as loss of use, car rental, additional living
expense and business income increase by
the hour. A day’s delay increases the claim’s
value proportionately, but other types of
claims take time to develop.
While a first-call injury claim settlement
is great, most injury claims require time,
especially if the claimant is represented by
counsel. This is where procrastination is
dangerous: the adjuster waits until the attorney’s “package” is received. Ninety percent
of the time the adjuster’s claim reserve will
be grossly deficient. The adjuster must keep
pressure on the attorney for details including injuries, treatment, who is providing
it, and the prognosis. Offer to get a signed
authorization for the medical records — the
more both know, the easier the settlement.
Two of the most deadly procrastination sins involve statutes of limitations
and defaults. Tort statute of limitations
range from one to six years, with most
states having a two-year statute. But that
statute may be shorter if a governmental
agency is involved, and when subrogation
fails because the adjuster sat on a claim
and failed to file within the statute, the
insurer has lost that money forever. A few
state unfair claims practices statutes require notice of an approaching statute of
limitations to unrepresented claimants.
Defaults are just as hazardous; in most
states the time limit to answer a summons and complaint is around 20 days.
If the insured is served a lawsuit and sits
on it a week or two before notifying the
agent, the adjuster may have only days to
either get an answer filed or request an
extension. After that, the claim goes into
default and the plaintiff wins.
For procrastinating adjusters, that long
line may be the unemployment line.
Ken Brownlee, CPCU, is a former
adjuster and risk manager based
in Atlanta, Ga. He now authors and
edits claims-adjusting textbooks.
for Adjusters — Part 3
The procrastinator is the most maligned of all the ‘ators’
Woe to the procrastina- tor. The wages of sin may be death, but the wages of procrastination are
long lines. Procrastinators are maligned
“ators.” We are not nearly as critical of
profligators, proliferators, prognosticators or prevaricators. For adjusters, procrastination is a hazard.
There is a legal phrase seen in many
contracts that says, “Time is of the essence.” What is an “essence”? It has many
definitions, including a fragrance or odor.
If something sits around long enough it
will begin to stink! That was the case in
recent AT&T litigation where 18 different attorneys from two law firms failed to
file an appeal within 30 days after a jury
verdict of $40 million against their client.
Imagine the smell that caused!
But procrastination is a two-edged
sword. If procrastination is “putting it
off,” the opposite must be “
concrastina-tion,” which might be defined as acting
too quickly. This too, can be hazardous.
Psychologists suggest that chronic procrastinators are often perfectionists who
fear doing something that isn’t perfect, so
they don’t do anything.
Acting in haste
Some procrastination is necessary. Many
claims experts suggest a three-point,
24-hour contact requirement: upon assignment, contact the insured, claimant
and physician or repair facility within 24
hours. It may be a week or more after the
loss before it is even assigned to the adjuster. Contact the insured and claimant
as soon as possible, but be careful what is
said. Investigate quickly, but don’t make
any commitments without all the facts.
As to the physician, what doctor is going to tell an adjuster anything within 24
hours? Has whoever came up with this
rule never heard of HIPAA? Medical facilities don’t release information without
a signed authorization. Yes, investigate any
damage as quickly as possible, but again,
it is better not to make any commitments
until coverage and liability are investigated, evaluated and confirmed as applicable
to the claim.
Procrastination can be a killer when the
calendar is forgotten. Good adjusting requires a series of reports and status updates
at reasonable periods to make sure the
claim is progressing. Damage claims require prompt attention, since factors such