Innovative Conflict Resolution

Third in the series, starting here.

In my last post, I introduced the concept of the Shared Goal: The claims person and you both have a common goal, which is to resolve the claim by having the insurance company pay you money.  I also introduced the concept that to achieve your goal, you should help the adjuster meet his or her goal, by making it easier for them to pay you money.  That’s called a “win-win” scenario.  The antithesis of this is commonly referred to as a “zero-sum” scenario, where only one side “wins.” (This latter scenario is often romanticized in books and movies, often involving a dramatic courtroom battle; however, this is largely mythological.)

The Claims Person’s Job(s)

The claims adjuster’s main job is not to save the insurance company’s money, although it can’t be denied – nor should be be – that keeping settlements and other expenses are a factor.  The claims person’s main job is to settle a claim on behalf of his or her policyholder (aka “the insured”).  We all buy insurance policies specifically so we don’t have to pay claims ourselves. Looking at it from the standpoint of the policyholder, if someone files a claim against me, I expect the insurance company to protect me, once and for all.  When the claim is over, I don’t want to ever be bothered by that person (“the claimant”) again.  This will mean that the insurance company – besides paying the claim – must get a release from the claimant, releasing me from all liability.

I also would expect that the claims person would not overpay the claim; simple logic tells me that if claims are overpaid, my premiums are going to go up.  In fact, I may prefer that the claimant get nothing at all, especially if I don’t feel if I am not liable to the claimant.  However, there are laws to protect claimants from being treated unfairly, often called “fair claims practices.”  So, the adjuster now has yet another responsibility: to pay claimants fairly.

So, the adjuster now has these responsibilities:

1. Securing a Release of the Insured
2. Controlling costs and claims payments
3. Making sure that claims are not overpaid or paid in error
4. Acting fairly to the Claimant

As you can see, the adjuster has to find the balance between these often conflicting goals; that’s where the word adjuster comes from.  In order to justify what is paid for a claim, the adjuster must do a number of things:

1. Confirm that the insurance policy provides coverage for the particular claim.  This is done by reviewing the policy, the facts of the loss, and the damages claimed.  Until coverage is confirmed, no claims settlements can be paid.
2. Establish that the Insured is legally liable for the damages claimed, by investigating the facts of the loss and determining whether the Insured owed a Duty, whether the Duty was Breached, whether the Breach was the Cause of any damages, and finally, whether the Damages claimed resulted from the Breach.
3. Provided the results of 1 and 2 resulted in a decision that the claim should be paid, establish how much the claim is worth.  This is done by reviewing all applicable records (medical records, financial records, etc.), talking to the claimant, and at times hiring experts to provide opinions on various issues. This could include retaining a doctor to examine the claimant to provide any missing information.
4. Negotiate a settlement, once the value of the claim has been reached.

A lot of time and effort goes in to evaluating a personal injury claim, and everything must be well-documented.  Once the investigation is complete, the adjuster may be required (depending upon his or her experience and the requirements of the company) to confer with a manager to get the authority to offer a certain sum of money.  Generally, a settlement range is agreed to, and the adjuster is only able to resolve a claim for an amount within that range.

Even though from your point of view it might seem like the adjuster is sitting by the phone spinning a large “wheel of fortune,” by the time the claims person is ready to negotiate your claim, a lot of thought has gone into evaluating your claim.

Next:  Tips and Tricks of Claims Negotiation