Similar to other states, Arizona has adopted unfair claims settlement practices statutes and regulations. While one cannot a bring a private cause of action under the Unfair Claim Settlement Practices Act1 and its companion regulations, they lay out specific standards for insurers to promptly investigate and process claims.
Continue Reading Arizona Claims Handling Guidelines at a Glance
The “do as much as you can in the aggregate” incentive for adjuster profit maximization versus “estimate more on one claim and get paid more” was the debate in 2015 Congress following Superstorm Sandy flood insurance debacle. This blog followed the last two posts, Churn and Burn Adjusting—An Admission From An Independent Adjuster, and Is “Running and Gunning” Adjusting the Same As “Churn and Burn” Adjusting?.
Continue Reading “Running and Gunning” Versus “Pay More Equals Greater Pay Incentive”
David Charles was a whistle blower about wrongful claims conduct long before yesterday’s post, Churn and Burn Adjusting—An Admission From An Independent Adjuster. In a 2014 post, National Flood Claims Do Not Get Paid Properly Because the Only Incentive is to Underpay, I noted that David Charles described a method of claims adjustment – running and gunning – which is very similar to the one posted yesterday about “churn and burn” adjusting:
Continue Reading Is “Running and Gunning” Adjusting the Same As “Churn and Burn” Adjusting?
The following is a guest blog written by an attendee whom I spoke with at the Windstorm Insurance Conference two weeks ago. I made only minor edits for easier understanding by those who are not claims professionals. I removed two sentences to maintain anonymity for the writer.
Continue Reading Churn and Burn Adjusting—An Admission From An Independent Adjuster
One of the interesting aspects of having a national policyholder insurance practice is seeing regional trends of claims processing by insurers. I have come to my own philosophy that differing insurance laws in the various states, whether statutory or by common law, are not right or wrong—they are just different. I am not so certain about claims practices because pushed to the extreme, there are plenty of ways insurance companies can frustrate the purpose of insurance, such as the use of claims processes designed to delay and underpay claims.
Continue Reading Puerto Rico Hurricane Maria Claims Still Not Paid—New York Times Reports on the Insurance Claims Crisis in Puerto Rico
Governor Gavin Newsom recently signed Senate Bill 240, which enacts new laws that regulate out of state independent adjusters. The law also addresses claim adjustment for declared emergencies. The new laws, described more fully below, became effective on October 3. 2019.
Continue Reading California Enacts New Laws that Regulate Out of State Independent Adjusters and Address Claim Adjustment Obligations for Declared Emergencies
The United States District Court for the District of Minnesota in Selective Insurance Company of South Carolina v. Sela,1 recently addressed whether the implied covenant of good faith includes a broader obligation to act “reasonably” and “properly” in making a decision about whether to pay benefits. Sela had submitted a claim for hail damage to his home. Selective investigated the claim and filed suit alleging that Sela made fraudulent misrepresentations and was not entitled to coverage. Sela counterclaimed for breach of contract, breach of the implied covenant of good faith and fair dealing, and bad faith, pursuant to Minn. Stat. §604.18.
Continue Reading Does the Implied Covenant of Good Faith and Fair Dealing Impose a Broad Duty on Insurers to Act “Reasonably” or “Properly” in Handling Claims?
We’ve all seen it before. The insured files a claim, the insurance company sends out an adjuster to adjust the loss, the loss is more complex, or a situation arises that the adjuster cannot handle so the insurance company forwards the claim to their legal department. At that point, an attorney becomes involved and the adjustment of the claim, as well as the communication between the parties is limited and calculated.
Continue Reading Court Holds Documents Created by Counsel During Claims Handling Were Not Privileged
Insurance is an important product. It is hard for all insurers to get clams handling right after a major disaster and claims accuracy is much less certain. That is what is taught and that is a fact. I could explain that problem and give a pass to the insurance industry and even try to help educate my policyholder friends through this understandable delay and inaccuracy which is almost inevitable.
Continue Reading Why Do Claims Drag On and On in The Panhandle of Florida?
One of the strongest worded notices to insurance companies to pay promptly and do whatever it takes to help policyholders following a disaster came from Florida Insurance Commissioner David Altmaier in a December 19, 2018 memorandum entitled Hurricane Michael Claims Response.
Continue Reading Excess and Surplus Lines Insurers Are Ignoring Florida’s Insurance Commissioner Notice To Do Whatever It Takes