We all know the three basic questions of any insurance claim. Regardless of whether it is a first party claim or a third party claim, the claim professional has to answer all of the following:
1.Is the loss covered?
2.Is there liability that will trigger the policy coverage?
3.Did damage arise as a proximate cause of the liability?
Adjusters take different approaches to resolving these questions; however, they are prerequisites to the proper disposition of each and every claim. The absence of any one of them will negate a claim. There should be no doubt as to the significance of these issues.
How to get the questions asked and answered? To the prerequisite list, I would add a common, but often overlooked word, communication. The adjuster has to be an effective communicator. Nothing derails a claim more quickly than lack of communication on the part of the adjuster, independent or staff. The independent adjuster does have an additional responsibility in that he must communicate with two parties, the carrier who hires him and the carrier’s policyholder.
Everyone knows the importance of prompt contact, but where does one go from there? In the example of a first party property claim, the adjuster cannot make initial contact with the policyholder and then forget about him. In too many instances, I am contacted by insureds whose only complaint is lack of follow-up communication on the part of the adjuster.
Let’s consider the wrong approach. The adjuster makes the initial contact, schedules an appointment to inspect the damages, and actually keeps the appointment. He then scopes the damages, prepares an estimate, answers the prerequisite questions, and forgets about the policyholder. The adjuster goes on to other appointments, other claims, other duties; there is no question that adjusters are very busy. The problems arise, however, when the insured calls his company, or his agent, or the adjuster’s supervisor, or the insurance department, and echoes the popular refrain, “The adjuster came out and looked at my damages, and I haven’t heard from him since.”
Now, let’s look at the proper way to handle the same situation. Remember the key word, communication? The adjuster could have prevented all the calls mentioned above, simply by communicating with the insured as soon after his inspection as possible. Imagine the following conversation between the claim professional and a policyholder:
“Mr./Ms. Insured, I have inspected the damage to your roof, and I have prepared an estimate. Here is a copy of my estimate. I will be submitting this estimate to your insurance company, along with my report recommending that they pay your claim, subject to your deductible. You should hear from your company in a week or so. If you have any questions in the meantime, just give me a call at this number.”
Obviously, there are acceptable variations to this illustration. The important thing is to communicate, and tell the insured something. After having this sort of conversation, the adjuster can proceed with his other business, confident that the insured is well informed.
What if the loss is not covered? Many adjusters, independent adjusters in particular, do not have authority to make coverage decisions. However, adjusters handling claims for us are expected to be familiar with our policies, and they are expected to recognize most common coverage problems. For example, our policies exclude wind-driven rain. If one of our adjusters encounters a wind-driven rain claim, he is expected to bring that to the attention of the insured and inform the insured that he will be reporting his findings to us. It is our responsibility to formally advise the insured that his claim is not covered, but at least the insured will not be surprised when he hears from us.
As the saying goes, claim handling is not “rocket surgery.” Effective communication, however, clearly separates the professionals from the also-rans. In the insurance business, as in any other business, we must communicate with our customers. Claim service is the promise that insurers make to their customers and policyholders when the premium is paid. Without honest, effective communication, we will not deliver on our promises. Education is important, experience is important, but to reach the status of Claim Professional, a prerequisite is honest, effective communication.
William D. Morrison, AIC, is claim manager at South Carolina Wind & Hail Underwriting Association in Columbia, S.C.