I love the feeling when lawyers at my law firm become masters of something better than me. Our policyholders’ clients and referral sources are better served than any other law firm because we share information, ideas and methods for complete recovery focused on one area of law – first party tort insurance. Other law firms simply do not have the ability or desire to invest the time and money. We become subject matter experts and better than we could if we weren’t in our company.
Last Thursday I attended the California Association of Public Insurance Adjusters (CAPIA) conference. I listened and watched Derek Chaiken give a presentation on “How to Avoid Getting Content Claims Denied or Rejected.”; I leaned over to Rob Rahmani, who is out of our Century City office in Los Angeles, and said, “Derek’s crazy clients with crazy claims in Southern California have made him a content claims master.” Rob nodded and agreed with me.
Whether a policyholder is a business owner dealing with sophisticated personal property machinery or inventory losses or a home policyholder dealing with extraordinarily expensive valuables, the truth is that most business and independent property insurance adjusters are not taught anything about the customization of the business. or loss of personal property. The vast majority of all damage training has to do with the cost of repairing property damage. Content and inventory are very second-rate stepsisters and are often overlooked.
I have written about this before. In an article, Content claims are important and FedNat does not adjust content claimsI noted that;
Content claims are often overlooked. Some insurance companies, like FedNat, fail to adjust contents claims and only estimate and adjust property insurance claims until their client does the good work of investigation and evaluation for them.
Chubb Insurance typically does a good job of adjusting its clients’ contents losses. Chubb not only has content experts who usually ensure that their clients are paid the full replacement cost of the content for losses directly, but they also have item evaluation sub-experts. For example, I had a couple that lost water and the furs in their closet got wet. Chubb had a “clothing content expert” who could quickly determine which furs could be repaired and which needed to be completely replaced. The expert added VAT and acquisition costs and arrived at a full replacement value. In Florida and many states, contents losses are not adjusted by the insurance companies that insure the losses.
Chubb’s actions are what good faith content adjustment is all about. Many companies make no adjustment to the content claim. Instead, they make estimates of the real estate and conveniently forget to do anything about the contents. Failure to investigate content coverage and evaluate content loss is a failure to act in good faith. Unfortunately, many insurance companies deliberately choose not to act in good faith when it comes to content claims because it is profitable. FedNat is one of them.
FedNat has recently been declared bankrupt.
In another article I wrote a decade ago regarding content and claims to personal property, Contents Claims adjustment is tedious, time-consuming, and few insurance companies do it rightI wrote:
The content claims that tuning is a hard and boring job. Few insurance companies do a quick investigation and evaluation of contents loss even though they may evaluate the real property damage. It is probably the most mature and overlooked arena for insurance companies to conduct wrongful claims on typical claims.
Why? The answer lies in the procedures required of claims adjusters and the incentives to not adjust in “good faith.” As I explained in Adjusting Claims is 100 Percent Policyholder Service – Does the Insurance Industry Provide This Service?, insurance companies act to promptly investigate claims, explain policy benefits and ensure that their clients are promptly paid whatever is due in good faith.’ This adjustment behavior is required in “good faith” claim behavior. Insurers who adjust claims in good faith will immediately pay more than competitors who cheat their insureds by delaying adjustment, failing to investigate, failing to explain coverage, studied mistakes, and quietly failing to pay full compensation. These cheating and unethical insurance companies save money on claims costs and claims dollars. It is a huge competitive incentive that most insurance company claims departments act on as a cultural norm because there are few personal and group incentives that reward individual and group-related acts of “good faith.”
Who ever heard of an insurer making awards to adjusters and claims departments for full paying policyholders? Instead, incentive programs in most claims departments reward lowering or achieving claims severity, claims accuracy, lowering leaks, etc. No one gets claims department “gold stars” for explaining benefits to a policyholder that will legitimately require the insurer to pay tens of thousands of dollars. guilty. In most companies, such behavior will get you disciplined and fired. Can you imagine claims managers talking over beers and crying about how someone in their claims department helped a policyholder make a claim for an extra million dollars that was almost missed? When I ask my claims adjuster buddies if that happens, they look dumbfounded and wonder what rock I crawled out from under. The fault lies with managers at insurance companies for creating a claims culture that is obsessed with not paying too much rather than taking care of the customer to the extent promised.
Insurance adjusters typically handle contents claims by handing out several blank forms to the policyholder and asking the policyholder to investigate and evaluate the loss by listing details of each damaged or lost item. With such actions, the insurance adjuster turns the policy from one with promised service by the insurer into a self-service policy. Most policyholders who do not know the insurer should help, take the forms and then, when they can, begin the tedious task of remembering what was destroyed or lost, find out if it can be repaired, the original cost, the age, the condition ( if asked), and come up with values from an internet search. To the delight of many cheating insurance companies, many policyholders give up and fail to make a full claim. Think about how many gift cards you’ve received as gifts and how many you failed to use because you forgot them. Get an idea of how profitable it is for an insurer not to act in good faith when adjusting content requirements?
Derek Chaiken gets a gold star for speaking out on this topic. He has become a subject matter expert. There is a lot to learn, and experience matters a lot.
For policyholders and those with contents and inventory claims that policyholders are not fully paid, you know where the experts are. We can help.
We invite those who are passionate about policyholders receiving full compensation on personal property or inventory claims to join us as we study this area of property insurance law. Policyholders need help. The insurance industry appears to be turning a blind eye to this significant area of loss.
Today’s thought
Ten thousand hours of study or action is the magic number to become great or expert at anything.
-Malcolm Gladwell
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