If Adjusters and Attorneys Re-wrote "The Night Before Christmas"

-- THE NIGHT BEFORE CHRISTMAS, LEGALLY SPEAKING --

Whereas, on or about the night prior to Christmas, there did occur at a certain improved piece of real property (hereinafter "the House") a general lack of stirring by all creatures therein, including, but not limited to a mouse.

A variety of foot apparel, e.g. stocking, socks, etc., had been affixed by and around the chimney in said House in the hope and/or belief that St. Nick a/k/a/ St. Nicholas a/k/a/ Santa Claus (hereinafter "Claus") would arrive at sometime thereafter.

The minor residents, i.e. the children, of the aforementioned House were located in their individual beds and were engaged in nocturnal hallucinations, i.e. dreams, wherein vision of confectionery treats, including, but not limited to, candies, nuts and/or sugar plums, did dance, cavort and otherwise appear in said dreams.

Whereupon the party of the first part (sometimes hereinafter referred to as "I"), being the joint-owner in fee simple of the House with the parts of the second part (hereinafter "Mamma"), and said Mamma had retired for a sustained period of sleep. (At such time, the parties were clad in various forms of headgear, e.g. kerchief and cap.)

Suddenly, and without prior notice or warning, there did occur upon the unimproved real property adjacent and appurtenant to said House, i.e. the lawn, a certain disruption of unknown nature, cause and/or circumstance. The party of the first part did immediately rush to a window in the House to investigate the cause of such disturbance.

At that time, the party of the first part did observe, with some degree of wonder and/or disbelief, a miniature sleigh (hereinafter "the Vehicle") being pulled and/or drawn very rapidly through the air by approximately eight (8) reindeer. The driver of the Vehicle appeared to be and in fact was, the previously referenced Claus.

Said Claus was providing specific direction, instruction and guidance to the approximately eight (8) reindeer and specifically identified the animal co-conspirators by name: Dasher, Dancer, Prancer, Vixen, Comet, Cupid, Donner and Blitzen (hereinafter "the Deer"). (Upon information and belief, it is further asserted that an additional co-conspirator named "Rudolph" may have been involved.)

The party of the first part witnessed Claus, the Vehicle and the Deer intentionally and willfully trespass upon the roofs of several residences located adjacent to and in the vicinity of the House, and noted that the Vehicle was heavily laden with packages, toys and other items of unknown origin or nature. Suddenly, without prior invitation or permission, either express or implied, the Vehicle arrived at the House, and Claus entered said House via the chimney.

Said Claus was clad in a red fur suit, which was partially covered with residue from the chimney, and he carried a large sack containing a portion of the aforementioned packages, toys, and other unknown items. He was smoking what appeared to be tobacco in a small pipe in blatant violation of local ordinances and health regulations.

Claus did not speak, but immediately began to fill the stocking of the minor children, which hung adjacent to the chimney, with toys and other small gifts. (Said items did not, however, constitute "gifts" to said minor pursuant to the applicable provisions of the U.S. Tax Code.)

Upon completion of such task, Claus touched the side of his nose and flew, rose and/or ascended up the chimney of the House to the roof where the Vehicle and Deer waited and/or served as “lookouts." Claus immediately departed for an unknown destination.

However, prior to the departure of the Vehicle, Deer and Claus from said House, the party of the first part did hear Claus state and/or exclaim: "Merry Christmas to all and to all a good night!"

. . . Or words to that effect.

Use The Holiday Season to Elevate your "Claims Game"!

Christmas time is one time of year when I’m glad to be a claims person and not an underwriter. With so many insurance renewal dates at 12/31 or 1/1 on the calendar, the underwriters are at peak workload at this time of year, scrambling to address new and renewal business. Underwriters are besieged by the need for insurance quotes or brokers who want to cut deals. In fact, it is downright hard for underwriters to take much time off during the holiday season.

Not so for the claim folks. If anything, our volume drops this time of year. There are likely many reasons for this. One may relate to the fact that we only handle product liability claims. If we were dealing with personal lines losses – autos or homeowners for example – December might be a busier time. In the world our claims department occupies, though – commercial liability – the folks at insured companies who report claims are often out on vacation themselves. Attorneys who generate much of the paper and activity on litigated cases are in a wind-down mode. Judges do not seem too keen to schedule mediations or trials during the Christmas season, though I have been in a couple of nail-biters during yuletide, worried that the jury was going to turn into a gaggle of twelve Santa Clauses.

For some claim departments, the holiday season marks a ramp-down of the pace of business. Less incoming mail arrives. The phone is quieter. Fewer emails and faxes intrude. (Your mileage may vary, again either due to the types of insurance you write or if you work for a TPA that gets overflow assignments.)

This can be an excellent time for the claim staff to invest time in activities that will boost their productivity and get them off to a running start the next year. For example:
• Purging old materials (both hard copy and files on hard drives) that are no longer needed
• Organizing one’s desk, drawers and reference material
• Writing out professional goals for the next year and embedding ticklers or reminders on the calendar to revisit progress on these periodically through the year
• Networking with other professionals that you had a hard time finding time for earlier in the year

Use any “lull” presented at the end of year to catch your breath, gather yourself, get organized and get focused on what you want to accomplish as a claim professional in 2008!

The Claims Coach may slide down the chimney and appear again before the end of the year but, in any event, he wishes all a happy and fun holiday season!!

Two-Faced Legal Fee Management? Defense Counsel vs. Coverage Counsel Costs

A common complaint leveled against insurance companies is that they pay one (low) rate for their defense counsel and another (higher) rate for their coverage counsel. The idea is that insurers skimp on legal services when it’s their insureds whose fate is on the line but spare no expense when their own hides are at stake in a coverage or bad faith dispute. The undercurrent is that insurers are being inconsistent if not two-faced by observing two separate tracks of rate structures.

One claims specialist recalls a meeting of claims executives years ago wherein the subject for discussion was attorneys' fees (as it often was and is). One vice president (and pundit ) was overheard remarking, "You care about 'how much' when it's the insured who is being defended, but when it's YOU who's the defendant, or the subject of a subpoena, then you care about 'how good.'"

Let’s look at this knock on insurers, though. First, comparing general insurance defense counsel with coverage counsel may not be an apples-to-apples comparison. General insurance defense counsel often defend policyholders against garden-variety kinds of claims that many (many) law firms could handle competently, by contrast, there are not nearly as many coverage lawyers around. The two kinds of practice call for somewhat different skill sets, and their respective supply and demand curves are different.

Let’s also note that most litigated coverage cases involve larger stakes than the run of the mill litigated case (exceptions abound). Second, the macro/precedent impact of a coverage matter – broader impact on other cases and policies -- makes the consequences more sweeping. Third, coverage expertise is often more specialized than general litigation defense, commanding premium rates.

Just as partners in firms are paid more than associates for a host of (legit) reasons. Partners are more specialized and more seasoned. They are in greater “demand” due to their business development skills. Thus, they are paid more than associates. Does this suggest that law firms are two-faced or inconsistent?

The quip from the Claims VP is telling and perhaps somewhat tongue-in-cheek, but nevertheless there is nothing inherently two-faced or nefarious (nor surprising) that coverage counsel often command higher rates than run-of-the mill defense attorneys, no disrespect intended to the latter either.

In some cases, defense counsel possibly should command equally high fees or even higher fees than coverage counsel. On balance, though, a fee disparity here may be rational and have a legitimate rationale.

What’s in a Name? For Claim Professionals, Plenty!!!

Juliet:
"What's in a name? That which we call a rose
By any other name would smell as sweet."

-- Romeo and Juliet (II, ii, 1-2)

Clearly, Shakespeare’s Juliet had never served a stint as a claims adjuster. She was a smooth one with words, however. Even Claim Coaches stumble and bumble. Last Friday I was emailing a request for a settlement check on a resolved product liability claim in Texas and incorrectly referred to my client as Bridget when her name is Gretchen. (Background: for years, this client’s in-house risk manager was our claims contact; her name was Bridget. She found love and happiness in Australia, though, and left the corporate world for Oz years ago.) That is no alibi, though.

Her successor was named Gretchen. I knew that. Should have known that. Terrific lady and client. Old habit die hard and brain cells die off as you age. At the end of a long day and week, though, the Claims Coach had a brain fart (not covered by my HMO and not listed in DSM III) and referred to the client as Bridget. To help matters, I cc’d the client in on the email.

Ouch!

She called me on it. What could I say? Throwing myself on the mercy of the court/client, I apologized and told her that – as penance for the transgression -- she could call me “Kelvin” or “The Idiot” for three days – her choice. Fortunately, she was a good sport about the whole thing and assured me that she “was just messing with me.” Not every client is going to be so good-natured about it.

Names are Important to Relationship-Building

It prompted me thinking, though, about the role of names in claims handling and customer relations. The take-away is that names are vitally important to people. Make sure you get them right (do as I say and not as I sometimes do!). Adjusters and claim professionals need to build good, strong, interpersonal relationships to succeed in their jobs. One way to do this is to sweat the details and get names right. This involves not just calling a Gretchen Bridget, but also taking time to try to pronounce names correctly. Adjusters will likely have some claimants, insureds and clients with odd names. Take time to ask the person how to pronounce the name. What works for me is something like, “Ms. XXX, I want to be sure I pronounce your name right, so can you help me?”

Just because you are sweating those details does not mean that others will necessarily get your name right. Reciprocity may be elusive here. As a Quinley, I have been called Quincy, Quinney, Quigley, Kelvin, Calvin and other terms likely best gone unmentioned in this blog (let’s keep our PG Family rating). Perhaps I have been referred to by the initials S.O.B. as much as by the initials CPCU.

As a neophyte adjuster at Crawford & Company, one day I returned to the claim office from taking a statement (this was at a time when adjusters actually did such things), only to find the staff laughing, hooting and hollering over my arrival. When I asked, “What’s the deal?” my coworkers responded that while I was out on the road, a claimant had phoned, complaining about her adjuster and the paltry settlement he offered. She said she could not recall the guy’s name but that “He was a little red-headed white dude!” From then on, the claim staff jokingly referred to me as “The Little Red-Headed White Dude.” I could not shake the moniker, as I explored claim office openings and transfer opportunities in garden spots such as Three Mile Island, Juneau, Alaska and Kurdistan.[1]

Remembering Boosts Adjuster Credibility

People who forget names can erode their credibility. Recall Vice Presidential candidate Adm. James Stockdale beginning one of his campaign debates with the rhetorical question, “Who am I and why am I here?” Voters were not impressed. Maybe they could not answer Stockdale’s rhetorical question, either.

Occasionally our claim office receives feedback surveys from defense law firms that we employ. I applaud this discipline and wish it were more widespread (the subject of another blog, perhaps). One of my right-hand people is a very talented claims professional whose last name is Khin, a somewhat unusual name I grant. She has received law firm feedback surveys which butchered her name – Kihn, Kine, King, you name it. She was not impressed. “Gee, if they can’t get the name right, what does that say about the law firm’s client orientation?” The laudable gesture of sending a Feedback Survey is undercut by the failure to get the client’s name right.

As a freshman on my high-school cross-country team, the cheerleaders couldn’t remember my name amidst the team’s fast-legged and much better looking luminaries, of which I most certainly was not one. So on the “Spirit Posters” hung in the cafeteria they wrote, “Go – Little Red!” Those friends who knew me and knew I was on the cross-country team whooped and hollered about me being – much to my mortification – “Little Red.” (A taller carrot-topped runner was known as “Big Red.”)

Regardless of whether you are dealing with clients, insureds, claimants, witnesses, co-workers – pay attention to names. Strive to not only call people by the right name, but take pains to get the spelling and pronunciation right. Before calling someone by their first name, pause. Some people might find that off-putting, too familiar and presumptuous. Others may welcome it. (One tip: do they call you by your first name?) Do not hesitate to ask, “Mr. Jones – do you mind if I call you Jim…?”

Moral: Sweat the details, especially if you “are not good with names.” Many people fall into this category. There are many mnemonic tricks and memory devices to help people remember names – I just can’t remember them all for purposes of this blog. (For seven specific tips advocated by CareerBuilder.com check out http://www.cnn.com/2005/US/Careers/07/22/names). Your effectiveness not only as a claim adjuster but as a claim professional – and professional networker – is enhanced if you pay attention to names.

To each person, the sound of their name is the sweetest sound they will hear, though I used to joke that, until the age of 13, I thought my name was “Turn it Down!” because that is what my parents used to yell at me all the time while I played my Monkees albums on the stereo.

Don’t turn it down, though. Instead, tune in . . . to proper names. Sweat the details. Get the name right….

---

[1] Now, I just wish my (remaining strands of) hair was still red. I’m more likely to be called a Silverback than Carrot-Top.

Can you REALLY Survive a Claim Audit????

Surviving a Claims Audit (Part 1)

By Kevin Quinley

For any claims manager, supervisor or adjuster, claim audits are inevitable. They are also about as much fun as a root canal. Claim audits need not be frustrating or mysterious, however, if the claim staff has prepared properly. What follows is a discussion to help you prepare for a claim audit, anticipate what the auditors may need, and develop a procedure for handling claim audits.

DEFINING FOUR KEY ROLES

In any claims unit, a minimum of roles must be defined ahead of an audit. In small companies or in small claim departments, one person may hold multiple roles.

For any audit, there should be a most responsible person. This may be defined by the hierarchy of the insurance company, TPA or claim department. The most responsible person is the individual with the most accountability for claim operations. The critical function of this role is to provide leadership and to communicate to the auditor or constituency that the company or claim department intends to comply with all rules and regulations.

Another role, one that must be chosen in advance, is the escort. This role may be key to the success of an audit. The escort should be familiar with the everyday operation of the claim department, know who will have answers to the auditor's questions, and understand the company's policies regarding specific situations. The escort should be prepared to accompany the auditors at all times. The escort's job includes meeting the auditor’s needs, guiding the auditor to appropriate subject matter experts (SME’s) and communicating internally within the insurance company, TPA or claims department as to how the audit is progressing.

When an auditor has asked for something that the claims team is not prepared to provide, best practice is to have defined ahead of time a person who can explain the company's policy on such matters.

Additionally, one or more subject matter experts should be identified. These are specific individuals who may be called upon to answer or questions from the claim auditors. A list of all subject matter experts with their areas of expertise and authority should be created and updated as claims personnel change. Role-playing before a claims audit help prepare subject matter experts for the kinds of questions they are likely to face. Preparing subject matter experts and ensuring that the list of subject matter experts is accurate or some of the most highly leveraged preparation activities in which a claims unit can invest.

It may also be necessary to have one or more designated “runners.” Among other duties, runners locate documents, find subject matter experts and tell them when to appear, and notify department managers if the auditors are going to enter their area. It may be less difficult to recruit a runner once you sell the fact that they will be “in the know” about the claims audit.

When a claim on order contacts you to notify of an upcoming visit, you may or may not have the ability to negotiate timing. Nevertheless, let auditors know if there is some extraordinary event about to occur, such as an all-day meeting occupying the entire claim team, a huge renewal, office move, change in computer operating system, etc. The auditor may then change his or her plans, or may not.

A winning football team has clearly defined roles. Same with a winning claims team. Assign these four roles in advance of a claims audit to apply some pain-killing Novocain to the claims equivalent of a root-canal!

Welcome to The Claims Coach!

Welcome to The Claims Coach!

The Claims Coach is a periodic blog on the wild, wonderful and always fascinating world of insurance claims. It strives to delivers practical tips, insights and musings to today’s property-casualty professionals.

The Claims Coach is written by Kevin Quinley, CPCU, AIC, a claim executive, trainer, speaker and author of over 600 articles and ten books, including Time Management for Claim Professionals.

We promise not to don a gray sweatshirt, put a whistle around our neck and never say, “Drop and give me 20 …. Proofs of Loss”! We do, though, promise never to bore you and to offer ideas and insights to help you elevate your claims-handling “game”! Welcome!