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Before an auditor can fully understand what he or she is looking at—either in an insurer’s or self-funding entity’s overall loss data or in individual claim files—the auditor must understand that insurer’s or entity’s claims philosophy.

Every insurer or self-funding entity has a basic philosophy to dictate how claims should be handled. Some self-insureds are so paranoid that they believe every claimant is a thief and a fraud, even their own employees. They are ready to fight every claim all the way to the Supreme Court if necessary. A few insurance companies follow a similar philosophy: lowball everybody, stonewall to the bitter end, and don’t settle until standing on the courthouse steps. These tactics work occasionally, wearing the claimants or insureds down to the point where the claim is surrendered out of sheer frustration. Other times, the claim ends up in court with the jury awarding punitive damages to the insured or claimant for the aggravation they have sustained. Fear not; there will be an appeal!

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