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Insurers are large organizations with different eligibility levels for payment of receivables. The adjuster is the representative at the loss site. He or she must report in writing to superiors with the authority to pay the compensation required unless the claim falls within the authority of the adjuster who will only then write a short termination report.
Writing a clear, concise, comprehensible and comprehensive report is an essential part of the adjustment job.
The text report should be written immediately after the adjuster's first meeting with the insured in each file, no matter how small. The length and detail of the report should only be limited by the extent of the loss. The caption report is written to explain to the adjustment manager everything the adjuster knows about the loss so that decisions required of them by the insurer and the law can be made. captions:
This should provide information about:
- the company (ies) insuring the risk;
- insurance number (s);
- insurance period;
- insurance limits;
- special liability limitations applicable to the loss
- available insurance;
- applicable form number;
- if there are other insurances with other insurers, details of the second insurance should be provided; and
- any unusual terms, restrictions, exceptions or warranties.
If the insured is an individual, the adjuster must determine his or her:
- date and place of birth;
- social security number;
- state driver's license number;
- marital status;
- name and age of spouse and children, if any;
- previous loss history;
- if the insured had ever had the insurance canceled, renewed or refused; and
- the insured's financial status, salary and / or net worth.
The information described above may sound like extremely personal information that will be difficult to obtain. It is not. Ask the insured and the information will be provided. It is the job of the adjuster to get all the relevant information. Further investigation cannot be carried out without this information.
If the insured is a company, the adjuster must report:
- the names of the officers;
- where the company is incorporated;
- his position with the Secretary of State or any other appropriate State authority;
- the identity of the majority owner (s); and
- its financial position, net worth and dividends or other profits paid to shareholders.
- If the insured is a partnership, the adjuster must report:
- the identity of the partners;
- type of partnership (general or limited);
- on a limited partnership, the name of the general partner; or
- on a general partnership the names of all partners and the person acting as managing partner.
- a description of all properties owned by the partnership, its net worth and the financial condition of the partnership; If the insured is an estate, the adjuster must report:
- the identity of the administrator or executor (the adjuster must obtain copies of the official documents designating a person as administrator or executor of the insured's estate);
- estate assets; and
- the identity of those who will share the estate's assets when it is shared.
The adjuster must answer the following questions about the loss:
- What happened?
- When did it happen?
- Where did it happen?
- Where was the insured when it happened?
- What did the insured do when it happened?
- Who were the witnesses?
- Did the loss involve burning origin, mysterious disappearance, alleged theft or evidence of third party involvement?
The adjuster should also cover in the report the use of statements made by the adjuster from witnesses with summaries of the information obtained.
Potential Fraud  The report must explain facts leading to suspicion of fraud.
It should indicate whether a possible fraud has been reported to the local police, the fraud division or the Bureau of Fraudulent claim if the adjuster's state has one, or another official agent for reporting a crime.
A report on suspected fraudulent claims is required by the Model Insurance Fraud Act in the Coalition Against Insurance Fraud and various state statutes on reporting crimes.
Fraud units or bureaucracies have been adopted in almost every state. The adjuster should be aware of the statutes and regulations of the jurisdiction in which the adjuster operates and where the claim arose.
The adjuster must also report if a report has been submitted to the Property Insurance Loss Register (PILR) – a type of "Index Bureau" that has been merged into the ISO All Claims Database. The adjuster reports property losses where the underwriting company may receive a report of other losses reported by the insured under other insurance companies, the National Insurance Crime Bureau (NICB), INDEX System or the ISO All Claims Database which contains a database of property losses. It is not complete, but it can provide useful information.
Experts retained by the adjuster
The adjuster must report to management all experts retained, for example if a professional photographer or video operator has been used, or if private investigators, fire cause and origin experts or expert engineers were retained to inform the adjuster about the cause and the cause of the loss.
Meetings with officials of authorized state authorities
The adjuster must report his meeting with police or fire investigators and what they observed. The adjuster discusses requirements that are or should be imposed on investigating agents for their actions.
As an example, California Insurance Code section 1875 et. seq . requires that an arson investigator for a police agency provide everything in a police authority file to the adjuster if the actions are determined by the agency not to harm its ability to prosecute a criminal who may be responsible for the loss.
Many states have adopted variations of this section.
California Insurance Code Sections are modeled in part on provisions recommended by the National Association of Insurance Commissioners (NAIC). The adjuster should consider the statutes of his or her particular state when addressing this aspect of the investigation and report.
Many states have enacted the NAIC Model Immunity Act, which grants immunity to insurers who maliciously report information about suspected, expected, or completed fraudulent acts of law enforcement to law enforcement officials.
A complete and detailed description of the property involved is required. If it is a structural requirement, the adjuster should report:
- type of construction,
- its age and condition;
- the use for which the insured used it,
- the total square foot;
- the materials from which it was constructed, e.g. frame and stucco,
- all special properties, such as an atrium, an indoor pool or a spa; and
- all unusual hazards noted by the adjuster, such as a peeling roof from old age, a perimeter fence that is falling, bad dogs or a dangerous activity performed by an insured are reported, for example:
- to reload bullets in a garage;
- who runs a sausage factory in a residence;
- a clothing store with all the necessary equipment operated as a commercial enterprise from the insured's residence;
- the presence of wild animals kept as "pets"; or
- the presence of explosives, petrol or other dangerous substances.
The adjuster must also report the replacement value for the entire structure; the actual cash value of the entire structure; and the actual cash value of all content or the Company's personal property prior to the loss. This will provide information about the risk for the person responsible for adjustment and the insurer, which may lead to a guarantee measure being taken.
The adjuster should, if compensation cost coverage is available for the insured report on the adjuster's estimate of the replacement value of the property's structure and content and that he or she has reached an agreement with the insured on the replacement cost value and the actual cash value.
Below this image, the adjuster explains the extent and nature of the damage, the types of objects damaged and the adjuster's estimate of the loss and the proposed reserve. The adjuster should also cover information necessary to support the information discussed above, such as preparation of estimates, meetings held or held, what has been discussed with the insured, what the adjuster will do from the date of the report forward and what the adjuster has instructed others to do.
Title and eligibility
Under this image, the adjuster will provide details of all persons with a record title, all mortgage rates, all mortgages against the property and all persons with an insurable interest in the property. An "insurable interest" is any interest, the loss of which will cause financial or other harm to the insured.
Insurable interest can also be defined as:
Any interest in property, or any relation thereto, or liability in respect of it, of such a nature that a planned danger can directly dampen the insured. [California Insurance Code § 281.]
Also recognize that "insurable interest" is defined as including "all lawful and essential economic interests in the security or preservation of property from loss, destruction or economic damage."
According to the New York Court of Appeals, "the rights under a fire insurance policy are determined both in terms of amount and repayment period in the event of fire loss." See Whitestone Sav. & Loan Companies. V. Allstate Ins. Co ., 28 NY 2d 332, 334, 321 NYS 2d 862, 270 NE 2d 694 (1971).
It also realized that section 3401 "requires an insurable interest at the time of the loss in matters relating to property or accident insurance." See Herman v. Provident Mut. Life Ins. Co ., 886 F. 2d 529, 534 (2d Cir. 1989). Counihan v. Allstate Insurance Co ., 25 F. 3d 109 (2nd Cir. 05/26/1994).
Persons with unregistered interests, such as parents who have contributed to the purchase of the property or lenders who have a deed of trust but have not registered it should be noted.
When they insured have no interest in the property, they are not entitled to insurance benefits.Losses are often reported by persons with an interest in the property but who are not insured.The adjuster must therefore carefully show how he or she has determined the interests of the insured and everyone else in the property and that persons who are not named as insured who are not entitled to the benefits of the insurance but make claims.  There is no requirement that there is an insurable interest in a specific car, as an insurer is responsible for personal protection benefits to the insured, regardless of whether the vehicle mentioned in the insurance is involved in the accident or not.
A person obviously has an insurable interest in their own health and well-being. This is the insurable interest rate, which entitles people to personal protection benefits regardless of whether a covered vehicle is involved.
For example, a house in a block, before the transfer of ownership, suffers a fire loss. The named insured is the record owner but the buyer is in possession. According to agreement and common law, the risk of loss is on the buyer. The named insured in this example did not incur any loss. The buyer in possession is not named as insured on the seller's insurance so he has no claim.
The adjuster, below this caption, explains all possible policy violations. Violations may include any of the following:
- delayed notice,
- vacancy or vacancy,
- change of ownership,
- other unresolved insurances,
- erroneous petitions,
- warranty violations;
- a falsely sworn proof of loss;
- a misconception to the adjuster about the extent of the loss;
- a misconception to the adjuster about the cause of the loss;
- concealment of material facts;
- the loss is not within the insurance period; or
- failure of the insured to protect the property from further loss.
The report should also include any significant changes in the risk of loss that the property faces.
Subrogation and Salvage
Subrogation is a fair remedy that allows an insurer who pays a claim to take over the insured's rights and recover from the person or entity that caused the damage to the insured. It is therefore incumbent on the adjuster to determine through the thorough investigation who, in addition to the insured, was responsible for the loss.
This caption requires the adjuster to comment on why subrogation is or is not involved. A right to recover during the fair or contractual action for subrogation may arise due to another's wrongful act or a contractual relationship that exists between the insured and the person responsible for the insured's property. The adjuster must, in order to meet this requirement, understand the Torts Act and the Contracts Act.
Salvage requires comments on the nature of the salvage and its healthy value. The adjuster should report all arrangements that have been made for the disposal of the salvage including the name and address of the rescuer.
Under this caption, the adjuster comments on the desirability of the risk and whether the adjuster is appropriate or not. considers that coverage should continue. The adjuster must report detailed facts to support the recommendation. The adjuster also uses this caption to recommend additional investigations, experts or advisors needed to complete the survey.
Writing a caption is crucial for a wise and thorough evaluation of a claim and handling of the claims process.
Adapted from my book, The Compact Book on Adjusting Property Claims, third edition Available as a Kindle book. Available as a pocket.
© 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to serving as an insurance consultant specializing in insurance coverage, insurance claims management, bad insurance and insurance fraud almost as much for insurance companies and insurance companies.
He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance and claims management attorney and more than 54 years in the insurance industry.
He is available at http://www.zalma.com and firstname.lastname@example.org. Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award. For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their indemnity staff to become insurance professionals.
Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma ; Go to Barry Zalma videos on Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library-https: //zalma.com/blog/insurance-claims-library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter -2 / podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4