Special Investigations Unit

Merlin Law Group attorney Jason Cieri and I were discussing recent cases in Connecticut. There will be a Connecticut Association of Public Insurance Adjusters meeting tomorrow. One case in particular piqued my interest because a policyholder was awarded a million dollars by a jury following a fire claim where the insurer wrongfully accused the policyholder of arson.1
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All insurance companies have a Special Investigative Unit [SIU] that handles elevated claims. Policyholders may be informed by the claims adjuster that their claim has been transferred to the SIU, leaving the insured confused and perhaps apprehensive. So, what does it mean when a claim has been transferred to the SIU?
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Insurance Codes are regulated by each state, but ask any insurance company representative in any state and they will tell you it is an insurance company’s duty to place the insured’s interest ahead of the insurance company’s interests; and the proper way to handle a claim is to find coverage wherever possible.
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I have heard that a common approach to handling claims by some insurance carriers in Florida is to send a Special Investigation Unit (“SIU”) representative out on all claims where there is a public adjuster involved. When I did insurance defense work much of my focus was on fraud investigations. We worked closely with SIU for various insurance carriers in that regard. If SIU was involved, it typically meant that the insurance carrier felt there was something suspicious about the loss. Sometimes that investigation focused on certain players in certain types of losses and how they all came together and why they were being seen in certain scenarios repeatedly. However, at a recent Florida Association of Public Insurance Adjusters Conference, several public adjusters were discussing how they regularly see SIU involved in typical day-to-day water loss claims for residential properties, and that they are told SIU is there because the policyholder hired a public adjuster. Do the insurance carriers that employ this tactic think that public adjuster involvement in claims is suspicious?


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An insurance company adjuster’s request for invoices of personal property items can be a trap for otherwise honest policyholders. I have been thinking about this topic as a result of Corey Harris‘ post, Notifying the Police in the Case of a Theft Loss, and the weekly highlighted fraud case in Claims Magazine, "Fraud of the Week: Suit Yourself." The basic rule for policyholders to remember is that you are under no obligation to give an insurance company what you do not have and never make up a document because the insurance adjuster says you need it to get paid. For policyholder counsel and public adjusters, protect your client and make certain they are not doing this.


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(*Chip Merlin’s NoteSandy Burnette is a prominent insurance defense attorney with exceptional experience in cases where insurance fraud or arson are suspected. I have known Sandy for 27 years. As you can see from his rhetoric, he is a fierce defender for those engaged in the fight against insurance fraud. Keeping with my Fair and Balanced blog, I invited Sandy to compose a guest post reflecting his views and experience.)

Well, seeing my name mentioned in your recent blog on insurance fraud was certainly enough to capture my attention, but the content of your remarks compels me to respond. Nobody who knows the two of us will be surprised to see we disagree, but in this instance you are simply wrong, Chip.


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