Beware of These Deadly Sins of Claims-Handling!

Yahoo has a risk management forum called RiskList, which I have been a member of for years and years: http://finance.groups.yahoo.com/group/RiskList . I highly recommend it!

Recently, coverage guru Barry Zalma of California kicked off an interesting discussion, calling for nominations of the “7 Deadly Sins” of Claims Handling.

Barry ended up with more than just seven, as many people (including the Claims Coach) chimed in. Barry will be writing an article about these “sins,” but gave me permission to share the list with readers. They can form the basis for a claims training session and will go far toward inoculating companies and adjusters from bad faith claims.

Here is the list:

1. Failure to read every word in the policy and in the claims regulations

2. Failure to conduct a thorough investigation before making a claims decision.

3. Failure to teach the insured/claimant how to make and/or perfect their claim.

4. Failure to communicate with the insured.

a. Under communication

b. Routine status and timely substantive communication with insured

c. Failure to prepare policyholders and claimants in advance for “bad news”

d. Failure to respond to communications

5. Failure to document the claim file

6. Getting emotionally invested in one’s claim valuation, settlement position, coverage stance..

7. Unnecessary or unreasonable investigative delay

8. Discontinuity by frequently reassigning the claim to new adjustors

9. Failure to develop/evaluate damages concurrently with liability

a. (Ignoring damages in pursuit of a liability/coverage defense);

10. Failure to give the insured the benefit of the doubt on coverage “coin flips.”

What “deadly sins” of claims-handling (or mishandling) would you add to the list?