In this second part of Loss Notification for Independent Adjusters were going to discuss what you might consider when writing a loss notification letter to an insured. Well get to claimants in another post. Please read Part I if you haven’t already because it sets some background up for the whole concept of writing these important documents.
The most important part of writing to an insured is to keep the all knowing and ever important independent adjuster mantra in the back of your mind, which is Im an independent adjuster conducting an investigation on behalf of said carrier. Notice the period at the end of that sentence? Its there for a reason.
Were not trying to hide anything from the insured, rather there is nothing to tell or speak with the insured about at this point because independents rarely receive settlement authority without at least one brief report to our client with some form of evidence attached.
Bad faith lawsuits and claims against carriers, independents, and others happen far too frequently for the simple reason that the adjuster couldnt keep quiet. This happens most often when an adjuster feels sorry for a person and thinks it would help to try and ease the insureds concern by saying something aligned with a payment for coverage. This can damage the reputation of independent and staff adjusters alike because promising a coverage that doesnt exist is bound to upset any insured or claimant. Sometimes, when there is clear coverage an insurer may have good reason to deny a claim such as information that responsibility rests with another partys applicable coverage. This is information you may not be privy to in a loss assignment or something that the insured is hiding intentionally. Even then, it is not completely unheard of for an insurers to deny a claim for no good reason, which is exactly why you need to keep an emphasis on your impartial and non-biased view that relates strictly to the facts.
Just as we mentioned in Part I, we see the typical notification to the insured:
Please be advised that this Adjusting Company represents the interests of your Favorite Insurance Carrier in the matter for your claim of damages caused by any peril. John Q. Adjuster will be conducting an investigation of your claim for loss to your loss. We will report the findings back to your insurance company for their consideration and further correspondence will follow from them and / or us. Please do not hesitate to contact us with any questions.
ABC Adjusting Company
First things first. The industry needs to quit advising insured and claimants all together. Insurance adjusters have never been in a position to advise anyone of anything and it appears ethically irresponsible to do so because advising is a job best left to legal counselors; to advise is to provide counsel after all. Even if you hold an AICPCU designation, the job of advising is and always has been better left to attorneys and law professionals. I can only imagine the look on the judiciary’s face when they see you advised an insured on how to handle their claim. No doubt, the defense counsel will tear you to pieces on that one.
Also, using the phrase represents the interests of comes across as a very one-sided and biased concept. Independent Adjusters are not supposed to be biased and both of these phrases within the sentence simply come off feeling awkward and outside the role an adjuster is meant to play in the claim process. To represent the interest of someone is simply to be biased and gives public adjusters and attorneys alike grounds to call independents biased. Of course, this raises the question of whether staff adjusters are biased and that’s a subject for another post.
The correct wording should be less intrusive perhaps using a phrasing similar to We would like to inform you that this Adjusting Company is working alongside your Favorite Insurance Carrierto determine the extent of loss regarding your recent claim for the peril of . This part of the sentence also happens to be where you should state the loss as you understood it in the loss notice including the date of loss, not the loss that the insured tells you it is.
You might even include a sympathy statement if the loss was catastrophic or will be affecting the insureds home or automobile. A good way to state this might be: We sympathize with your loss and will work diligently to provide your insurer with an accurate assessment of the damages.
We discussed the importance of reiterating your impartiality in Part I of this series and were going to say it again in this part. In fact, were going to say it again in all of the parts because its right up there with stating your only purpose as an adjuster is to determine the extent of the damages or liability. A simple statement along the lines of our investigation (or survey) is made without prejudice to the involved partiesand our reports are made based on facts known or discovered is all you need.
The truth is you really shouldn’t care about who is filing what claim against who or how much money is involved that is matter for the parties of the policy to determine. As an independent you are there to help both parties determine the extent of the damages.
These basic elements should help to establish a fair and trustworthy relationship with the insured while establishing your impartiality, humility and respect to the legal profession and generally protecting yourself against poor judgment if you find yourself in hot water.