are $500,000. She was earning $125,000
a year, plus $50,000 worth of additional
employee benefits. XYZ has decided to
move Jennifer’s division to Manila, and
because she has a husband and three
young children in New York, Jennifer
declines an offer to move to Manila. The
claim assignment hits the adjuster’s desk.
How would the adjuster go about handling such a claim? First, it would be necessary to review the policy. Can she turn
down the transfer and still collect? Are
benefits included in the loss? Is the full
amount of wage loss covered, or just the
amounts over $50,000? Can taxes be deducted or are insurance benefits taxable?
Is job-retraining included, and if so, for
how much and for how long?
Maybe Jennifer wants to go into real estate and elects Trump University to learn
negotiation. Maybe it would be cheaper to
pay to transfer Jennifer’s family to Manila,
and if she refuses, limit her claim to that
amount of costs. Maybe M&M could find
her a similar executive position in Chicago; would the coverage pay the cost of
moving the family to Chicago? But what
if Jennifer’s job was in Birmingham, Alabama, not New York and the new job is in
Los Angeles, where comparable housing
is 500 percent or more than in Birmingham? Will the policy pay the difference?
When I first entered the insurance
business examining old deeds, mortgages
and liens for a title insurance company,
no one had ever heard of “computer insurance” or “credit default swaps.” There
was no federal flood insurance or many
other kinds of insurances with which adjusters now deal. This has always been the
case, and new coverages will constantly be
created to meet new and unusual needs.
Adjusters, if they are to avoid becoming victims of technological replacement
themselves, will need to prepare to handle
new and different types of claims.
Ken Brownlee, CPCU, is a former adjuster and
risk manager based in Atlanta, Ga. He now
authors and edits claims-adjusting textbooks.
Adjusting a Wage Insurance Claim
There is a difference between un- employment insurance (part of the New Deal’s Social Security Act)and“wageinsurance,” apparently a little-known private coverage sold by
banks and some insurers (“IncomeAssure”)
that applies to the difference between what
a worker over 50 was earning before his or
her job was eliminated by technology or
sent overseas, as long as that job had been
paying $50,000 a year or more.
The insurance money can be used to
re-train the employee for different work,
or simply pay the difference in wages, reported Robert J. Shiller in the March 13
New York Times, citing a study by Lori G.
Kletzer of Colby College and Robert E.
Latan of the Council on Foreign Relations.
As state unemployment benefits are limited, such policies can pay up to 50 percent
of a higher income worker’s prior wages
It is a form of financial guarantee insur-
ance. The insurance industry was badly
burned in the “credit default swap” cov-
erages it wrote before the sub-standard
mortgage bubble burst in 2008. The un-
employment peril (like all the social insur-
ances offered by government, including,
If (or some say “when”) such a financial
disaster strikes, it is not only going to be
the guy at the car wash who loses his job, it
will be people like adjusters and claims ex-
ecutives who will be replaced by computers
and Asian telephone answering services.
“Joe” in Bangalore may be able to take over
your computer electronically and get it to
work, but is he going to be able to settle the
claim of the pedestrian you just ran over,
who is already on his way to see a lawyer?
Social work or adjusting
Having spent many years in the field of
social work before getting into the insurance claims business, handling a “wage
insurance” claim seems, from the NYT
article, to be more in the line of social
work than claims adjusting. Suppose
Jennifer Jackson, a mid-level executive
with the XYZ Company, has purchased
a “Wage Loss” policy with M&M Indemnity Company. The limits of the policy