For an insurance company and its representatives to be ethical, they must believe in and practice integrity and the principle of indemnification.
That’s what insurance is about: restoring
to wholeness the first- or third-party per-son(s) who have suffered loss that is covered within the policy contract, or owed
under the law. Doing that requires both
initiative and imagination. When faced
with a new and difficult kind of claim, a
good adjuster will be excited to solve it and
prepared to delve into the facts of the loss.
I recall my first explosion claim which
involved an insured contractor building a dock in the Florida Keys, who had
blasted away a mass of coral rock in order
to build a side to the jetty. A little over a
quarter of a mile away was a condominium, and all the residents were claiming
cracks in their foundations and walls
from the blasting.
A little booklet in the office on explo-
Finding an expert
sions said that real blast damage was sup-
posed to have a “shattered” appearance,
with little hairline cracks running in vari-
ous directions. Settlement cracks were dif-
ferent — they tended to follow the inside
framing of the structure. On first inspec-
tion, these cracks did not fit the pattern
for blast damage, and they did not appear
new. Litigation was being threatened, and
the hard-headed Yankees who owned the
units and ran the association were not
about to take “No!” for an answer.
There was no internet then, just phone
books. (For readers under 25, those are big,
thick yellow books with everyone’s address
and phone number in it.) Asking around, I
finally found a vibration engineer.
We met, and he gave me a long list of
information he would need: the exact
distance from the blast site to the condominium, what the ground beneath the
soil between the two comprised, (it was
coral rock covered with half a foot of
sand, with top soil above it) and the velocity of each shot made by the contractor, plus the exact formula of the material
used in each blast.
He even wanted to know the weather
and exact temperature at the time of the
blasts. I called the insured, met with him
at the dock, and took the longest recorded
statement I’d ever taken. Transcribed, it
was at least 15 pages.
A few days later I met with the engineer and we went over the statement and
examined, photographed and measured
the cracks. He showed me some physics
formula, which I copied and put in my
report to the insurer. In short, the cracks
were not “blast damage,” and we would
be able to prove it in court. We then met
with the condominium association president, presented our evidence, and denied
his claim. He was unhappy, but no lawsuit
was ever filed.
The value of investigation
Not every claim is a “fender bender”
or “stolen bicycle,” although there are
enough of those. An adjuster has to
follow what Rudyard Kipling said was
the motto of the mongoose: “Go, and
On serious claims one does more than
just get a police or fire department report;
investigation requires getting the photos,
the autopsies, the full description of the
stolen items, plus whatever information
is needed. An adjuster must be a sleuth,
digging like a character in a Damon Run-
yon detective story to find the truth of
each claim. It can’t easily be done from
behind a computer screen.
Adjusting claims is one of the most
exciting and enjoyable professional vocations anyone can find. But it requires a
commitment of ingenuity and the use of
imagination to do the job correctly and
reach the right solution. Curiosity may, as
the saying goes, “kill the cat,” but a lack
of it will certainly kill the professional adjuster’s job.
Ken Brownlee, CPCU, is a former
adjuster and risk manager based in
Atlanta, Ga. He now authors and edits
claims-adjusting textbooks. Opinions
expressed are the author’s.
Curiosity and the Ferret
Editor’s Note: this is the final article in a six-part series on adjuster ethics.