The Claims Loop

Nerves start to get rattled for an insurer if they are not able to capture what is involved financially with a claim.
“When you get those really odd claims, coverage issues are a really big issue,” said Sharon Clark, casualty claim manager with CAA Insurance Company.

Clark was speaking at the education forum during the Canadian Independent Adjusters’ Association’s (CIAA) annual general meeting in Muskoka, Ont. on Aug. 26, 2011.

Insurance companies immediately need a cost estimate on a claim so they are better able to plan.

For the run of the mill claim, most independent adjusters send in a little fact sheet via email or mail, which is perfectly fine, Clark said. But, for more complicated claims – or ones where there is suspected fraud – the information that an adjuster sends in is extremely important because it provides the insurer the opportunity to very quickly capture the essence of the claim and know what its exposures are, she added.

What to note

Issues that should be addressed:

• Are there any policy violations?

• Are there any exclusions?    

• Is there adequate insurance?

• Is there a co-insurance issue?

• Is the insurer actually insuring what it believes it is insuring?

• What are the insurer’s exposures?

• What are the facts of the loss?

• Who are the other parties?
• Is the insurer exposed to liability?

• What are the damages?
• Is there a priority dispute in the case of an accident benefits claim?

• Is it a loss transfer?

• Are there other accident benefits claimants?

• Are there subrogation possibilities?

• Is there mitigation to be dealt with?

• Do goods need to be protected from further damage?

• Do additional living arrangements need to be made?
• Does a case worker need to be assigned in the event of an accident benefits claim?

• Is there a suspicion of fraud?

• Is there a social media nightmare brewing?

“It sounds like a lot, but it’s amazing what you can cover off pretty quickly,” Clark said. “If you are starting to get that gut instinct, or something specific has come up and you go, ‘Wow, this is a serious loss’ or you’ve got one those problems described, great idea to just pick up the phone [and call the insurer].”

Service standards

In many cases, an insurer simply wants to guarantee that its service standards are being met, said Mark Stewardson, claims manager, property/casualty subrogation with RSA. In some instances, the claim originates directly within the organization and in-house adjusters are held accountable to the company’s initial service standards. However, in instances where the claim is assigned from the broker to an independent adjuster, the insurer needs to know immediately who is working on the claim. “If we don’t have the information up front, it looks pretty bad on an insurance company when we don’t know who was assigned in the individual office and what initial promise was made,” he said. “Immediately try and give feedback to the insurance company as to who is handling the claim and what your initial plan is by way of services standards and contact.”

He went on to note that in his company, there are financial implications if service standards are not met. Deductibles and other dollar values are put back in the pocket of the insured if these standards are not met. Through customer surveys, the company has learned that for the insured, the initial contact is the most important; it is the peace of mind that somebody is listening and has answered that initial concern as to what’s involved in the process. “As long as you transfer that information to [the insurer] to put our minds at ease, so we know if a problem exists, we know exactly how to act upon it” Stewardson said. “It’s that basic information given to us, so we are all communicating on the same page right out of the gate.”

The broker

Part of that essential communication is keeping the broker in the loop. “It’s really helpful for the brokers to know very early on that there is something going on,” said Justin MacGregor, chairman of the Insurance Brokers Association of Canada said. “I have seen countless situations where it’s days before the brokers knows that a customer of his has had a problem or even had a claim. That’s not a good reflection of us or any service provider.”

Make sure the broker is in the loop; at the end of the day, it’s the broker’s customer, he said. By speaking to the broker, the adjuster can learn what the business approach is for that broker with respect to their clients. This includes what the obligations are in the event of a claim. “The sooner the broker is aware, the sooner they are able to start answering a lot of those questions that an insured is going to have,” MacGregor said. The broker needs the opportunity to speak with the insured to explain the process and who will be involved in the claims handling. “We don’t need to know a huge amount, because obviously if we’ve got a relationship with the client, that’s who we are going to go and talk to,” he added. What the broker does need to know is that the promise the broker has sold – the policy – is being upheld. “We get to realize that the insurance company is going to provide the benefit to the insured,” MacGregor said. “We want to see that that happens in an effective manner.” The broker will not take over, but they do need to be in the loop to act as an advocate for their client as required.

Communication

For Bob Grouchy, avp at Allianz Global, that initial phone to the client – immediately upon receipt of the claim – is key. “You are going to state that you’ve done that,” he said. “Or you are going to state that you’ve tried, because there’s nothing worse than a client sitting there who doesn’t know what he is doing and waiting.”

Send that notice to both the insurer and the broker and include the cell number of the adjuster. Those involved must be able to reach adjuster. “One of the things that I advocate, and this came out of one of the conferences some years back, is that when the adjuster does the initial meeting with the client, he says who he is acting for, writes it on a piece of paper and gives it to [the insured],” Grouchy said. The insurance company the adjuster is representing, the claim number and the contact information should be included so that the insured has a contact base. Follow that up with the steps that will take place throughout the claim, so that the client is informed.

With respect to passing information along to the insurance company – Grouchy says letting the insurer know that you have been on scene or spoken to the insured and indicate whether it is a major or a minor loss. Advise the insurer that you will have more information as to the nature of the loss within seven days.

Contact with the insured must be made as early as three hours after the loss (ideal) up to 24 hours after a loss (on the outside), Grouchy says, adding it would be ideal if an adjuster made in-person contact with the insured within three hours, but does realize that is not always possible. “I want you out there as promptly as you can,” he said. “That’s what I am paying you for. You are my eyes and you are going to hear what’s going on.” And he definitely wants something substantial wi
thin seven days. With all the blanks that need to be filled in, the insurer needs to know a ballpark figure for the claim. “Do not hesitate to pick up the phone and call the company if you sense there’s an issue or there’s a problem,” Grouchy said. “If you’ve got some concerns or there’s some delays . . . let us know.”