Claims Commandment V — Thou Shall Communicate With the Insured
Video at https://youtu.be/I–ZuJ-RBSA
The key to resolving insurance claims amicably is constant and substantive communication between the insured and the adjuster. Communication about the claim on a regular basis allows the insured and the adjuster to build rapport.
Building rapport is a fundamental aspect of human communication. Being able to build rapport could be viewed as a basic element of social intelligence. The professional should first spend time establishing rapport and the confidence of the person being interviewed. there are four elements of building rapport.
States, by Regulation, also require regular communication and will punish the insurer if the adjuster fails to communicate.
The Regulations set minimum, not maximum, standards. Adjusters should, and are expected to, exceed the minimum standards set by the Regulations. Insurers now find — in bad faith litigation — that trial lawyers will posit violation of the minimum standards set by the regulations as evidence of bad faith sufficient to allow a trier of fact to assess tort damages against the insurer. Since the Regulations are stated to be minimum claims handling standards, failure to comply will give a judge or jury the opportunity to contend that the failure to comply is evidence of tortious conduct sufficient to support a claim that the insurer committed the tort of bad faith.
The adjuster must be familiar with the Regulations in his or her state with regard to communications to the insured and work to exceed the requirements. The minimum standards set by the various states are just that: minimums. The adjuster who establishes and maintains rapport with the insured will resolve more claims quickly and without difficulty and will never face the wrath of a supervisor or auditor from the state.
The adjuster that fails to communicate regularly and substantively will have difficulty reaching agreement with the insured.
Claims Commandment VI — Thou Shall Document The Claims File
Most insurance regulators require that every insurer maintain claim files that are subject to examination by the regulator or by his or her duly appointed designees. The regulator requires that the claim files must contain all documents, notes and work papers (including copies of all correspondence) which reasonably pertain to each claim in such detail that pertinent events and the dates of the events can be reconstructed and the insurer’s actions pertaining to the claim can be determined. Similarly, insurance company management needs the same ability to determine that the claims people are doing what they expect to be done to keep the promises made by the insurance policy.
In simple language everything the claims person does should be recorded in the claims file whether kept in a computerized system or a paper file. Every document collected, every photograph taken, every video recorded, every letter written, every e-mail sent, notes of every telephone conversation, should be in the claims file. Every comment and note made in a claims file should be written as if it were addressed to “Dear Commissioner” or Dear Ladies and Gentlemen of the Jury.”
The information in the claims file must be maintained so that the claim data are accessible, legible and retrievable for examination so that an insurer shall be able to provide the claim number, line of coverage, date of loss and date of payment of the claim, date of acceptance, denial or date closed without payment. This data must be available for all open and closed files for the current year and for, at least, the four preceding years.
If the insurer uses computer generated e-mail and logging the computer should be programmed to record the date and time of each entry in such a manner that the claims person cannot modify or change the dates of any entry. All e-mail communications must be saved for up to five years in a searchable database or in connection with the electronic claims file.
All electronic records must be kept in such a manner that would allow a complete copy of the electronically recorded record to be printed out in full so that it is available to produce to the regulator or the insurer’s supervisory personnel or in discovery if litigation occurs.
The key for the claims person is, if in doubt about putting information into a claim file, always put the information in and never fail to record actions that relate in any substantial way to the file, the adjustment of the claim or the investigation conducted by the claims person.
© 2020 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.
Go to Zalma on Insurance on YouTube – https://www.youtube.com/channel/UCFg7qxC0tVgKcMUqoUfnwPw
Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/