Every insurance company says it conducts itself honestly and fairly when handling a customer’s insurance claim. But how do you know it really is acting honestly and fairly? In California, policyholders with losses have a right to see their claims file.

Amy Bach is significantly responsible for this California law as I noted in Amy Bach – NAPIA Person of the Year. United Policyholders notes that:

You have a right to receive a copy of every claim-related document in your file. An insurer shall “notify every claimant that they may obtain, upon request, copies of claim-related documents…” including construction estimates, photographs and the documentation backing up their estimates and “all other valuation”. This means how your contents and construction estimates may have been depreciated. [See “Requirements in case loss occurs” in Cal Ins Code 2071.] The only thing you are not entitled to receive is attorney-client privileged communications and their attorney work. This means valuations, photographs, measurements, adjustor notes and reports, contents depreciation schedules, construction depreciation schedules, materials estimates, etc. are all part of your claims process, and you are entitled to receive complete copies of these so you can review them.

Robert Hunter, Amy Bach, and Robin Westcott called for the laws requiring for claims transparency to be enacted in every state when they testified before the National Association of Insurance Commissioners last December.

The Consumer Federation of America‘s Robert Hunter made the following suggestion:

Consumers should be entitled to a complete copy of all documents in their claim file. Consumers should be informed they have a right to hire their own public adjuster but that they should be warned to check references, license status and experience before doing so. In cases of a declared natural disaster, appraisals should be optional, not mandatory. Information on when to consider the need to hire an attorney should also be included. Some of this material could be included in the homeowners insurance Bill of Rights proposed below. The California Insurance Code at sections 2071, and 2051.5 provide a reference point for suitable language.

United Policyholder’s Amy Bach made the following proposal:

Giving policyholders the right to review all non-privileged
copies of documents in their claims file.

Florida’s Insurance Consumer Advocate Robin Westcott made the following recommendation:

One recommendation is for companies to maintain all claims files and adjustment records electronically with some interface for consumers/insureds to review and submit documentation. This would allow for key personnel throughout an organization to have access to the claim information. A public interface would also facilitate the ability of the consumer/insured to be more informed and involved in the process and help avoid  disputes resulting from lack of documentation or misinformation. In addition, insurers should provide detailed, itemized claims adjusting estimates, including quantity and price of construction items, so that insureds and their contractors are able to better understand the estimate and identify any areas of disagreement. The claims settlement process is often a mystery to the consumer/insured, even in a non-catastrophe environment. Greater transparency would help demystify the claim settlement process for consumers and bridge the communication gap after a catastrophe.

These are good suggestions for legislation which should be adopted throughout the United States. Honest and ethical insurers that are concerned about their customers and fair play should get behind this consumer movement as well.

Tomorrow, I will outline a plan of action to help make a good idea reality.

  • SHIRLEY HEFLIN

    Dear Chip:

    These are such great “strides” made for INSUREDS! This “stuff” should be available to insureds especially if it involves a pending claim (w/the exception of attorney-client privileged information) and that would be available if a court of competent jurisdiction says so.

    Also, I can’t tell you the countless calls I make on PI files and the ins. co gives you the option of going on-line for a “status” and the info. provided there is USELESS !!

    SHIRLEY HEFLIN
    (Tampa, FL)

  • I think this is brilliant and is the logical progression given the technology that is available to us these days! If you can show proof of insurance with an I-Phone, you should be able to access claims information just as easily through electronic means with a provided log-in and password.

    Shirley, as an agent the information we have access to to check the status of a claim is sometimes just as useless. The claims process should be easier all around so that insured’s, their insurance agents and other advocates are able to see the claim adjusting process from start to end. I think in the event of property losses, it will help create competition as well when the insured is able to see the outcome of the settlement process and is shopping for contractors to make repairs. Not only will it keep the adjusting companies under watchful eye, but the predatory contractors as well.

    Claims are stressful enough for an insured, making the transaction one that they are able to be re-assured in the process gets my vote!