NEW ORLEANS–The bad attitude of claims personnel in handling policyholders impacted by Hurricane Katrina could generate a mass of litigation costing insurers billions, warned one expert who teaches proper claims handling for a living.
Carl Van, president and chief executive officer of International Insurance Institute in Gretna, La., made his prediction at the ACE claims conference sponsored by The National Underwriter Company, parent of this Web site.
Mr. Van–who told of personally being on the receiving end of some horrific claims-handling practices–said he was disappointed in the way his sector had performed.
The insurance business is going to lose $5 billion "over the attitude we sent out," he said, predicting the result of an unsympathetic, unhelpful response will be "a swarm of bad-faith suits."
Mr. Van–who conducts training seminars for insurer claims personnel, has written on claims handling, and served as an expert witness–advised his audience of claims professionals that their credibility "comes from understanding where the other person is coming from."
Rather than work from the perspective of providing customer service, he said, insurers took the attitude of finding any way they could to deny claims and "making sure we don't pay a dime we don't have to."
In his own case, he said, he tried to be proactive and make a claim for additional living expenses while he was unable to return to his Louisiana home after Hurricane Katrina hit. He was told he could not receive anything without a damage report.
Eventually, when he was able to make a brief return visit, he found his pool was infested with swamp debris and a swarm of insects, making the house inhabitable.
His insurer, he said, without ever sending an adjuster, rejected his claim for additional living expenses and said he was getting "technical" when he noted policy language that covered the entire premises.
Later–after he paid to have his pool cleaned so he could return home–an adjuster failed to arrive and kept him waiting for days to look at the home, he noted. The adjuster also found problems with dates on bills he submitted, because the adjuster failed to recognize that power outages in Mississippi delayed entry of the bills, he added.
Mr. Van, who is still battling to recover additional living expenses from his insurer–which he declined to identify–said only yesterday were the shutters on his home repaired.
Proper handling of claims, he advised his audience, involves:
o Acknowledging the importance of the claim to the policyholder.
o Showing empathy and understanding of their situation.
o Letting the policyholder know their worries are normal.
o Reassuring policyholders that you have experience in handling claims, and "promise to do a good job."
In his own case, among some of the negative remarks he related: "Well, we didn't cause the hurricane," and, "My job isn't customer service."
He closed his presentation by showing photos of the Katrina devastation, grieving victims and an improvised grave. He urged his audience to try to help one customer at a time, leave good impressions, and not to "worry about what everybody else [in the business] is doing."
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