iconoclast continued from p. 54
until a week or two after it happened did
not change the requirement of 24-hour
Were the file notes detailed and kept
Certainly all of these things are im-
portant. In many cases, however, they
represent time-wasters, serving only to
clutter up the adjuster’s already busy day.
They are easy to measure, which is why
auditors—especially those hired to “iso-
adjuster may not know enough about
the claim to discuss it correctly, as the
coverage and liability investigation may
be incomplete at that point. This is how
serious errors, including promises to do
this or that, get made.
a reserve that is set too quickly is apt to be
wrong. all too often that incorrect reserve will
remain on a file until further information indicates
the file is a sleeper worth far more.
current? Were any outside reports that
might help “decorate” the file—such as
a police report, a photo of the scene, a
fire department or an EMT report, and
so on—located in the file, and then discussed in the reports? Was there an acknowledgement of the assignment to the
agent or (if the claim was on behalf of a
self-funding entity) to the insured’s risk
manager? Was the first report made within a week, and was a reserve set quickly?
If not, then there had to be a good reason.
late the problem” but who nevertheless
have little, if any, personal claims experience—rely largely on them. None of
these things reflect the true quality of a
given claims adjustment. There is a police report in the file. So what? The cop
was not there to investigate the insurance
claim. He or she was there to see if there
had been a traffic violation or to provide
statistics for city, county, or state purposes. Such reports are helpful, but a savvy
adjuster will conduct his or her own investigation.
Why is it imperative to contact a doctor within 24 hours? Sure, one might
send a note stating the insurer has an interest in the file and will require a report
eventually. During the first 24 hours,
however, that doctor will simply not
know enough to comment. The doctor
may have only seen the patient for a moment and ordered other tests or x-rays,
which likely will not be available for days
or even weeks. All initiating contact at
that point will achieve is clutter the doctor’s busy day.
On the other hand, contacting the
claimant is crucial, especially when
dealing with an injury claim. Keeping
all of those TV ads for lawyers in mind,
the claims adjuster must get there first,
letting the claimant know that he or she
is not only concerned but also intends
to help. Just making a contact—which
is mandatory to achieve that quantitative A-Plus—says nothing about the
quality of the contact. If all the adjuster
managed to do was introduce him or
herself and anger the claimant by demanding documentation right off the
bat, then the 24-hour contact may have
done much more harm than good.
During the initial contact, the claims
Another relatively easy aspect to audit is the claims reserve. Did the adjuster
set one when the file was created? This
is something that auditors often want to
know. Again, how much can the adjuster
know about the claim at that point? If a
reserve is set on the sole basis of the accident report or other report by an agent or
an insured, then there is rarely sufficient
data available to establish an accurate reserve, barring that the insured ran over
and killed somebody, and the reserve is
for the policy limits. A reserve that is set
too quickly is apt to be wrong. All too often that incorrect reserve will remain on
a file until further information indicates
the file is a sleeper worth far more. However, nobody suspected that because the
prompt first reserve was never updated.
That can spell mayhem, for sure.
What makes a claim file reflect quality?
Appearances can be deceptive. A quantitatively oriented auditor may view a cluttered file negatively. If the adjuster’s personal method of filing documents makes
sense to the actual adjuster and does not
impede proper handling, then clutter is a
not a factor.
The adjuster’s job consists of investigation, evaluation, and negotiation or disposition of the claim. It must start with
the coverage investigation and evaluation. A properly handled file will reflect
that the adjuster has looked at every aspect of the claim and has determined
whether it matches the coverage. For
many claims, coverage may apply only
in part. The alert adjuster will determine
what is covered, and explain those factors to the insured, perhaps even issuing
a Reservation of Rights (ROR) letter, or
an Excess Loss letter. Coverage is the first
thing the auditor needs to check. Did the
adjuster investigate and correctly evaluate the coverage? Should issues arise, did
the adjuster correctly address they should