Insurance companies routinely argue for immunity from their wrongful actions because acts of their customers are not perfect following a loss. Policyholders are not claims specialists. Policyholders generally are not in the insurance claims business much less the civil litigation business which the insurance industry is the number one participant by far.
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Unlike many other jurisdictions, under Kansas law, an aggrieved insured cannot file a lawsuit against its insurer for “bad faith” as it is not a recognized tort in first-party claims.1 Note that Kansas still recognizes “bad faith” in the third-party context.2
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As we have toured around the country, we have seen states that are very protective of policyholders through extensive claim handling guidelines. Others have very few regulations. While Connecticut has a statute barring unfair claims practices, it is actually an example of the latter.
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Insurance Companies can breach the implied covenant of good faith and fair dealing by failing to pursue adjustment of the claim with reasonable diligence. This means that both insured and insurance companies must pay close attention to the company’s diligence (or lack thereof) in handling a claim.
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Enservio’s director of training, Scott Petlewski, wrote an article Establishing Value on Contents Claims: 3 Bad Habits to Break, which demonstrates that proper contents adjustment is hard work. It can be time consuming, expensive from a labor standpoint, and fraught with error.
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My older son Mason (who will be four years old this December) is learning about the Golden Rule in his preschool class. It got me thinking about whether claims people believe there is a place for the Golden Rule in claims adjusting? Can you honestly sit and reflect on claims you handle and state definitively that you are treating others how you would like to be treated if you were in their shoes?
Hope every mom had a wonderful Mother’s Day. I was at the Tampa Club yesterday with my mother, Alice Merlin.
All estimates of damage, including draft estimates of damage made by adjusters, have been ordered to be produced in a Superstorm Sandy flood damage case.1 Typically, insurance company flood attorneys have made the same arguments they made regarding drafts of engineering reports—“We and our clients do not have them, judge."
The title to this blog probably has many insurance claims managers saying under their breath, ‘No joke, Chip. Tell me something I was not taught on the first week of the job I have been doing for my adult life.’ But, what happens when things go wrong and those undisputed benefits do not get paid—can you get out of this mess without being held accountable? Sorta like being caught “red handed” and praying that nobody is going to call you for the foul. Here is the picture I think of when that happens:
Insurance adjusters are taught to investigate coverage and evaluate damage. Good faith performance requires that this be done in a prompt, thorough, and honest manner. Most adjusters are taught to document what they see in the field through photographs, video, and the collection of evidence. Good faith also requires that the adjusters undertaking this important job be qualified to adjust the loss they are assigned.
