Coverage Verification and the
How To Carefully Create and Manage Claims Screens
sooner or later, all adjusters will find themselves examining claims that pose coverage issues. These controversies may pertain to the date of loss, additional insureds, applicability of exclusions,
intentional acts, breach of policy conditions, late notice,
non-coverage for certain counts, or punitive damages.
It is considered a best practice for adjusters to assess coverage as one of the
first steps or the first step in handling any
claim. If there is no coverage, then liability and damages may be moot. If coverage is lacking, then that is game, set, and
match. “Game over!” Do not pass GO.
Do not collect $200—or rather anything
from the policy proceeds. Supervisors
and texts urge fledgling adjusters to first
verify coverage as a threshold issue. This
is sound advice.
Having decided that a claim poses a cov-
erage issue, however, new decision points
loom. Claims adjusters may deny coverage
outright. Alternatively, the adjuster may
ask the policyholder to sign a non-waiver
agreement. More typically, he or she will
send the insured a reservation of rights let-
ter. At this stage, there is a genuine cover-
age issue involving the claims file.
Challenges in setting screens
In basketball, setting a screen often
means risking a collision, and the same
applies to claims handling. Here are some
J When should the adjuster or the claims
unit bifurcate—that is, split coverage—
J Once a screen is in place, what communications are legit between the liability and
coverage adjusters? Is the screen ostensibly
an airtight, hermetically sealed chamber
with no passage between the two areas?
J Do all coverage questions merit a screen
between the liability adjuster and the coverage adjuster?
J Is there a need to create a “vertical”
screen within the claim department? How
high up the organizational chart must an
insurer build a screen to insulate itself
from bad-faith claims?
J When does the obligation to maintain a
screen between claims handling and cov-