One of the most complex aspects of claims adjusting involvesbodily injury investigations.

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Provided coverage is in line, the immediate task is to determineliability. It's important to remember that a claimant must proveboth liability and damages in order to be legally entitled tocompensation.

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Liability is crucial because comparative negligence is often overlooked.Claims executives lament that claims are settled at either zero or 100%, withthe occasional 50/50 sprinkled in for good measure. The reality isthat roughly 3% of all claims are settled with a comparative negligence assessment. Whencompared to the more than 50% of all cases adjudicated by jurieswhere comparative negligence is assessed, a huge opportunity fororganizational improvement emerges.

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Consider the sheer number of claims involving intersections,lane changes, parking lots, slip and falls, assumption of risk, orliquor liability and the comparative negligence that should almostalways be evident. While there are numerous reasons for notassessing comparative negligence, there are also solutions. Atremendous upside has been identified through carriers who haveincorporated proven tools into the end-to-end third-partyprocess.

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A good rule of thumb for all adjusters is to never underestimatethe importance of liability as a critical element of the claimsinvestigation. Beyond the potential accuracy improvement inindemnity payments, there is a dramatic rise in subrogationpotential. An estimated 15% of all claims are closed with a missedsubrogation opportunity, costing the industry $15 billionannually.

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When it comes to the actual bodily injury evaluation, there arekey elements adjusters need to focus on when completing theirinvestigation. First is the relationship between the accident andthe injury. An adjuster may need to ask, “Just how did thesideswipe accident cause a disk herniation at L4-5?” or “How didthe $500 bumper ding result in the need for a spinal fusion?” Thesemay seem like basic questions, but they are rarely asked during thecourse of a claim.

Adjusters should be curious

This aspect of the investigation requires an insatiable curiosity by all adjusters. Thereare cases where some adjusters will accept what is presented by theattorney and simply try to negotiate down from the demand ratherthan arguing the facts.

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When an injury is identified in an auto claim, the first stepshould be to examine the vehicles. Telltale signs such as principledirection of force, metal deformation or striations can provide keyclues to the veracity of the alleged injuries. In any auto claim itis important to get detailed photographs of all vehicles from allangles, with photos that depict all damage.

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A good photograph will show the damage in relation to the otherparts of the car. Pictures should be taken from angles, front torear and rear to front, and then straight on. Photos should neverbe close up unless there is some key piece of evidence such as hairin a windshield crack. Photos can always be magnified, but it isvirtually impossible to improve a blurry photo taken from two feetaway.

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Attorneys don't like to argue causation because that is often aweakness for many claimants. In a country where the American MedialAssociation estimates that 80% of Americans will suffer back pain,causation is a very legitimate concern in virtually any claim whereback problems are alleged.

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The next consideration is the veracity of the claimant.According to the Insurance Research Council, insurance fraud andbuildup accounts for 13% to 18% in excess auto claim paymentsannually.

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driver on the side of the road after an accident

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Adjusters should investigate to see if the claimant has beeninvolved in any previous incidents. (Photo: Shutterstock)

Who is the claimant?

A good claimant profile is critical to building a qualityinvestigation. Has the claimant had prior claims? If so, when? Howmany? Was the claimant at fault? Was there a payment? What were theprior injuries?

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Surprisingly, many claimants have prior serious accidents wherethey were at fault, but claimed no injuries. However, when they arenot at fault, even in low impact claims, they suddenly have amyriad of problems that are all related to this once incident. Itis this type of detail that will sour a jury on a claimant and willinspire adjusters to dig for more information.

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Look at criminal records. Does the claimanthave prior felonies? Don't limit the search to the claimant. Havingan insured with a criminal record can pose just as many problemsfor the insurance company as a felonious claimant does for a triallawyer.

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Years ago during deposition, the defense attorney asked theclaimant about his prior sexual battery conviction. After a quickkick under the table, I reminded the attorney it was our insuredwho had the conviction and we were trying to settle this prior totrial for a very good reason. Some information may not beadmissible, but just like a good poker player effectively plays thecards dealt, so too does the effective adjuster.

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Consider the claimant's financial profile. Ifthis case heads to trial, a proposal for settlement, offer ofjudgment or similar document may need to be filed. This can act asa loser pay law, entitling the carrier to defense attorney costswith the right outcome. If the claimant is judgment proof, thisbecomes a far less powerful tool. While most claims don't go totrial, it is a very effective tool to leverage in negotiations withthe attorney, who is duty-bound to take all offers to theclaimant.

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Look at the claimant's professional licensure.In many states, licenses are required for numerous occupations.There was a claim involving a claimant who was an exotic dancer,and a city occupational license was required. Surveillance wasordered, exotic dancing was observed, and the case went away almostinstantaneously. This can be powerful information when professionsinvolving physical activity are known.

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Request a medical history. Depending on theinjury, ask for anywhere from five to 20 years. Always provide amedical authorization, and offer to do the search as well. Whileattorneys probably won't accept the offer, this demonstratesaggressive good faith claims handling. If there is a history, itwill be discoverable should litigation ensue, and the attorney willbe well aware of this.

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Never forget to check the licensure status of theplaintiff attorney and treating providers. This canusually be done through the secretary of state or appropriategoverning body in the jurisdiction. Look for prior disciplinaryaction and make sure that licenses are in good standing.

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Research neighbors and known associates who canprovide powerful testimony. Arguably, some of my best characterwitnesses were ex-spouses willing to share a multitude of details,including pre-existing conditions and their causes. Neighbors arealso great sources of information to share information like theinjured party routinely does yard work.

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Once the veracity of the claimant has been established, evaluatethe claim for special and general damages. The complexity of theinvestigation will vary based upon the type of claim. Some keyaspects of the medical bills will be to identify what is reasonablyrelated to the accident.

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Insurance claim forms

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Intentional miscoding, upcoding or unbundling the claims canmanipulate billing amounts. (Photo: Shutterstock)

Beware of 'games'

There is no shortage of “games” that can occur such as upcoding,unbundling, modifier abuse or improper use of global surgicaledits. Medical coding is very complex and requires significanttraining to become a certified coder. Basic information isavailable to adjusters such as benchmark pricing, but that doeslittle good if the provider has manipulated the bills in otherways. An effective tool for adjusters is a software applicationwhich can provide significant insight into what billings areallowable, and what treatment and duration were reasonable.

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Beyond the medical specials will be claims for lost wages,transportation or household replacement services. Again, it willtake a lot of investigation to determine the real damages,especially among the self-employed. Always request a copy of themost recent Schedule C from the claimant's income tax return. Insome instances there will be resistance to releasing thisinformation, which can be a red flag.

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The same goes for replacement services and transportation. Tounderstand what is owed requires digging into case law in yourparticular jurisdiction. The insatiably curious may go so far as toask the claimant for the route traveled and a description of theclinic, nurses and doctors.

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Once the specials are evaluated, the generals must beconsidered. This is a subjective area and inconsistencies oftenarise. The use of a decision support tool can provide moreconsistency.

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Adjusters are responsible for evaluating each claim based uponits own merits. Hopefully, these tips will help adjusters morethoroughly investigate each claim, since curiosity can provideimmeasurable returns.

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Christopher Tidball ([email protected]) is a casualty claimsconsultant and author of multiple books including Re-Adjusted: 20Essential Rules to Take Your Claims Organization from Ordinary toExtraordinary! and the insurance fraud thriller, Swoop & Squat.He spent more than 20 years as an adjuster, manager and businessleader with multiple top tier insurance companies. Visit www.christidball.com for more information.

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