“YES WE CAN!” may be new Plaintiff’s Bar Mantra Starting in January ….

For claim adjusters, the tort landscape is their battleground. It shapes and frames the rules of the game. Those rules can mean the difference between a boxcar reserve or a nuisance value number, between a defense verdict or a runaway award. A recent Business Insurance article (BI, 11/10/08, “Risk: Future of Several Issues Debated,” p. 25) cites three factors that may cause the Obama Administration to impact the tort landscape.

First Supreme Court appointments likely to be made within the next four years may influence areas of employment law.

Second, an Obama Administration may take a more circumspect view on Federal preemption. This arcane defense has huge financial implications for sectors including but not limited to pharmaceutical and medical devices. Preemption is the notion that, in some cases, Federal approval of a tightly regulated product renders that product immune from state tort claims saying that a product is defective. Billions of claim and defense dollars ride on this issue.

Third, Vice President-elect Joe Biden has been a consistent opponent of tort reform.

So, while the build-up for the January inauguration continues, claimants and members of the personal injury bar may ask, if only rhetorically, “Can we be more successful in pursuing claims starting in 2009?”

The likely answer is, “Yes we can!”

Jay Leno Gets Comic Relief from Insurance Claims

Jay Leno’s opening monologue on November 17th included two insurance jokes.

One poked fun at NBC. Leno said that, if the raging Los Angeles wildfires got too close to the NBC studios, audience members should do nothing to quell the flames because, “NBC needs the insurance money!”

He also observed that, after an LA-area disaster response simulation on November 14th, scientists had now figured out a way to give citizens 30-seconds of notice prior to an earthquake. “Of course,” Leno quipped, “that won’t give you much time to do anything but it will give State Farm enough time to cancel your policy!”

Who knew that insurance claims provides so much comic relief?

Does Speed of Claim Processing Correlate with Customer Satisfaction?

At one point during the movie Top Gun, Tom Cruise’s character – Maverick – turns to his fighter pilot buddy Hondo and yells, “I feel the need for speed!”

Claim adjusters may merely climb into the cockpits of their company cars instead of an F-15, but many still feel the need for speed. They feel it from bosses, from corporate service standards, from policyholders, claimants and attorneys.

Does faster claim service correlate with heightened customer satisfaction? A question on a LinkedIn discussion group among P&C Claim Professionals got me thinking on this topic.

The type and texture of the claim may dictate greatly the correlation between speed of processing and customer service. For example, if it is a straightforward first-party property loss, speed and customer satisfaction may directly correlate.
The insurer that can handle that claim in 24 hours or so will likely get high marks from me in customer service and satisfaction.


If I am a commercial policyholder facing a complex third-party property claim with time element features and find that my adjuster, in the interests of speed, has settled a claim in three days I may be tempted to think I got screwed because the adjuster
(a) did little or no investigation and/or
(b) over-paid the claim to slam the file shut quickly.

The context of the claim may a factor in correlating speed vs. customer service; in some instances, those factors may be inversely related. It’s tempting to give a lawyerly “It depends” answer to the question. Depending on the type of claim, though, adjusters could say “Speed Thrills” while others could accurately say, “Speed Kills.”

Faster is better … except when it’s not.

If Dems Win, Adjusters Can See Silver Lining in Resurgent Tort Bar

Today’s Wall Street Journal has an article (“Lawyers Aim to Roll Back Curbs on Lawsuits”) that addresses a theme the Claims Coach discussed a few weeks ago.
(http://online.wsj.com/article/SB122567159552291829.html)

It examines the implications of a prospective Democratic victory at the polls tomorrow. Apparently tort lawyers are licking their chops and refueling their Gulfstreams at the prospect of an Obama Administration. Financial contributions from law firms weigh heavily toward the Democratic side. Curbs on lawsuits, tort reforms, caps on recovery for non-economic damages, mandatory arbitration clauses in consumer agreements are all at risk.

Tort reform has not been a hot campaign topic in the McCain vs. Obama race. No surprise there. Amidst the panoply of more oppressing issues – the tanking economy being foremost – it’s hard to make any case for tort reform being a big deal.

Adjusters and claim professionals may lament the prospect of their jobs being rendered more challenging if the tort climate evolves into a more pro-plaintiff atmosphere.

On the other hand, to the extent there are more claims and loss severity grows due to changes in the legal environment, perhaps those factors will drive a stronger need for employing good claims talent.

Here lies a possible silver lining: whatever provides full employment for the plaintiff’s bar may as well provide full employment for claim professionals!

Will your claim file be the subject of the next consumer blog?

Time was you urged adjusters to consider the New York Times test in assessing their actions. You told them, don’t write anything in the claim file that you wouldn’t want to have on the front page of the morning New York Times. Don’t do anything you wouldn’t want reported in the New York Times, either.

That is still sound advice. In the Internet Age, though, it might bear some tweaking. Nowadays, if you shortchange a consumer – or (perhaps more importantly) – if a consumer thinks he or she has been mistreated by an adjuster, there’s a chance you could wind up as the subject of a blog.

Over the past month, the Claim Coach has seen at least a half dozen blogs fueled by steam coming out the ears of disgruntled policyholders and claimants. It has been said that nowadays the three most feared statements are,

“Here’s a letter from the IRS …”
“The doctor wants to discuss your test results ..” and
“Would you like to read my blog? …”

Many blogs are very specific in naming names, companies and excoriating claim practices. The Internet provides an electronic pulpit for disgruntled consumers to rant about how the adjuster never returns phone calls, wants to replace the quarter-panel with substandard parts or is balking at paying for smoke damage to the kitchen.

Have a good consumer experience and you may tell three other people. Get burned by a claim adjuster and you can let thousands know through the electronic bully pulpit of the blogosphere. This is an era where there are websites with URL’s such as www.dellsucks.com or www.ihatewalmart.com If you wanted to be famous on the web, I doubt that any adjuster, insurer or TPA had that in mind!

None of this is to inspire paranoia on the part of adjusters or their companies. If they are on solid ground, stick to their guns. It highlights the reality that companies, adjusters and an industry sector has a reputational risk at stake due to how we treat policyholders and claimants. If all your actions, inactions and statements were reported on the blogosphere, would you still feel comfortable?
Consider that as one yardstick for assessing your file-handling.

Adjuster fame through an irate consumer flame-job is no way to become well-known!

My Fellow Americans ....Is there an "Adjuster's Candidate"??

Which Presidential candidate stands to improve the lot of claim adjusters? Is one of the am “Adjuster’s Candidate”? Seriously, I don’t pretend to know. Nor should any of the following comments be seen as an endorsement for one candidate over another, not that such imprimatur would sway anyone’s vote. However, we can hazard some projections on how political issues might align with adjusters’ interests.

One issue that engages many claims people is tort reform. Adjusters toil in the vineyards of the tort system every day. For them, it is not some ethereal policy debate. Adjuster have to open their company’s checkbooks regularly because of the tort rules, and often end up feeling – rightly or wrongly – that those rules are stacked against the adjuster and for the claimants and their lawyers.

Historically, Republicans have been more congenial to reforming the liability system. By contrast, Democrats tend to see tort reform as a guise for pro-business interests and a way to shortchange consumers. Plus, the personal injury bar is historically a huge financial contributor to Democratic candidates.

One problem with this stereotype is that, against the backdrop of economic crisis and foreign policy challenges, it is unlikely that either candidate is going to be focused on tort reform as a burning domestic policy issue. Further, Sen. Barack Obama was a supporter of the Class Action Fairness Act. Amidst all the domestic and foreign policy hot potatoes, it is difficult to see any type of tort reform legislation getting much traction. This, coupled with the growing public image of big businesses getting government bailouts, throwing a tort reform “bone” to big business will not win any politician brownie points.

Bottom line: adjusters should not expect any Federal movement on tort reform in the near future.

This may be a good news/bad news situation, though. Should tort reform become a relatively dead issue and liability claims proliferate in a tough economy, more claims might portend a higher demand for claim personnel. View it as a Full Employment Act for Adjusters!

Perhaps that is one silver lining that merits bipartisan support.

Nothing Succeeds Like Excess (Coverage) ….

Occasionally I am called to serve as an expert witness on insurance coverage disputes. A disproportionate number of them have involved matters of reporting to excess and umbrella carriers.

Well, maybe I should say matters of NOT reporting or late reporting to excess and umbrella carriers.

In one case, the policyholder did not report a general liability loss to an upper level excess carrier until a freaky trial result delivered a multi-million dollar plaintiff award. In truth, the first defense attorney had evaluated the case as having modest “legs” on liability, but the damages were significant. There was much dispute later over the wording of the excess policy CONDITIONS, as to whether it required reporting if the insured had reason to believe that the claim would never penetrate the excess.

In another case, a primary insurer failed to notify an umbrella carrier of a personal lines auto claim which – you guessed it – blew north of the primary limits. The primary’s adjuster made some quick phone inquires to the agent and broker, was told that they couldn’t locate an excess policy, and the adjuster then assumed there was no such coverage; this despite the policyholder’s insistence that he did in fact pay for coverage with a specific named umbrella carrier. Rather than report it on to the umbrella (“throw it up against the wall and see what sticks …”), the adjuster assumed that absence of evidence (“We can’t locate the policy…”) equals evidence of absence (“There is no umbrella coverage …).

In both matters, literally hundreds of thousands of dollars in legal and related fees could have been saved had the risk manager (in case #1) or the adjuster (in case #2), invested just five or ten minutes to draft a letter to the excess/umbrella carrier. Five to ten minutes!

A sound risk management – and loss reporting -- adage is, “When in doubt, report it out.” There may be many reasons why insureds and primary carriers don’t do so. They may be too busy. They may have an oversight. They may be guilty of wishful thinking. They may have legit grounds to think it is a bogus claim. They may not want to come across as an alarmist. They may be worried that reporting a loss will cause the excess/umbrella to jack up the renewal premium. They may think the policy does not require them to. They may fear that the plaintiff’s demand will ratchet up once he learns of the added insurance limits. They may chafe at the prospect of some new upper layer insurer galloping in, nosing around and telling them to settle the case.

I understand all the reasons. Not all of them are flawed. Still, investing five to ten minutes to draft and send a letter to avert the huge risk of a coverage problem seems like a sound bargain to me. There is a huge upside (preserving coverage) versus a small downside (five to ten minutes of time).

Sounds like a good investment to me!

When they don’t invest the time, they are certainly providing full employment opportunities for coverage lawyers.