Denying Claims is Bad Business
Justin Skipton, AIC, SPPA
Vice President of the National Association of Public Insurance Adjusters (NAPIA)
Is your claims adjuster trying to find coverage for your loss or are they trying to find exclusions of coverage. This subject is at the center of every relationship between an Insurance Carrier and their Insured. What duties does the insurance company truly owe their insured when reviewing or analyzing coverage?
One of my favorite texts that describes the relationship between an insured and their claims representatives was written in 1993 in the claims adjusting training text for AIC 33 by Markham, James J. The Claims Environment. Malvern: Insurance Institute of America, 1993 print which says on page 13 paragraph 3:
“The primary duty of the claim representative is to deliver the promise to pay. Therefore, the claim representative’s chief task is to seek and find coverage, not to seek and find coverage controversies or to deny or dispute claims. Because of the personal relationship formed in an insurance transaction, the insurance company should not place its interests above the insured’s. The claims professional handling claims should honor the company’s obligations under the implied covenant of good faith and fair dealings.â€
This is one of the most powerful descriptions of what the relationship between and insured and their Insurance carrier is supposed to be. The consumer is at a disadvantage when negotiating an insurance claim as they don't have a say in what is written in the policy and most-often do not understand much of the policy. More importantly, they are relying on the insurance company to stand by their promise of coverage in the event of a loss. There are several reasons why there is an implied covenant of good faith, but that is a topic for another post.
With the goal of Good Faith claims handling in mind, searching high and low through the policy to find coverage should be the number one goal of a claims agent in every case. Unfortunately, over the past several years, our experience has been that the claims agents are moving farther and farther away from looking for coverage and more toward trying to find ways to deny coverage. Good Luck on your claims.
If you have a claims question, feel free to contact justin@skiptoninc.com or call us at 877.992.7577.
Public Adjuster _ Appraiser _ Umpire
8 å¹´Job security...
Independent Consulting Mgmt / Industry / Govt Consulting Areas / Keane NTTDATA/ FM Global
8 å¹´Krishna B. there are two sides to the coin , there are old folks in this traditional very old insurance systems in the US who think the company is not to keep on paying losses but to minimize the damages by clever going through subtle clauses etc.. I am glad to report that these are few and far apart. Not a real concern , because in personal lines especially they can shave off for any reason .. In this I hate to indulge in a very curious claim.. One cars during the winter time had a little mishap by a small some kind of pest .. it finds home in the power center where it is warm but bites through the heart , and it is disabled. Fortunately I could use the pest infest -- related destruction and our Auto Insurer paid it under the coverage-- many others have declined the claims from the repair shop who never thought I would collect and let them pay.. mind you it would be have couple of grand .. So, there are two sides to the coin. Just another example ..
Proprietor IDEA - Insurance Data Executive Assistance, Member, Board of Mentors IOV (Institution of Valuers)
8 å¹´Good to know after 39yrs. I took this stand in my initial Insurance company, where claim was repudiated under "onus of proof lies with client".. However I convinced chairman that it was an a case of loss during testing in a 'generator & is coming under EAR policy..though quantum may be negotiable.
Senior Claims Examiner @ Maxwell Claims | E.G.A.
8 å¹´Unfortunately hiring a PA does not guarantee you a better deal from your insurer as some of them are as lacking in a grasp of policy language. After 42 years adjusting I've come to the conclusion that properly trained adjusters are a rare commodity on both sides of the fence. Insurers skip on training and licensing is a joke. An insured should be entitled to be serviced by a competent claims professional capable of delivering on the promise of fair indemnity for a loss. Sadly today that is definitely not guaranteed.
Public Adjusters - Proudly Serving Texas - ASSURANCE CLAIMS SERVICE CO TDI license # 2159730
8 å¹´Another great article Justin and sadly to say it's a concept many claims adjuster have a problem grasping.