q
Model interview approach
A
- Introduce yourself
- Start with open ended questions (ex. “Please describe what happened in detail”)
- Listen patiently to learn about what happened
- Ask for explanation when something is not clear
- Insurer may have a general set of questions that must be asked
- Don’t ask too many questions at once, wait for the person to finish
- Maintain composure under all circumstances
- Evaluate body language
- Take notes in an unobtrusive way
10
Q
Taking statements
A
- Statements can provide a record of an accident or a claim or preserve the facts of an incident or other policy-related circumstance; they may also be required as evidence in a judicial setting.
- It is particularly important in claims involving an accident.
11
Q
Interviewing Witnesses
A
- Particularly important in claims involving an accident. Impartial witnesses have more credibility than drivers or passengers in a vehicle accident.
- During the interview, information must be recorded that will allow anyone working on the file to locate the witness (ex. phone numbers, addresses, other identifying info)
12
Q
Types of evidence
A
- Oral
- Physical
- Secondary
13
Q
Oral evidence
A
- Established by interviewing a witness to obtain a description of how an accident happened
- A person who makes a statement may be called to provide oral testimony during a trial
- Written and recorded statements are usually produced in court only when it is necessary to challenge contradictory oral evidence
14
Q
Physical evidence
A
- Refers to tangible objects
- Examples: a fitting from a leaky dishwasher, photographs showing how a loss occurred, medical reports, documents such as books, policies, recordings etc.
- Also called real evidence in a judicial setting
15
Q
Secondary evidence
A
Reports from an expert presenting an opinion on the value of something or on the cause of loss.
