Monday, 4 February 2013

Loss Adjusters and Claims Investigators

Just a quick and simple post today as I have been busy with work and things and have not had the time to think about a more lengthy subject. I thought I would clarify what a Loss Adjuster, or Claims Investigator (we have many names, not all of them polite, but all generally mean the same thing) is as some people often have misconceptions about how we are paid, and what our job is.

I have worked in both the Third party and First part claims arena in the capacity of Loss Adjuster, your role in both area's is quite different and the skill and knowledge required to do both jobs differs quite a bit as well.

First Party Loss Adjuster 

First party loss adjusting is about dealing directly with claims made by policyholders. So if you make a claim under your own household insurance policy and a loss adjuster is sent out to investigate your claim that is first party loss adjusting. I will explain what third party loss adjusting is a little later on.

When  Loss Adjuster is instructed by an insurance company to investigate a loss, be it a flood at your house, a fire or a burglary their remit and purpose is basically the same. Despite what people think a loss adjusters job is not to "do the policyholder" out of any money. Simply put a loss adjusters job is solely to investigate the claim and make sure that the policyholder gets exactly what they are entitled to under the policy.

If your house is robbed and you had £1000 in cash in the house but the policy has a cash limit of £500 then the Loss Adjuster will tell you about the limit on the policy. They will also probably want you to demonstrate proof that you had that much cash in the house. Most people see this as unfair penny pinching, but simply put the Insurance industry is besieged with dodgy, false or exaggerated claims and despite what people think your Insurance policy places the burden of proof firmly in the Policyholders hands. Meaning you have to prove that you had the money, the Insurer does not have to prove that you did not have the money.

I will discuss evidencing cash in the home in a later post as put simply Insurers, and loss adjusters such as myself are always skeptical when faced with large claims for cash in the home as few people actually keep cash at home any more.

As I mentioned earlier People often consider the Loss Adjuster asking for evidence as a way for them to some how improve their own fee by showing a saving for the Insurer, or penny pinching on behalf of the Insurer. In reality the truth is a Loss Adjuster wants to turn up, inspect the loss and be presented with the evidence so he can sign off your claim and have an early finish for the day. Its worth baring in mind that the average loss adjuster has between 100 and 200 claims open at anyone time with dips and spikes depending on weather conditions. That is a lot of people with a lot of different problems.

A common misconception is that the Loss Adjuster gets a bonus, or similar incentive to decline your claim.  Loss Adjusters are (almost always for the household products) salaried members of staff. They are probably not employed directly by your Insurer but they are always just members of staff on a fixed wage just like you.

How much or how little they pay you on your claim has zero effect on salary and their bonus scheme, this I can guarantee you given I have worked for both of the largest adjusting houses and know what their bonus scheme is.

 The bonus schemes in most Loss Adjusting houses are terrible and capped at £2000 a year pre-tax (so about £1,600 a year in your hand). They are awarded usually on the basis of good performance, and the only performance related marker is not related to payments to policyholders. It is however related to how many cases you settle a year. So when I say a Loss Adjuster does not want to argue the toss with you I mean it because every day your case remains open and disputed is another day that it is breaching the service level agreement with the Insurer and making him or her look bad.

As I said at the start a first party Loss Adjuster is their to make sure that you get what you are entitled to, that washes both ways and you can gain as well as loose. I have often found things which people did not know they could claim for, and improved their settlement figure, we are by and large human and do the job A. because it pays well (but not that well), and B. because a lot of us want to help other people.

If you get in a pickle with your claim and find yourself not understanding why the Loss Adjuster needs this bit of information or that bit, always remember he is asking because he has to, not because he wants to. Remain calm ask to have the request explained to you so you understand it better and try and get the information for him or her as quickly as possible. Then your claim can be paid, although a delay in providing information is inconvenient to the Loss Adjuster it inconveniences you more in the long run as it stops you being paid.

The simplest way to think of a Loss Adjuster, in the household market, is as a Project Manager. Your claim is their project and they will manage it through to conclusion, instructing builders, sourcing prices and finding you alternative accommodation if you need it and are entitled to it. 

Third Party Loss Adjusters (What I do now, mostly) 

Put simply we are (more often than not) seen as the bad guys by the Claimant, sometimes the Policyholder, and we are usually behind the decision which results in bad press for an Insurer or a company when a claim is declined. Let me explain that a bit more though.

A third party Loss Adjuster is instructed by Insurers to investigate and report on a claim which is being made against a policyholder. So as an example if you make a claim against your employer because you got hurt at work a third party Loss Adjuster would investigate your claim and provide a report to the Insurer advising them whether the claim should be paid, or defended through to trial if necessary.

Most of you will almost never meet one of us, unless you are a witness to an accident or are a policyholder who is being sued. We deal with everything from you suing your employer, to postmen tripping over on peoples driveways to car accidents, fatal accidents, product failures, damage to property.

Basically if you can think of someone to sue and why we will probably be the ones to investigate if you should be paid or not.

Our job is to identify if a claim can be paid or not. We inspect every aspect of your claim and decide what parts of the law are relevant, what case law is relevant and whether there is a viable defence to the claim. If a claim has to be paid we will consider evidence and negotiate with the Claimant (or their Solicitors) until we can secure the lowest payment possible for our client the Insurer. That is not to say we will haggle with you for all eternity to save £50 quid but we will do all we can to make sure you get the minimum you are entitled to for your claim, not the maximum.

I have been called cold hearted, ruthless and worse names. Our job is not to be compassionate it is to be objective and concentrate only on what can, and cannot be proven. This is particularly relevant when investigating Medical and Clinical Negligence claims when it could be easy to focus on the Claimant who has been killed, badly injured etc and forget that the injury is not the end of the equation, the question is always has the Insured been negligent. If in the eyes of the law they have not been we will find and form a defence and instruct solicitors to carry that defence forwards if necessary.

Sorry for the slightly naff post tonight but I have been quite busy and have not had the time to post up something more substantive. I will try to get something a bit meatier up next. As ever I hope that was useful to someone.

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