This article might seem out of place coming from a policyholder advocate who is often at odds with property adjusters. However, I feel for them. Their job is not easy and is further complicated by the system that has evolved.
Having prepared property claims for more than 20 years, I have seen the process change into what it is today — and the change is not favorable to the policyholder. Historically, the adjuster was the point person for the insured to interact with. The adjuster was given authority to make judgments as to coverage and measurement of property and business interruption claims, often relying heavily on their expert accountants and engineers to form their opinions.
Today, the adjuster is still the point person, but there is a group in the shadows that makes most of the decisions. Much of the authority has been taken away from adjusters, oftentimes putting them in the middle between the ultimate decision makers and the insured. This leads to confusion, delay and frustration by all parties involved. I liken it to the “Telephone Game” — where you get a group together in a circle and whisper something to the person next to you; by the time the message makes it around the circle, whatever you said has been distorted into something completely different. Just like the game, the insurance process suffers from a communication breakdown that confuses issues and delays resolution.
Some would say this evolved out of necessity for the insurance companies. They do need to be on alert for fraud, so close management of the process by those paying the bills is reasonable. However, the point of assigning an adjuster is to avoid micromanaging the process and to delegate some of that authority. Additionally, the adjusters are the closest to the loss and need to be able to make decisions on ambiguous issues. Having them go back to their superiors to clear every agreement defeats the purpose of having an experienced adjuster.
There are better ways to prepare for the challenge of claims than pointing fingers:
1. Adjuster Selection – the policyholder may be able to specify certain adjusters and even have them written into the policy. Even though they are subject to the same system, experienced adjusters are more likely to have clout with the insurance company. This may allow them to have more freedom than those adjusters who are less experienced. Additionally, the adjuster will appreciate being a part of your program and will be less likely to create problems.
2. Leverage Underwriters – the insurance business has two sides: sales and claims. These sides do not necessarily communicate. Often, the policyholder can feel that one thing was sold and another is being adjusted. Make sure that the claims side knows that you are willing to involve the sales side if differences arise. While this is not something you want to do on every claim, it can be an effective way to correct the claim adjustment team on issues you feel strongly about.
3. Policy Acumen – Do not assume the adjuster knows how your policy should respond better than you do. Involve your broker and coverage counsel when facing interpretation issues. Often, we see an adjuster make claims of fact about adjustment methods that conflict with our experience with previous claims.
4. Claim Stance – It is the duty of the policyholder to prepare the claim. Prepare your claim as you see it and be prepared to defend it. Do not leave it up to the adjuster and his team to tell you the number. Understand the areas of your claim that might be subject to debate and prepare your best arguments. Recognize the strengths and weaknesses of your claim and anticipate adjustment attempts.
5. Empathize – It is common to think that the adjuster is out to get you and just wants to minimize your claim. Though it does happen, for the most part, the adjuster is just doing her job. If there are unreasonable positions coming from the adjuster, she is likely just the messenger. Working with the adjuster instead of against her, showing empathy, may just get her to empathize with you and your position. Help her help you!
Like with anything, preparation is the key to success. Add a dose of a positive attitude, and you might even enjoy the process. It’s a better approach than the blame game. When you are faced with an insurance claim, having the right perspective, a little understanding and being prepared will make a huge difference. Incorporating these steps will improve your claim outcomes and will help make the most out of any claim situation.