Reader's Digest - When Your Insurance Won't Pay
By Kimberly Lankford
From KIPLINGER'S PERSONAL FINANCE MAGAZINE
When the firetrucks arrived, Howard Green of Valparaiso, Ind., was atop his house with a garden hose, trying to keep the roof from igniting. He had accidentally set the chimney on fire while attempting to remove a beehive, and the second floor was in flames.
The next day, Green says, his State Farm insurance agent delivered a $5000 check. Green and his wife began to inventory the debris – 40 bags of "smelly, smoke-laden stuff" and burnt mattresses.
Seven months after the September 1997 fire, the bags were still in the garage and the Greens were still sleeping in the dining room. While State Farm had paid $75,000 for structural damage, it still hadn't paid the $70,000 claim to replace the destroyed contents. A company adjuster who disagreed with the Greens' adjuster, grilled them on the value of their damaged possessions. Then, during a six-hour interview under oath, a State Farm attorney required them to defend their claims in the value of nearly every shirt, suit and pair of shoes. Fortunately in many cases they still had the receipts.
A few weeks after the interview, State Farm still hadn't paid the bulk of the contents claim. The Greens' attorney then sent a letter threatening a lawsuit. About a week before the deadline set by the attorney – 11 months after the fire – State Farm sent a $48,000 check. Another check arrived a few weeks later, bringing the total close to the disputed amount. "They owed me $70,000 on my contents for 11 months," says Green, a State Farm policyholder for 30 years. "Did they earn interest on the money?" State Farm wouldn't comment on the specifics of the Greens' case, but spokesman Edward Domansky said, "We only regret that the contents portion of the claim took longer than either State Farm or our policyholder would have liked."
Together, State Farm and Allstate own a third of the homeowners- and auto-insurance markets. In 1999 the State Farm group of companies earned net income of more than $1 billion; the Allstate Insurance group netted $2.7 billion. Both companies have better-than-average homeowners complaint rations – the best measure of policyholder satisfaction – with state Farm ranking second in a recent survey. Still, a 1998 report by Legg Mason, an independent financial advisory company, showed how profitable it can be to put the squeeze on claims, which typically account for some three-fourths of an insurance company's expenses. "It seems that a lot of insurance companies intentionally drag their feet, hoping the insured will say Œgive me anything and I'll walk away'," says Gregory Geelan, a San Diego Lawyer who has handled many bad-faith claims.
Here's how to avoid a prolonged battle with a slow-moving insurer:
Shop Around. Companies look at claims as either an area to save money or an opportunity to provide superior service to gain loyalty," says Charles Brown, an independent insurance agent in Kennett, Mo. "It might be worth an extra $50 in premiums each year to go with a company that makes it its business to pay the claim and make it as easy as possible."
Where do you find such companies? Learn which insurers have the fewest policyholder complaints lodged against them. Contact your state insurance department (check the blue pages in the phone book or the website of the National Association of Insurance Commissioners, www.naic.org) and ask for a list of complaint ratios for all the insurers licensed in your state. Inquire whether the department has taken any enforcement actions against an insurer.
As you shop around for a policy, ask independent agents – who can represent several insurers – which companies serving your area are known for hassle-free claims. If they're unhappy with a company, independents often send their clients elsewhere. "We've pulled our clients from a particular company because we didn't like the way they handled claims," says Ann Martin-Grimm, an independent agent in Lewiston, Idaho.
Before your purchase a policy, be sure you know what it covers. If anything in unclear, ask your agent for an answer in writing. After you sign up, inventory your possessions and keep receipts. "Go through the house with a video camera," Brown recommends. "Open closets, cabinets and drawers and describe the items, where you bought them and how much they cost." Then store the video outside your house. And in case you need to document an auto claim, keep a disposable camera in your car.
Stake Your Claim. Ivan Culbertson's Jeep Cherokee was totaled on an Oregan road when he was hit head-on in October 1998. Rescuers pried him out of his car and rushed him to the hospital. The medical bills exceeded $16,000. The police found the other driver at fault, but that person's insurer, a small, high-risk company, denied Culbertson's claim. Saying that their customer said Culbertson was at fault. It was only with the help of a state insurance investigator that Culbertson collected the full amount.
As Culbertson's case illustrates, you may have to deal with an insurer you'd never choose yourself. Some tips on how to fight for a fair settlement: ? Report a claim quickly, and don't fix or clean up the damage until you contact your insurance company. Save police reports, receipts for major items and living expenses, and anything else that supports your claim.
Ask about deadlines – yours and the company's – and heed the stature of limitations. In many states you can't sue an insurance company more than one year after a claim is filed.
Document all phone calls and letters (certified receipts always help). "Get in writing from the company why they're denying a claim," says Robert Hunter of the Consumer Federation of America. "Once they've told you the reason, they can't come up with a new reason."
Do research to build your case. If you and the company disagree on your car's value, for example, check a used-car pricing guide (like the Kelley Blue Book, at kbb.com) or call some dealers and report your findings to the adjuster.
Pester the company if the claims process stalls. Start with the adjuster and work your way up to the president , if necessary.
Hire your own contractor or adjuster if you think the company's estimate is too low. While a contractor's estimate can help when the dispute is over the cost of repairs, an adjuster can help you submit and document claims and be your advocate when you and your insurer disagree over what your policy covers. (Get a referral for an adjuster through the National Association of Public Insurance Adjusters, at napia.com)
Hire a lawyer to assist you if you're asked to give a statement under oath. People go it alone because "they know they're not guilty and want to cooperate," says the Greens' lawyer, Tim Kelly. But many unwittingly say something that ends up hurting their case, he ads.
Avoid signing anything that releases the insurance company from further obligation. For example, it might take months before you realize that an earthquake has damaged your house's foundation.
Sue an insurer only as a last resort. Unless you have a bad-faith case – in which you could get your legal expenses paid and possible receive punitive damages in addition to the amount of your claim – your costs will probably leave you in the red even if you win. So before you go this route, contact your state's insurance department for assistance. If your dispute involves just a few thousand dollars, try small claims court.
REPRINTED FROM THE JULY 2000 ISSUE OF READER¹ DIGEST C 2000 THE READER¹S DIGEST ASSOCIATION, INC., PLEASANTVILLE, N.Y. 10570 PRINTED IN THE U.S.A.
This reprint does not constitute an endorsement, implied or otherwise, by Reader¹s Digest. It may not be reprinted by anyone other than Reader¹s Digest or used in any way for advertising or promotional purposes without prior written permission of Reader¹s Digest. The reprint may not be sold by anyone other than Reader¹s Digest and no message, with the exception of the donor¹s name may be imprinted on it.
Reader¹s Digest, The Digest and the Pegasus logo are registered trademarks of The Reader¹s Digest Association, Inc.
Reader's Digest - When Your Insurance Won't Pay
By Kimberly Lankford
From KIPLINGER'S PERSONAL FINANCE MAGAZINE
When the firetrucks arrived, Howard Green of Valparaiso, Ind., was atop his house with a garden hose, trying to keep the roof from igniting. He had accidentally set the chimney on fire while attempting to remove a beehive, and the second floor was in flames.
The next day, Green says, his State Farm insurance agent delivered a $5000 check. Green and his wife began to inventory the debris – 40 bags of "smelly, smoke-laden stuff" and burnt mattresses.
Seven months after the September 1997 fire, the bags were still in the garage and the Greens were still sleeping in the dining room. While State Farm had paid $75,000 for structural damage, it still hadn't paid the $70,000 claim to replace the destroyed contents. A company adjuster who disagreed with the Greens' adjuster, grilled them on the value of their damaged possessions. Then, during a six-hour interview under oath, a State Farm attorney required them to defend their claims in the value of nearly every shirt, suit and pair of shoes. Fortunately in many cases they still had the receipts.
A few weeks after the interview, State Farm still hadn't paid the bulk of the contents claim. The Greens' attorney then sent a letter threatening a lawsuit. About a week before the deadline set by the attorney – 11 months after the fire – State Farm sent a $48,000 check. Another check arrived a few weeks later, bringing the total close to the disputed amount. "They owed me $70,000 on my contents for 11 months," says Green, a State Farm policyholder for 30 years. "Did they earn interest on the money?" State Farm wouldn't comment on the specifics of the Greens' case, but spokesman Edward Domansky said, "We only regret that the contents portion of the claim took longer than either State Farm or our policyholder would have liked."
Together, State Farm and Allstate own a third of the homeowners- and auto-insurance markets. In 1999 the State Farm group of companies earned net income of more than $1 billion; the Allstate Insurance group netted $2.7 billion. Both companies have better-than-average homeowners complaint rations – the best measure of policyholder satisfaction – with state Farm ranking second in a recent survey. Still, a 1998 report by Legg Mason, an independent financial advisory company, showed how profitable it can be to put the squeeze on claims, which typically account for some three-fourths of an insurance company's expenses. "It seems that a lot of insurance companies intentionally drag their feet, hoping the insured will say Œgive me anything and I'll walk away'," says Gregory Geelan, a San Diego Lawyer who has handled many bad-faith claims.
Here's how to avoid a prolonged battle with a slow-moving insurer:
Shop Around. Companies look at claims as either an area to save money or an opportunity to provide superior service to gain loyalty," says Charles Brown, an independent insurance agent in Kennett, Mo. "It might be worth an extra $50 in premiums each year to go with a company that makes it its business to pay the claim and make it as easy as possible."
Where do you find such companies? Learn which insurers have the fewest policyholder complaints lodged against them. Contact your state insurance department (check the blue pages in the phone book or the website of the National Association of Insurance Commissioners, www.naic.org) and ask for a list of complaint ratios for all the insurers licensed in your state. Inquire whether the department has taken any enforcement actions against an insurer.
As you shop around for a policy, ask independent agents – who can represent several insurers – which companies serving your area are known for hassle-free claims. If they're unhappy with a company, independents often send their clients elsewhere. "We've pulled our clients from a particular company because we didn't like the way they handled claims," says Ann Martin-Grimm, an independent agent in Lewiston, Idaho.
Before your purchase a policy, be sure you know what it covers. If anything in unclear, ask your agent for an answer in writing. After you sign up, inventory your possessions and keep receipts. "Go through the house with a video camera," Brown recommends. "Open closets, cabinets and drawers and describe the items, where you bought them and how much they cost." Then store the video outside your house. And in case you need to document an auto claim, keep a disposable camera in your car.
Stake Your Claim. Ivan Culbertson's Jeep Cherokee was totaled on an Oregan road when he was hit head-on in October 1998. Rescuers pried him out of his car and rushed him to the hospital. The medical bills exceeded $16,000. The police found the other driver at fault, but that person's insurer, a small, high-risk company, denied Culbertson's claim. Saying that their customer said Culbertson was at fault. It was only with the help of a state insurance investigator that Culbertson collected the full amount.
As Culbertson's case illustrates, you may have to deal with an insurer you'd never choose yourself. Some tips on how to fight for a fair settlement: ? Report a claim quickly, and don't fix or clean up the damage until you contact your insurance company. Save police reports, receipts for major items and living expenses, and anything else that supports your claim.
Ask about deadlines – yours and the company's – and heed the stature of limitations. In many states you can't sue an insurance company more than one year after a claim is filed.
Document all phone calls and letters (certified receipts always help). "Get in writing from the company why they're denying a claim," says Robert Hunter of the Consumer Federation of America. "Once they've told you the reason, they can't come up with a new reason."
Do research to build your case. If you and the company disagree on your car's value, for example, check a used-car pricing guide (like the Kelley Blue Book, at kbb.com) or call some dealers and report your findings to the adjuster.
Pester the company if the claims process stalls. Start with the adjuster and work your way up to the president , if necessary.
Hire your own contractor or adjuster if you think the company's estimate is too low. While a contractor's estimate can help when the dispute is over the cost of repairs, an adjuster can help you submit and document claims and be your advocate when you and your insurer disagree over what your policy covers. (Get a referral for an adjuster through the National Association of Public Insurance Adjusters, at napia.com)
Hire a lawyer to assist you if you're asked to give a statement under oath. People go it alone because "they know they're not guilty and want to cooperate," says the Greens' lawyer, Tim Kelly. But many unwittingly say something that ends up hurting their case, he ads.
Avoid signing anything that releases the insurance company from further obligation. For example, it might take months before you realize that an earthquake has damaged your house's foundation.
Sue an insurer only as a last resort. Unless you have a bad-faith case – in which you could get your legal expenses paid and possible receive punitive damages in addition to the amount of your claim – your costs will probably leave you in the red even if you win. So before you go this route, contact your state's insurance department for assistance. If your dispute involves just a few thousand dollars, try small claims court.
REPRINTED FROM THE JULY 2000 ISSUE OF READER¹ DIGEST C 2000 THE READER¹S DIGEST ASSOCIATION, INC., PLEASANTVILLE, N.Y. 10570 PRINTED IN THE U.S.A.
This reprint does not constitute an endorsement, implied or otherwise, by Reader¹s Digest. It may not be reprinted by anyone other than Reader¹s Digest or used in any way for advertising or promotional purposes without prior written permission of Reader¹s Digest. The reprint may not be sold by anyone other than Reader¹s Digest and no message, with the exception of the donor¹s name may be imprinted on it.
Reader¹s Digest, The Digest and the Pegasus logo are registered trademarks of The Reader¹s Digest Association, Inc.
Insurance Claim Help
by Juan Hovey
A disaster attracts a crowd. When the disaster strikes a business, it¹s often a crowd of public insurance adjusters, and they can get in the way of getting back in business. But a good public insurance adjuster can prove to be a valuable ally.
How? A big claim can put you at loggerheads with your insurer; you must prove your loss, and you and your insurer may disagree over the extent of your coverage. In a worst-case scenario, the fight can drag you into court-at the worst possible time for you.
To avoid this, many business owners hire public insurance adjusters to handle big claims. Although few insurers like to see them in the picture, they benefit the business owner in two ways:
They do the haggling with the insurer, freeing the business owner to concentrate on getting back to work.
Often they get a bigger settlement out of the insurer.
Few owners understand their own insurance coverage, and this puts them at a disadvantage in a disaster, particularly if they carry complex coverage like business interruption insurance, which replaces profits lost to a mishap like a fire.
Example: a clothing retailer¹s spring line goes up in flames. Figuring the value of the lost goods is easy; you total up what they cost and submit the claim under your fire insurance policy. Figuring the lost profits, is more difficult. In retailing, you never know what will set and what won¹t. A solid public insurance adjuster who understands your coverage and claims process can speed a settlement by reconstructing your profits over the last three to five years.
Public adjusters work on contingency fees ranging downward as the claims goes up; you can expect to pay 10 percent, sometimes more, for claims under $100,000. A good public adjuster can pay for the contingency fee by negotiating a bigger settlement than you¹d get on your own.
Find a good public insurance adjuster by asking attorney, accountant, lender and even you insurance agent. Interview these people carefully, probing their experience in settling claims like yours. Check references. Choose one who inspires your confidence and treat him or her as a partner in overcoming the difficulties of getting your business back on its feet.
The Public Adjuster
By ROBERTA WELLS - Press BusinessWriter
from the Asbury Park Press, Sunday, January 31, 1993
Thanks to last month's nor'easter, more people are giving more thought to what is covered by their homeowners and business insurance.
But few people go so far as to read their policies - which are actually contracts - and even fewer fully comprehend them. Enter the public insurance adjuster.
You say you've never heard of a public adjuster?
Then you are among the fortunate who have never suffered fire, flood, riot or wind-storm loss. It's been estimated that about $3 billion in insurance claims are filed each year in New Jersey with the help of public adjusters. Many people swear by them, while others swear at them.
Unlike insurance company adjuster, whose primary allegiance is naturally, with their firm, public adjusters work exclusively for the insured who have suffered losses. In exchange, public adjusters receive an average of 10 percent of the settlements they negotiate.
At their best, public adjusters are insurance professionals working to get their clients every penny they are legitimately entitled to following a loss. At their worst, they are opportunistic scam artists who descend on potential victims at their most vulnerable, misrepresenting their expertise, or perpetrating insurance fraud.
Following last month's nor'easter, the Federal Emergency Management Agency warned storm victims to make sure they knew exactly how much a public adjuster would charge before signing a contract. FEMA issued the advisory after receiving complaints that some adjusters were not making it clear how much their fees would be or how they would be collected. Fees can run as high as 15 to 20 percent of the settlement claim, officials said, noting that FEMA's National Flood Insurance Program provides adjusters at no fee to inspect sites and help victims file claims.
Consumers who hire public adjusters do so at their own risk. That's because New Jersey is on of only four states in the country that doesn't regulate public adjusters. "Every state (except New Jersey) east of the Mississippi has a statute," said Michael F. Chazkel, an East Brunswick Township lawyer who represents the New Jersey Association of Public Insurance Adjusters.
"It doesn't make sense not to. When there is catastrophe like we just had, we have adjusters coming in from other states, even some known felons who have lost their licenses."
Although there is state legislation pending to regulate the industry, consumers are on their own for now. Public adjusters maintain that their services will not only get a claim resolved faster, but that the settlement will be larger by at least the amount of their fee.
Public insurance adjuster Leslie L. Knox, president of Andrew K. Knox & Co., Toms River, said consumers can also benefit because adjusters understand insurance law and the complexities and nuances of insurance policies.
"With insurance law, the burden of proof is on you," he said. "They (insurance companies) are not simply going to say, 'Sorry, here's a check for $100,000.' "
So, what, exactly, do public adjusters do?
Knox explains that every loss has three aspects: building damage, personal or business property loss, and loss of use.
"We prove item by item, stick by stick, stud by stud, what was lost, down to the last pair of socks and stuffed animal," he said. "You can get a contractor to give you an estimate, but he will not be familiar with insurance policy forma and endorsements. I've seen those estimates: 'Repair fire damages house, $30,000.'
"
After a building and property inventory of damage is completed, Knox uses a computer software program designed to prepare claim reports. Every item of property and its replacement value are listed, along with a breakdown by trade: plumbing, electrical, framing, etc. This helps minimize the amount of depreciation deducted from the claim by the insurance company, he explained.
As part of its fee, the firm will also review contracting bids and testify in court as an expert witness should it come to that unlikely end.
As an example, he cites an ongoing claim from the recent nor'easter:
According to Knox, a tenant in a Point Pleasant Beach boardwalk pizza stand named Pizza Plus had his business devastated when the roof blew off, flipped over and landed 10 feet away. Then the front wall fell in, crushing the equipment, including expensive ovens.
The claim for property loss was denied by the out-of-state insurance firm. The company contends the damage was caused not by wind but by flood, which is not covered under the owner's policy.
It's a blatant error on the company's part," insisted Knox. "A flood did not rip the roof off or crush the ovens. It was obviously a funnel of wind that came down the boardwalk."
While preparing his client for the possibility of litigation, Knox said he's trying to settle the claim before it goes to court.
The relationship between public adjusters and the insurance industry is not always a smooth one.
"Obviously, the insurance companies don't like the public adjusters because they get the insured a lot more on their claim," sail Paul L. Cordish, a lawyer for the 700-member National Association of Public Insurance Adjusters. "The less they pay on claims, the more they profit. But company adjusters often prefer to deal with public adjusters because they know what they're doing."
But for the record, at least, insurance industry representatives acknowledge the legitimacy of public adjusters.
"Public adjusters are a need group," said Loretta L. Worters, a spokeswoman for the Insurance Information Institute, an organization that provides information to the media on behalf of the insurance industry.
"Take Hurricane Andrew, for example," she said. "There was a huge demand for claims processors…There are good and bad in any group of people, but on the whole, they are beneficial to the industry."
"The average insured who has a fire, flood or wind loss, to him it's a calamity," he said. "It's very emotional. If there ever was someone who needed expert help, it's the insured who suffered a loss. For him to depend on the company adjuster to look out for his interest its foolish."
Julian A. Radossich, president of Allied Insurance Adjusters Inc., Somerville, is also critical of the insurance industry.
"They turn around and treat the insured like criminals because they have public adjusters," he said. "They (the insured) have a right to be represented. It's just like having an attorney represent you in court. You're not equipped to deal with the company adjusters. These people are trained to save their company money' that's what they do."
Apart from the debate over whether public insurance adjusters are needed to settle claims is concern over possible abuse by some public adjusters. Last week, the state Legislature passed the Public Adjuster's Bill (S-908, A-1548) which is in the process of being reviewed by the Florio administration.
Legitimate public adjusters want to be licensed according to Chazkel of the New Jersey Public Insurance Adjusters Association.
"We are in our 17th year of trying to get a licensing bill," he said, "We have gotten to this point two prior occasions under two different administrations, and it was rejected for technical reasons each time.
If the bill becomes law, public adjusters will be under the supervision of the state Department of Insurance. They will have to must post a bond, pass a written test, a criminal background check and adhere to a standard of behavior - such as not arriving at a fire scene in the middle of the night and haranguing the owner into signing a contract on the spot. It gives the insurance commissioner the power to levy fines and take other disciplinary action against offenders.
"I have seen some pretty significant problems with builders and electricians professing to be insurance adjusters to get the work and now knowing what they are doing," Chazkel said. "The insured has really been hurt."
Although some states have a set 15 percent fee cap, the proposed bill does not regulate fees, Chazkel said, under the assumption that competition will provide fair fees.
Chazkel claims the measure would generate tax dollars for New Jersey by tax dollars for New Jersey by taxing the work of adjusters from neighboring states who are now taxed only in their home state.
The state Department of Insurance, though, has some reservations about the bill in its present form, said Peter Cammarano, department spokesperson.
"Our main concern is that is lacks adequate consumer protection," hew explained. It doesn't provide for a 72-hour period during which the client can revoke the contract, not does it ban referral fees, he explained.
"We are also concerned with some of the administrative aspects," said Cammarano. "We want the commissioner to have the authority to revoke or suspend license for up to five years, instead of one. And the penalties (for first and subsequent offense, respectively) should be $5,000 and $10,000 instead of $2,000 and $5,000."
Without a licensing procedure in place, Cammarano suggests consumers look for other credentials such as member ship in the National Association of Public Insurance Adjusters. Members must have experience to join and also pass examinations o three different levels. They also subscribe to a code of ethics.
Tips to deal with public adjusters
To avoid problems, here are some questions to ask before hiring a public adjuster:
Are you licensed in another state? At this time New Jersey does not regulate the industry. But many of the top firms are licensed in neighboring states.
Are you bonded and insured?
How long have you been in business?
Where are your offices located and what is the size of your staff:
Do you contract out your work?
If so, with whom?
What is your fee?
Average industry fees are 10 percent of a settlement payable when the claim is paid by the insurance company. If a claim is not paid, an adjuster is not paid. Beware of any significantly higher or lower, or anyone asking for money up front.
Exactly what services are provided for that fee?
Do you charge extra, for example, if you testify for me in court as an expert witness or review my contracting bids?
Some more advice to keep in mind:
To avoid problems, here are some questions to ask before hiring a public adjuster:
Take a good look at the business card to see if it clearly shows the National Association of Public Insurance Adjusters seal (NAPIA). If this is illegible, thing again. Unscrupulous adjusters have been known to deliberately smudge phony seals to give the impression they are a member of the organization. To be certified by the national association an adjuster must pass an examination.
Do not deal with anyone who asks you to sign any type of "authorization" at the scene for them to: review your policy; board up your house; speak to your insurance agent, etc. If you look closely you will notice these so-called authorizations are really contracts in disguise.
Don't be fooled by company names such as, "Allstate Adjusters," or adjusters who appear at the scene announcing: Your agent sent me. Legitimate adjusters have no connection with insurance companies
It probably pays to avoid adjusters affiliated with the building industry because of the potential conflict of interest. Although there is some disagreement, it is considered unethical and improper by the NAPIA for an adjuster to be involved in any with the reconstruction. They believe public adjusters should not even recommend a builder if asked by the insured. Instead, they can provide a list of builders used by previous satisfied clients
Never deal with anyone whose address is a post office box.
The Role Of Public Adjusters
By Ron Gillmeister
from Claims, November, 2000
SACRAMENTO, CALIF. -- The Claims Conference of Northern California continued its outstanding track record of quality educational seminars at this year's event, staged Sept. 14 & 15 here at the Radisson Hotel and Conference Center. More than 250 company claims executives, adjusters, attorneys and self-insureds go the latest word in 12 separate sessions on property and casualty adjusting, medical developments and case law updates, including defending against public adjuster activities, obtaining big dollars in comparative negligence counter claims and discovering some insight in settlement conference activities.
Dawn Dawson, a vendor with CSAA Insurance in Sacramento, and Bernard Sarmiento, vice president of Gregory B. Bragg & Associates in Roseville, Calif., served as president and vice president, respectively, of the 2000 conference.
The role of the professional public adjuster is to assist staff and independent adjusters in the resolution of the claim, according to Randy Goodman, SPPA, with Greenspan Co./Adjusters International, based in San Francisco, Joining Paul Hamilton, a Santa Rosa-based property and casualty claim consultant, Goodman pointed out that PA's job also entailed "keeping emotion out of the loss."
Hamilton played the devil's advocate in the exchange and said PA's can be "overly aggressive." Goodman admitted there are "some bad apples" on his side of the industry, but that the true PA professional is an asset to the insured and the claim process. "Both sides are entitled to representation," he stated; without a PA, the insured can be "out-gunned" by the insurance carrier's claim team. "We level the playing field," he added.
Public adjusters can speed the loss process by coordinating immediate repairs as well as providing an inventory of the loss. Goodman said that he sometimes does a joint inventory with carrier representatives. Another important role of the PA is to educate the insured as to the conditions of the insurance policy, especially with so many different contacts and conditions being manuscripted today.
In many cases Pas shield the insured from the company, Hamilton said, but Goodman said that he does not subscribe to that practice.
All but seven states currently license public adjusters, according to the Greenspan executive. As members of the National Association of Public Insurance Adjusters, he said that his firm adheres to the group's rules of conduct and ethics. As with insurance companies and independent adjusters, California Pas are under the jurisdiction of the state's insurance department. Pas can solicit business only between 8 a.m. and 6 p.m. and never while a fire is still being battles, according to Goodman. Under the NAPIA code, Pas can never engage in the practice of law.
Insurance carriers are "leaving too much money on the table" by not filing counter-claims in states where there is pure comparative negligence, said Howard Fleming, national accounts manager with Arbitration Forums, based the Forth Worth, Knox page 2 Texas. Only 19 percent of the claims filed have counter-claims; industry executives have estimated the total should be between 40 to 45 percent, he said. With more that $1 billion in property/casualty disputes resolved by arbitration last year, that means hundreds of thousands of dollars are not being collected, Fleming said.
Pure comparative states include Arizona, California, Florida, Kentucky, Louisiana, Michigan, Mississippi, Missouri, New Mexico, New York, Rhode Island and Washington. California, New York and Florida alone, account for a third of the entire cases.
Fleming indicated that a counter-claim should be pursued if there is a belief that the other party (applicant) was at least partially at fault, and if the company has made payment to the insured.
Arbitration Forums handles several types of intercompany claim disputes including auto subrogation, property subrogation, personal injury protection and contribution, which is also known as special arbitration. The company also processes more than 300,000 cases annually, with 88 percent of the activity coming from auto physical damage. More that 2,300 insurers participate in the automobile subrogation forum, including virtually every large insurance carrier, as do more that 1,000 self-insureds.
Claim negotiations start with the first contact an adjuster makes with the claimant, and the key element in the settlement process is communication. That was the message delivered to the 2000 CCNC by Contract Costa Superior Court Judge Joyce Cram and Ulises Castellon, a consultant and expert witness with Sacramento-based Claims Analysis.
"The better you communicate, the better you are," Cram said. Communication is not just talking, she added. It also incorporates listening skills, which help in obtaining facts, perception and feelings. Castellon said the adjuster's primary task is to investigate, evaluate and resolve the loss.
The two speakers discussed psychological issues, including anxiety, fear and distrust as well as claimant motivations.
Setting and understanding the goals of adjusters, attorneys and claimant/plaintiffs, as well as those of the judging party, are important in the mediation process, Cram said. She also emphasized the need for establishing a "range of values" in a case, rather than setting minimum or maximum payment goals.
Even if a case is not settled, claims people can get something positive out of mediation, such as finding out what some of the plaintiff's needs are. It is important, the speakers said, to establish what is agreed upon before tackling the controversial issues in mediation conferences.
