My weekend reading found me with a recently purchased 1953 2d Edition of Property Insurance Adjusting. The reading worked pretty well for my unplanned recovery of sleep deprivation during the work week. The publication listed a bibliography with a number of General Adjustment Bureau manuals. Being the nerdy collector of insurance lore, I started a search for those manuals which lead me to an article which is the subject of this blog.

In Insurance Thought Leadership, Mike Manes wrote an honest reflection of his 45 years in the insurance business, 2018: A Look Back Before Looking Forward. He started out with the General Adjustment Bureau and noted this claim situation early in his career:

Here are two memories from my first three years in the business that I think personify the best and worst of our industry and, more importantly, suggest a path for differentiation and prosperity for those willing to transform.


On Feb. 14, 1973, I began employment as a claims adjuster at General Adjustment Bureau (GAB) in Baton Rouge, LA. Late that year, I handled a substantial burglary loss in the home of the manager of a major industrial complex. It was a legitimate loss, and in the adjustment process I never sensed any mischief or exaggeration by the claimant.

After interviewing the policyholder, visiting his residence, obtaining pictures of the damages, studying the police report and obtaining an inventory of the loss, I prepared my report and valuation on the loss to the regional claims manager (Vernon) for Republic Vanguard.

Vernon called to explain the “way we do things around here.” He said that, if the policyholder can’t produce a receipt on items lost, we’ll commence negotiations at 50% of actual cash value.

In my next report, I explained that the policyholder was a sophisticated businessman well-respected in the community and was making a legitimate claim. I explained that I believed that, if I acted as instructed, we’d be working through this claim with the insurance commissioner or a judge.
The day Vernon received my letter, he called my boss and said, “This boy is trying to trap me.”

I was not trying to trap him. I was trying to protect a policyholder and to “cover my a___ for when the s____ hit the fan.”

This company was known for ruthless claims handling. The modus operandus was to lowball the settlement offer made by the adjuster and, when things got ugly, blame the adjuster.

In the end, I was vindicated by a newspaper article on the front page of the Baton Rouge Morning Advocate that exposed the ruthless nature of this carrier.

Manes criticized this unethical behavior and then compared it to the experience he had with Chubb:

Harry Chadwick with Chubb introduced himself to me at the cocktail party on the opening night. He was the senior executive in charge…He was a gentleman. He volunteered to me the philosophy of Mr. Chubb and his company.

He said, ‘Mike, Mr. Chubb built this company on two principles:

1. You deny the claim in the underwriting process.

2. You interpret the policy based upon the ‘intent and not the content.’

I represented that program for about eight years – Chubb lived the two principles. The only complaint I heard was when one dentist said, “They pay too much on claims.” This was after a slight rate increase. In my opinion, if every carrier was as “client sensitive” and honorable as Chubb, our industry brand would be more positive than suspect.

While there is some debate about Chubb Corporation losing this culture after its sale to ACE Ltd and being rebranded as Chubb Ltd., I wrote some nice things about Chubb ten years ago in Chubb Calls Competitors Cheap And Unfair:

We rarely find ourselves going after Chubb for underpaid policyholder claims because they sell a great insurance product and usually pay claims. If all insurance companies sold a product that was drafted with full replacement coverage and fewer exclusions and trained their claims adjusters to look for ways to pay claims, our law firm would be broke.

There are many ethical and well-intentioned people working in the insurance industry. Sometimes, like Mike Manes, they may run into unethical management issues that may prevent them from making ethical actions, but I would suggest that agreeing to work in an insurance company, an independent adjustment firm or a third-party administrator does not make a person unethical, mean or evil. Most are good people trying to do an honorable job for a fair wage.

Possibly because many of my contractor and public adjuster friends repeatedly get involved in disagreements with claims adjusters, some seem to gleefully enjoy bashing the insurance company industry and everybody associated in the claims department. Since I only represent frustrated and usually angry insurance company customers, I confess that I also sometimes wrongfully overstate what I know is not true and start referring to the insurance industry and those in it as a whole, saying, for example, “they are trying to wrongfully make claims a profit center.”

This point of view is not right and those of us trying to do our best for policyholders with claims that need to get paid fully and in need of having their structures rebuilt should remind ourselves of it often. I would suggest it would help us in our roles as professionals trying to help insurance consumers if we better understood the job and the roles of those in the insurance industry. It will certainly help us in our one-on-one negotiations and in the stature we carry with the industry regardless of how they view us.

The point of me reading this book and of Merlin Law Group keeping a reference library of older insurance materials, including manuals published by the insurance companies themselves, is to better understand how the insurance product historically is supposed to work and how those in the insurance industry teach and manage themselves about doing their jobs. I am not going to learn about those lessons in case law or in the instructions we find from friends on Facebook.

I am also not going to learn about those things when my eyes are closed or my mind not open to new ways of learning and thinking about how I and Merlin Law Group attorneys can better represent our clients. Concentrating about being our best seems a more positive step than name calling people we have important and significant disagreements we need to overcome.

Thought For The Day

No man ever got very high by pulling other people down. The intelligent merchant does not knock his competitors. The sensible worker does not work those who work with him. Don’t knock your friends. Don’t knock your enemies. Don’t knock yourself.
—Alfred Lord Tennyson

  • Lisa Shepard

    Love the positivity!

    • Lisa,

      Thank you. I am trying to be more that way.

      I certainly am flawed because I am much more of a fighter. But as I get older and
      learn more, being able to truly understand the perspective of the other person
      and even understand what the other person has or should have been taught, helps
      a lot with relationships. I do not have to agree with the other person, but I
      will probably get much farther if I can truly understand.

  • Here’s something else from a 35+ year old manual: “[There is a] requirement to meet the duty of good faith to the insured. The most positive way to do that is to look for coverage in our policies, and not to look for ways to deny coverage.” – 1983 Travelers Insurance Company claims manual, “Analysis of Liability Coverage” section

    • Love this – thank you for sharing

    • Bill,

      I will send this to of the Travelers adjusters I know. There
      are not too many around from 1983.


    Dear Chip:

    I can see how an Attorney needs to “balance” their views of people working in the insurance industry, however, your average policyholder is not exposed to same until they make a claim. An insurance company may have only one shot at proving their genuine worth to an insured. They – through their agents and employees – may only have once chance of showing an insured how much they genuinely care by paying their claim in a timely and good claims handling manner. If the insurance industry makes the most of this chance and does what they’re supposed to do, then the lasting impression will be positive. Otherwise, it will not and that will be what an insured remembers.

    Tampa, FL

    • Shirley,

      I think I agree with you. As I say, most of my clients are coming to me
      frustrated, upset and a little angry. The insurance adjuster and the insurance
      company finally has to perform after the claim occurs and deliver on the
      promise made long before.

  • Great read, keep up the good fight.