So what sets an adjuster’s teeth on edge? Let’s explore an informal and highly subjective list I have composed:
1. Cheapskate insurance buyers. Some policyholders make insurance-buying decisions based on “the cheapest quote,” and then feign surprise when they don’t get platinum claim service. Usually things are cheaper for a reason. If you check into a Motel 6 and pay a bargain basement price, then please do not whine because the hotel lacks concierge service and a mint on the pillow. When shopping for insurance, many accounts are “all about price.” When they have a claim, it is all about service. Sorry, but those two usually go hand-in-hand—in both claims adjusting and in other realms.
2. Instant claims experts. Likely culprits are brokers on commercial accounts who become “experts” on reserves 30 days before renewal. Let’s ponder this scenario: Broker Dopey pays scant attention to an account’s loss runs until the expiration date of the policy looms. The underwriter quotes renewal terms, but at a 40-percent increase over the expiring policy. Startled and alarmed, the broker demands to know the reason. The underwriter points to a deteriorating trend of claim reserves. It dawns on brokers that incurred loss ratio actually does impact renewal terms and they announce that the case is over-reserved. Suddenly galvanized, the broker becomes an expert on claims and reserve-setting, advising the adjuster that the number is too high. The actuary looks at the same file and tells you it is under-reserved.
3. Having to cover the actuary’s you-know-what. The problem here is claim management getting called on the carpet by the corporate gods to explain why actual loss trends did not align with the actuary’s projections. Perhaps that is easier than challenging the $600-per-hour actuary who has never touched a real-life claim file. Plaintiffs and their lawyers have the annoying habit of failing to check with corporate actuaries before filing their lawsuits. A radical notion is to go back to the actuaries and ask them to explain why their projections deviated from actual loss patterns.
4. Windbag defense lawyers who call, only to yak for 45 minutes on routine items and then close by saying, “I’ll put this in a letter to you.” Thank you for wasting my time twofold. A possible fix: Initiate phone calls to adjusters sparingly. Be brief on the phone. Email a request for a block of phone time to allow the adjuster to schedule you according to his or her calendar.
5. Attorney evasiveness. Defense counsel who cannot give a straight answer to the question, “Based on all you know thus far, what is a fair compromise settlement value for my policyholder?” Instead, you get hemming and hawing, “On the one hand ... but on the other hand.” I know it is a tough call to make, but that is why I am paying you $250 per hour.
Related to this annoyance is defense counsel who cannot offer a straight answer to the question, “What will the case cost to defend?” Then more hemming and hawing ensue. I know the answer often is, “It depends.” I also recognize that sometimes these costs can spiral because of factors beyond defense counsel’s control. (They can also plummet for reasons unrelated to defense counsel’s efficiency.) If different unfolding scenarios will produce varying cost-of-defense numbers, then give a budget for each scenario, and I can take it from there. For example, “Budget A reflects the costs if we win our motion for summary judgment; Budget B reflects how things will unfold if we lose it; and Budget C envisions taking the case to trial.”
6. Lame promotional pitches. Here, we have defense counsel with tepid marketing pitches who cannot succinctly state what competitive advantage they have over the hundreds of other attorneys and firms in the same space, or who offer bromides such as, “We work hard” or “We are cost-effective.” Please be more creative than that. If this question catches you off-guard or only evokes platitudes, then it tells me you have simply not done your homework. One solution: perfect your “elevator pitch” as to why your firm really is different.
7. Rambling reports from defense counsel that bury the important stuff on page eight, paragraph three. Adjusters do not have time to search for a needle in the verbal haystack, that golden nugget tucked away. Make your written product user-friendly. Provide an up-front, one-page executive summary highlighting your finding and recommendations. If I want to probe amongst the weeds, then I can delve into your more detailed memo behind the executive summary.
8. Not reading or heeding written counsel guidelines. It drives adjusters batty when defense firms assure you that your written guidelines are “no problem” but convey in their initial billing, reporting, or handling that they do not have the foggiest idea. Like bobblehead dolls, they nod as you explain your guidelines. Remedy: lawyers who read and heed client guidelines. Conduct periodic in-house training refreshers on client guidelines. If anything is ambiguous, then ask for clarification.
9. Bait and switch. Some defense law firms “court” you with a rainmaker senior partner when you are a prospect but then staff your case with a newbie once you become a client. Caveat: if the firm asks to staff the case with a rookie or makes a strong argument as to why it makes economic sense, then try to be open-minded. It may make sense, given the exposure and complexity of the case. Do not assume that all newbies are incompetent.
10. Useless law firm newsletters. Many defense firms think I have an innate fascination with how the Eighth Circuit held on a certain case instead of offering me practical tips I can use or consider based on that ruling. One remedy is to urge law firms to report on developments and go the extra mile in explaining the practical takeaways for claims people.
Dave Letterman has his “Top Ten” lists. Hopefully this variation will be of use to you. I encourage you to craft your own. Before getting too smug, though, rest assured that attorneys and bosses will be compiling their lists of things adjusters do to drive them crazy.