Latest / The Art of Adjusting® Podcast / Episode #85: Negligence Is A Mistake; Bad Faith Is A Pattern

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Episode #85: Negligence Is A Mistake; Bad Faith Is A Pattern · The Art of Adjusting® Podcast

• 0:06
  William Auten: Hello, I'm Bill Auten of Auten Claims Management.
• 0:09
  Chantal Roberts: I'm Chantal Roberts of CMR Consulting, and welcome to the Art of Adjusting Podcast.
• 0:14
  William Auten: Today we're going to talk about life as an insurance adjuster from the perspective of property, auto, liability, or workers' compensation adjusters.
• 0:22
  William Auten: Our goal is to bring interesting topics in the world of claims adjusting to people who are working as an adjuster now and to people who are considering a career as a claims adjuster.
• 0:33
  Chantal Roberts: Hi, Bill.
• 0:33
  Chantal Roberts: How are you?
• 0:35
  William Auten: Good.
• 0:35
  William Auten: How are you?
• 0:36
  Chantal Roberts: Very well.
• 0:37
  Chantal Roberts: Happy New Year.
• 0:38
  William Auten: Happy New Year.
• 0:39
  William Auten: 2026 already.
• 0:40
  Chantal Roberts: I can't believe it.
• 0:41
  Chantal Roberts: I know.
• 0:42
  Chantal Roberts: It's difficult for me to like little wrap my mind around that.
• 0:46
  Chantal Roberts: And I say that every year, but then there you go.
• 0:48
  Chantal Roberts: That's what we have.
• 0:50
  William Auten: And New Year's gets here faster and faster every year.
• 0:53
  Chantal Roberts: Right.
• 0:53
  Chantal Roberts: I don't know why that is.
• 0:54
  Chantal Roberts: Speaking of getting here faster and faster every year, it's like we keep doing these things.
• 0:59
  Chantal Roberts: Like, didn't we just do this yesterday kind of deal?
• 1:01
  William Auten: And the unfair claim settlement practices.
• 1:04
  Chantal Roberts: Yes.
• 1:04
  Chantal Roberts: And actually we kind we kind of did.
• 1:07
  Chantal Roberts: Uh it was episode 76 with Heather.
• 1:11
  Chantal Roberts: It was really late in the season for 2025 because you know me.
• 1:16
  Chantal Roberts: I I love a good theme.
• 1:18
  Chantal Roberts: And usually on New Year's, I want to set that resolution of let's do a great job and put Chantal out of the expert witness career kind of kind of deal.
• 1:31
  Chantal Roberts: Uh by the way, be sure to like, subscribe, share, comment, all of this sort of thing, so that we could get more people listening.
• 1:40
  Chantal Roberts: And uh, you know, if more people listen, then I'm out of a job that much quicker.
• 1:47
  William Auten: So we want to spread spread the learning.
• 1:49
  Chantal Roberts: Yes, spread the learning, absolutely.
• 1:52
  Chantal Roberts: So the reason why we do this every year, besides me being a little snarky saying I want to put myself out of out of business, is because these are the things that will get you in trouble.
• 2:04
  Chantal Roberts: And if you, of course, don't do the things that will get you in trouble, you don't get a lawsuit and your claims don't stay open that much longer.
• 2:16
  Chantal Roberts: The the claims will settle easier if you just take Bill and my advice and uh go from there.
• 2:23
  Chantal Roberts: And that is one of the reasons why we do this every year.
• 2:28
  William Auten: It's it's kind of like a uh cascading effect.
• 2:32
  William Auten: You want to you want to avoid doing this on one claim to avoid that one lawsuit, but you want to avoid it as a pattern because that pattern is going to be pointed to in the in any bad faith lawsuit.
• 2:43
  William Auten: They're gonna say, look, you guys do this over and over and over.
• 2:46
  William Auten: You do the same thing all the time.
• 2:48
  William Auten: You've got this pattern where you are continuously breaking these rules and you're doing it just to save money, and that's bad faith.
• 2:55
  Chantal Roberts: Yes, yes, absolutely.
• 2:57
  Chantal Roberts: And and we're going to be talking about that.
• 3:00
  Chantal Roberts: And of course, you know, I've actually learned a couple of things.
• 3:04
  Chantal Roberts: I went down to Dallas to talk in their insurance day I day, the CPCU I Day.
• 3:10
  Chantal Roberts: And I actually learned a little bit of the history behind the Unfair Claims uh Settlement Practice Act, which I did not know.
• 3:21
  Chantal Roberts: And it had always confused me.
• 3:23
  Chantal Roberts: And so now that I I know it, I want to share this with everybody because I know we just don't have just a few listeners.
• 3:30
  Chantal Roberts: We do actually have more than 10, but they're all over the United States.
• 3:35
  Chantal Roberts: And I also want to always point out that bad faith isn't always a claims issue.
• 3:42
  Chantal Roberts: Because as soon as we start talking about, quote, bad faith end quote, we automatically, I feel that insurance professionals automatically go, oh, this is a claims deal, and I'm an agent or I'm a broker or I'm an underwriter and I don't need to be paying attention to that.
• 3:58
  Chantal Roberts: But I learned some of the triggers that agents can trip or that underwriters can trip.
• 4:07
  Chantal Roberts: And that goes to the administrative rules of the Department of Insurance.
• 4:11
  Chantal Roberts: So we're going to talk about some of that too, which we've never done.
• 4:14
  Chantal Roberts: So this is kind of new in our new year.
• 4:19
  William Auten: Right on.
• 4:20
  Chantal Roberts: Yay! So you know me.
• 4:22
  Chantal Roberts: Uh I love me a good definition to start off so that we always know where we're coming from.
• 4:30
  Chantal Roberts: And I think that that's like the key point.
• 4:33
  Chantal Roberts: So again, just kind of reframing this issue is that negligence is a mistake, it is a mistake, or a mistake is not bad, basically.
• 4:49
  Chantal Roberts: So if you've just neglected to do something once, as a claims adjuster, by the way, uh, that's not bad faith.
• 4:58
  Chantal Roberts: Okay.
• 4:59
  Chantal Roberts: Uh bad faith is a choice, just like you were saying, Bill, you just do it over and over and over again.
• 5:07
  Chantal Roberts: Like you consistently don't send out those 30-day letters, or you consistently lowball, or you consistently don't communicate, or you consistently deny a claim without sending a letter of declination or declination of coverage, however you want to call it.
• 5:26
  Chantal Roberts: Um, you know, that sort of thing.
• 5:29
  Chantal Roberts: And that's when we get into our bad faith.
• 5:32
  Chantal Roberts: Uh, and so who decides?
• 5:36
  William Auten: Who decides whether it's negligence or bad faith?
• 5:39
  Chantal Roberts: Yes.
• 5:39
  Chantal Roberts: Yeah.
• 5:41
  William Auten: Do you know the the well in New York?
• 5:45
  William Auten: Because I'm putting you on the stand in the court.
• 5:48
  Chantal Roberts: Yeah, yes.
• 5:48
  Chantal Roberts: So raise your right hand, Bill, and say I solemnly swear.
• 5:52
  Chantal Roberts: Um, no, yeah, you're absolutely right.
• 5:54
  Chantal Roberts: It it is gonna be in the court systems.
• 5:56
  Chantal Roberts: It's that quote, reasonable person standard or the judge that's gonna be doing it, right?
• 6:02
  Chantal Roberts: And and so it's the trier of fact.
• 6:06
  Chantal Roberts: So I used to, I remember very distinctly when I was a baby adjuster being told uh by the plaintiff attorney screaming at me over the phone, oh, this is bad faith.
• 6:17
  Chantal Roberts: I'm gonna sue you.
• 6:18
  Chantal Roberts: And of course, it's frightening.
• 6:21
  Chantal Roberts: But now that I've been doing it for 25, some odd years, eh, I know, oh, yeah, bless you.
• 6:29
  Chantal Roberts: You're just trying to intimidate me.
• 6:30
  Chantal Roberts: Uh it's really the trier of fact.
• 6:33
  Chantal Roberts: Now you need to know your judicial health holes and and that sort of thing, but there you go.
• 6:39
  William Auten: So Yeah, when I was a baby adjuster, I always had a problem with my pacifier when I took a statement.
• 6:47
  Chantal Roberts: Did you mumble a lot?
• 6:49
  William Auten: I did pull it out and find a place to put it.
• 6:53
  Chantal Roberts: Did you cry?
• 6:55
  Chantal Roberts: Couldn't do it in the afternoons because that was your nap time.
• 6:58
  Chantal Roberts: Listen, let me tell you, nap times uh are are nice.
• 7:01
  Chantal Roberts: I gotta I gotta I gotta tell you.
• 7:03
  Chantal Roberts: So, so yeah, so who who determines these things is the judge or the jury.
• 7:08
  Chantal Roberts: And almost every state has the either the unfair trade practices act and or, well, actually, I think they would have both, um, or and the unfair claims settlement practices act.
• 7:25
  Chantal Roberts: And if you don't have the unfair trade or the unfair claims settlement practices act, specifically for claims, then everything falls under trade practices.
• 7:35
  Chantal Roberts: And this is where I used to get confused.
• 7:38
  Chantal Roberts: So this is the educational part of this that Chantal learned when she was doing her research for Dallas.
• 7:47
  Chantal Roberts: And so originally what everybody had done, like the National Association for Insurance Commissioners had done was had written out the Unfair Trade Practices Act.
• 8:03
  Chantal Roberts: And it mentions in one or two sections, uh, like maybe line 15 or 16 or something.
• 8:10
  Chantal Roberts: Don't quote me on that, I'm making that up.
• 8:12
  Chantal Roberts: You know, don't do bad claim things.
• 8:16
  William Auten: Sure, you know, behave and and be nice to your policy holders.
• 8:20
  Chantal Roberts: Exactly.
• 8:21
  Chantal Roberts: You know, it was like way general, and a lot of it had to do with selling insurance.
• 8:27
  Chantal Roberts: Uh and it was a lot like we respond back to the insured and blah, blah, blah.
• 8:34
  Chantal Roberts: And this is where the agents uh can get tripped up in some bad faith claims in in that particular instance, like not responding to your policy holder when it is reasonably expected that you should respond, quote unquote.
• 8:50
  Chantal Roberts: That sort of thing.
• 8:52
  Chantal Roberts: Not that I think most agents don't because they're they're getting their uh commissions, so that's a whole different thing than what adjusters usually do.
• 9:03
  Chantal Roberts: We we're paid by the hour salaried or whatever, so what I mean, we don't want to ignore people, but I think agents or brokers or producers really, really don't want to do it.
• 9:14
  Chantal Roberts: Anywho, anywho.
• 9:17
  William Auten: Well, uh agents, you know, bad faith applies to many different industries, not just insurance and not just claims, not just insurance as a whole, like underwriting, but also other businesses.
• 9:28
  William Auten: So if you've uh if you're um if you have a landlord-tenant situation, uh, you know, there's opportunities for either or both of them to conduct themselves in bad faith as well.
• 9:39
  William Auten: And that's just being dishonest about things, uh, taking unfair advantage of people, um, all those things.
• 9:45
  William Auten: So when you think about bad faith, just being uh someone who's really misbehaving to their own benefit, uh that's kind of what it is.
• 9:56
  William Auten: And then when you extrapolate that down, or or distill it down rather to the claims operations, um uh when you're a claims professional, you can really see how there could be opportunities for people to act badly on the claims side of things.
• 10:14
  William Auten: And that there are you know ample opportunities for people on both sides to act in bad faith here, uh, insured policyholders as well.
• 10:22
  William Auten: But um, let's face it, the insurance companies are the one writing the policy, uh, contract of adhesion, you know, so they're the ones that are gonna have the burden, uh the greater burden of avoiding bad faith scenarios.
• 10:38
  William Auten: Um and you had laid out the history here.
• 10:41
  William Auten: Uh uh as far as the unfair trade practices laws in the 70s, that was um kind of a broad approach.
• 10:50
  William Auten: Uh again, that's why I bring up the fact that uh bad faith can happen in other industries.
• 10:57
  William Auten: And I think back in the 70s, they were just kind of getting their brains around how to apply this to our industry.
• 11:05
  William Auten: And then uh, so then the NA NAIC model act, what what can you tell me about that?
• 11:12
  Chantal Roberts: Okay, so that one is one of the ones that we as claims adjusters are more familiar with.
• 11:18
  Chantal Roberts: That was passed in the 90s, I believe.
• 11:20
  Chantal Roberts: And if you ever Google it or whatever and pull it up from the National Association of Insurance Commissioners in AI NAIC, it'll say Act 900.
• 11:32
  Chantal Roberts: And then there's also uh Act 902.
• 11:35
  Chantal Roberts: We'll get to that in just a second.
• 11:36
  Chantal Roberts: And again, all of these very much confused me because I believe the unfair trade practice is Act 800.
• 11:44
  Chantal Roberts: I was like, what in the world?
• 11:46
  Chantal Roberts: I mean, because they really do have some of the same languages.
• 11:49
  Chantal Roberts: Anywho, the claims people felt that we're special, as we are, as we are, and we said we need to have basically our own rules, like these are our own rules, and it's it's not enough to just say act properly in the in the um execution of your job as a claims adjuster.
• 12:17
  Chantal Roberts: We we need to get more specific, exactly, and I think this is where we came up with about 10 or so, 11, 12, somewhere around there.
• 12:26
  Chantal Roberts: You know, that is the uh failure to communicate timely, uh explaining insurance coverages, and uh failure to uh pay a claim timely, or failure, or when you deny a claim and you don't quote the policy language.
• 12:46
  Chantal Roberts: I mean, these are all of the things that we've heard before.
• 12:49
  Chantal Roberts: Well, then what happened, as is always the case, is that health insurers booger everything up.
• 12:58
  Chantal Roberts: I'm just gonna say it.
• 12:59
  Chantal Roberts: Health insurers booger everything up.
• 13:02
  Chantal Roberts: And so then we said, okay, we want our very own rules, the property and casualty side of it.
• 13:10
  Chantal Roberts: And so we made the Model Act 902, and several states have adopted 902.
• 13:18
  Chantal Roberts: Several states have not.
• 13:19
  Chantal Roberts: Some of them are still going with 900.
• 13:22
  Chantal Roberts: Uh, some of them go with 902.
• 13:25
  Chantal Roberts: Arkansas happens to be one of the ones that go with 902, which specifically talks about property and casualty.
• 13:33
  Chantal Roberts: And that was done in 97.
• 13:35
  Chantal Roberts: And this is where you will see uh about three or four more lines added, and that's where they start talking about the anti-steering issues, uh, automobile issues, whereas Act 900 didn't have any of that.
• 13:53
  William Auten: So and by steering, that that has to do with collision shops and and and things like that.
• 13:59
  William Auten: Yes, uh, insurance companies directing people to go to shops of their choice rather than uh where the policyholder might want to take it themselves.
• 14:08
  Chantal Roberts: Yes.
• 14:09
  Chantal Roberts: So fun fact also, little fun fact, is that again, uh the industry is changing.
• 14:19
  Chantal Roberts: And I have my issues with preferred vendors, but that's neither here nor there.
• 14:24
  Chantal Roberts: We still have all of these anti-steering, meaning the insurer, the carrier can't steer or direct a policy holder to a repair facility, either in homeowners or in auto.
• 14:39
  Chantal Roberts: However, I have seen the uh policy provision where it says for a reduced premium, you agree to take our repair people.
• 14:52
  William Auten: Right.
• 14:52
  William Auten: Which sounds a lot like you're steering them somewhere.
• 14:55
  Chantal Roberts: It does sound a lot like you're steering them somewhere, but I think they get not okay.
• 15:00
  Chantal Roberts: Let me reword this before I even say it.
• 15:03
  Chantal Roberts: I think they are allowed to do this because it is a contract between the insured and the uh carrier, and presumably the insured would know that they're signing on for this.
• 15:20
  William Auten: Right.
• 15:20
  Chantal Roberts: Also, I have also seen it where for reduced premium you go with our vendors, but remember you have the choice of vendors.
• 15:31
  Chantal Roberts: So if you don't want this, you need to tell us.
• 15:34
  William Auten: And yeah, that doesn't sit quite right with me.
• 15:37
  William Auten: Um if you're offering a discount in premium, so that yeah, like the big issue is gonna be um OEM parts or not.
• 15:48
  William Auten: I mean, that's probably the biggest issue that you're gonna run into when you're comparing uh collision shop that the insurance company is recommending versus somebody else.
• 15:59
  William Auten: And um what you're what you're kind of doing is bribing the insured into the use of you know what some people consider substandard parts.
• 16:12
  Chantal Roberts: So um I don't have any skin in that game because we don't handle those claims here, but I did an article for Bankrate about preferred vendors and bluntly stated my belief because I could do that at Bankrate.
• 16:29
  Chantal Roberts: And which is that I don't particularly care for them because I can do it at on the podcast too, because whatever the policy says is what goes.
• 16:38
  Chantal Roberts: I mean, if that's what the policy says, then that's what you gotta do.
• 16:41
  Chantal Roberts: So don't quote me like all you other attorneys trying to like retain me and go, gotcha, because that's what you said on your podcast, blah blah blah.
• 16:49
  Chantal Roberts: No.
• 16:50
  Chantal Roberts: Anywho, uh what we're what we're talking in this particular instance is that we can go in there and have these vendors and the history of it is just like the health carriers, where they have preferred doctors, that's how the the property and casualty insurers got the idea.
• 17:19
  Chantal Roberts: Oh, well, if we can have pref if they can have preferred doctors that someone can go to and we pay them a lower rate, then we can have preferred shops.
• 17:29
  Chantal Roberts: That's how that all started with the preferred shops.
• 17:32
  Chantal Roberts: Interesting.
• 17:34
  Chantal Roberts: Yeah, yeah.
• 17:35
  Chantal Roberts: So there you go.
• 17:38
  William Auten: Anyway, well, the preferred contractors have have similar problems.
• 17:42
  William Auten: I recall, I don't remember the case specifically, but the trial was on YouTube.
• 17:47
  William Auten: So I watched it.
• 17:48
  William Auten: And um it was a uh carrier that assigned um a contractor, so it was like a preferred preferred vendor thing.
• 17:59
  William Auten: Um and it just got way out of hand.
• 18:02
  William Auten: They it was the claim was the the claim and the repairs were so badly mismanaged by both the carrier and this contractor that um and it wasn't a bad faith case.
• 18:14
  William Auten: I think what it was is I think it was around mold coverage.
• 18:17
  William Auten: And and uh the delays in in the contractor's you know performance are really what caused the the problems to arise.
• 18:28
  William Auten: Uh anyway, my theory is if you're in the business of insurance, stay in your lane.
• 18:35
  William Auten: You're not a collision shop, you're not a contractor, don't try and fix houses, don't try and fix cars.
• 18:41
  William Auten: Your job is to indemnify for those damages.
• 18:45
  William Auten: And if you're going to find ways to cheap out on it so that you can save money, I think that's a little shady.
• 18:54
  William Auten: And if you're gonna bribe your policy holders by giving them a discount, I think that's pretty shady too.
• 19:01
  William Auten: That's my opinion.
• 19:03
  Chantal Roberts: I I this is one of the ones where you and I agree.
• 19:06
  Chantal Roberts: We actually agree.
• 19:08
  Chantal Roberts: And and in this particular instance, I know what the carriers are doing.
• 19:12
  Chantal Roberts: You know, they're trying to control that loss adjustment expenses, and we're getting way off topic, so we got to go back.
• 19:18
  Chantal Roberts: However, however, it it it does tangentially apply to our bad faith talk.
• 19:28
  Chantal Roberts: And that is adjusters, be aware of what's going on in your state.
• 19:33
  Chantal Roberts: If you have anti-steering rules, what your policy says.
• 19:37
  Chantal Roberts: I always found it difficult being an adjuster when I handled auto claims, because invariably the insured would say, I don't know where to take my car to get it fixed.
• 19:51
  Chantal Roberts: Where do you suggest?
• 19:53
  Chantal Roberts: And I would always, if if I absolutely positively could not use.
• 19:59
  Chantal Roberts: Get out of it.
• 20:01
  Chantal Roberts: Like my feet were being held to the flame.
• 20:04
  Chantal Roberts: I would give them three choices.
• 20:06
  Chantal Roberts: And you have to pick.
• 20:08
  Chantal Roberts: It's your car.
• 20:09
  Chantal Roberts: But here are three choices.
• 20:11
  Chantal Roberts: I'm not saying that.
• 20:13
  Chantal Roberts: And of course, I documented the claim file saying I did not recommend anything.
• 20:17
  Chantal Roberts: I gave them the three choices.
• 20:20
  Chantal Roberts: So anyway, okay.
• 20:22
  Chantal Roberts: So we're talking about handling claims under these unfair and deceptive.
• 20:28
  Chantal Roberts: And I can see why it would be considered that way.
• 20:30
  Chantal Roberts: Because I I've seen a couple of bad faith claims come through where the initial remediator, according to the policy holders' belief, has quote messed up and quote the the property because they didn't do their work right.
• 20:51
  Chantal Roberts: And and so, however, on the flip side, I do think there's a call for sending a remediator out immediately.
• 21:00
  Chantal Roberts: Okay, we're off topic.
• 21:01
  Chantal Roberts: Okay, so anywho, hey, we're going, we're moving on.
• 21:04
  Chantal Roberts: This is this is like a whole nother topic, a whole nother podcast topic.
• 21:08
  Chantal Roberts: Okay.
• 21:09
  William Auten: Yeah, because well, yeah, and and because you get go down the rabbit hole of deceptive contractors, deceptive public adjusters, and attorneys and lawsuits against insurance companies, and that's gonna be that'll be a whole other podcast.
• 21:22
  Chantal Roberts: So yes, whole nother podcast.
• 21:23
  Chantal Roberts: Okay, so claims handling rules can live under the Unfair and Deceptive Practices Act.
• 21:29
  Chantal Roberts: Uh you know, we do have our state because states are the ones who contract with or who control insurance.
• 21:38
  Chantal Roberts: So each state is going to be different.
• 21:40
  Chantal Roberts: And I don't know if I did mention, by the way, those states that don't follow any of the model acts.
• 21:48
  Chantal Roberts: Uh some of them are like Wash Washington, D.C., uh uh Iowa, because Iowa's weird.
• 21:54
  Chantal Roberts: I mean, I can say that I'm married to an Iowan, um, Nevada, Oklahoma, and Alabama.
• 22:02
  Chantal Roberts: Uh oh, Mississippi.
• 22:03
  Chantal Roberts: Mississippi is weird too.
• 22:05
  Chantal Roberts: So, I mean, you know, come on.
• 22:06
  Chantal Roberts: Um so those are gonna be some, and and actually I'm gonna talk a little bit about Oklahoma in a bit because while they don't follow some of the model acts, what they do is they have in their statute some of the things that, for example, Kansas or Arkansas has as an administrative rule from the Department of Insurance, which is again one of the things that I learned about when I was doing all this research.
• 22:35
  Chantal Roberts: So, yay.
• 22:36
  Chantal Roberts: Yeah.
• 22:38
  William Auten: Right on.
• 22:38
  William Auten: Yeah.
• 22:39
  William Auten: So um seven claim handling standards.
• 22:43
  William Auten: So we've got seven rules here for adjusters.
• 22:48
  Chantal Roberts: Right.
• 22:48
  Chantal Roberts: And like I said, I think there's like, I don't know, 11, 12, something like that, but they can usually be boiled down into seven.
• 22:55
  William Auten: Yeah.
• 22:56
  William Auten: Yeah, these these seem pretty comprehensive, but uh for preliminary claims handling, what do we do?
• 23:03
  Chantal Roberts: You just we you gotta investigate promptly.
• 23:05
  Chantal Roberts: You don't let it sit for, I don't know, weeks on end.
• 23:11
  Chantal Roberts: And I know of an insurer and I cringe when whenever I talk to this adjuster, and this adjuster is telling me how the it their company doesn't have their own IT system for claims, and so it cost 500 bucks or whatever to have the third-party people uh update their claim system, right?
• 23:40
  Chantal Roberts: And so they wait until the end of the month and give them all of the IT tickets at one time to update, and that means adding a new customer or writing a check or whatever, and so this adjuster can get a claim, but the claim doesn't even come into the claims system because that let's say client hasn't been input yet, or they don't have the correct data fields and they have to get IT to add the data fields, and so we're already a month late.
• 24:17
  Chantal Roberts: So the adjuster is do I do I start adjusting and keep notes somewhere else?
• 24:24
  Chantal Roberts: Kind of cringy, uh, or do I not do anything until it's all set up?
• 24:32
  Chantal Roberts: All it that's very bad.
• 24:34
  Chantal Roberts: So, you know, and I just sit there and scream at his employers who can't hear who can't hear me, excuse me.
• 24:43
  Chantal Roberts: Oh my god, fix it immediately.
• 24:45
  Chantal Roberts: You have no idea.
• 24:48
  William Auten: You and I probably came up in an age where paper files were kind of the primary way to manage a file.
• 24:55
  William Auten: And uh all of our written notes and everything went in there, and the communication on screen was just kind of administrative.
• 25:05
  William Auten: It wasn't really considered the claim file until oh, probably not too long after, say 98, 99, that around that time is where the system started to get a little more robust where you could put all those things in there.
• 25:23
  William Auten: I think our first digital cameras came in around 1999.
• 25:26
  William Auten: Um, they were around before then, but the right they they weren't generally used for uh claim purposes until around 99 from Mike's.
• 25:35
  Chantal Roberts: They weren't very good.
• 25:36
  Chantal Roberts: They were they were slow and they were pixelated, low low quality and um memory running through my foggy mind.
• 25:48
  Chantal Roberts: I don't even know the words.
• 25:49
  William Auten: Okay, I do now.
• 25:52
  Chantal Roberts: Oh, no, I don't know those.
• 25:53
  Chantal Roberts: I I don't know if those are the words, I just know that memories uh claim procedures.
• 25:57
  Chantal Roberts: Okay, so this is something that I really do not see in a lot of files, and and I mean as an expert witness, and the carriers will swear up and down that they have management oversight.
• 26:15
  William Auten: Okay, first to clarify what it is though.
• 26:17
  Chantal Roberts: Claim procedures means oh, like adjusters are trained and there's management oversight, right?
• 26:24
  William Auten: Right in and and oh document your training and document that a manager has been in the file and is watching what you're doing.
• 26:32
  Chantal Roberts: Exactly.
• 26:32
  Chantal Roberts: And I'm more speaking to having management supervision because I cannot I could probably count on one hand for my expert witnessing career, which is only six years, but how many times I've seen a manager in the file.
• 26:55
  Chantal Roberts: Now I've seen something that's as the kids these days say, super sus, which is suspicious, where I will get this file and there's the adjuster's notes, and then in red, there's the manager notes.
• 27:13
  Chantal Roberts: And I'm thinking, I you mmm, that kind of looks like you added that a little later.
• 27:18
  Chantal Roberts: I don't know.
• 27:19
  Chantal Roberts: I'm just I'm just saying I don't I don't know.
• 27:23
  Chantal Roberts: However, we have to have management supervision.
• 27:27
  Chantal Roberts: So if you have that round table, like I I will see an adjuster note saying round table with so and so, but so and so doesn't also have their round table notes in there.
• 27:40
  Chantal Roberts: Now I get the fact that we want to keep our round table notes usually very general, you know, because there's stuff that we're talking about.
• 27:49
  Chantal Roberts: But you would say roundtabled with Tom, Dick, and Harry, we discussed reserves and bodily injury of plaintiff.
• 28:01
  Chantal Roberts: Boom.
• 28:01
  Chantal Roberts: That's what you talked about, and then Tom, Dick, and Harry need to be putting their notes in there.
• 28:07
  Chantal Roberts: Had a round table with uh Dick, Harry, and Jane, blah, blah, blah.
• 28:15
  Chantal Roberts: You see what I'm saying?
• 28:16
  Chantal Roberts: And so those notes need to be in there, and so often I don't see them unless there is a complaint, and which is, you know, insured called, I returned their call, told them that the claims adjuster's doing whatever and blah blah blah.
• 28:33
  Chantal Roberts: That's not it.
• 28:34
  Chantal Roberts: You're supposed to be overlooking, and not just once or when the file's closed or whatever, but that would really keep people from getting off the tracks, so to speak.
• 28:46
  William Auten: Yeah.
• 28:47
  William Auten: Um, so the uh when you say management, heavy management supervision, so define that versus somebody, uh a manager getting in the file and maybe giving some direction.
• 28:59
  Chantal Roberts: I think that is the the management supervision.
• 29:01
  William Auten: Okay.
• 29:01
  William Auten: Okay.
• 29:02
  William Auten: Um I thought you meant maybe you were talking about something else, like overall.
• 29:05
  Chantal Roberts: No, no, I think uh I'll give you an example, what we used to do at ARM.
• 29:11
  Chantal Roberts: Uh, and and this wasn't in the initial note, but when we would assign a claim to the adjuster as the manager, we would send the adjuster note along with the claim setup people.
• 29:26
  Chantal Roberts: We're like, okay, this is a general liability claim.
• 29:28
  Chantal Roberts: It says slip and fall.
• 29:29
  Chantal Roberts: You need to do a recorded statement of the insured, of the claimant, of the witnesses, get cleaning logs, get any film or camera, da da da da blah, blah, blah.
• 29:41
  Chantal Roberts: And we would tell them what to do.
• 29:43
  Chantal Roberts: The file's not set up, so we can't necessarily put that back in the file yet because we're giving them instructions prior to the file.
• 29:51
  Chantal Roberts: However, then what we would do is seven days after the file had been open, we're doing our as a manager first report review.
• 30:02
  Chantal Roberts: Has the uh adjuster reviewed and explained the policy language?
• 30:08
  Chantal Roberts: Yes, no.
• 30:09
  Chantal Roberts: Are there any coverage concerns?
• 30:11
  Chantal Roberts: Yes, no.
• 30:12
  Chantal Roberts: What are they?
• 30:13
  Chantal Roberts: I'm seeing uh the insured, I don't know, um has a endorsement that says they have to clean it every hour and they didn't do it.
• 30:26
  Chantal Roberts: So you need to send out a reservation of rights letter, except in New York where you would send out a what is it called?
• 30:32
  William Auten: Um conditional disclaimer.
• 30:35
  Chantal Roberts: Yeah, we wouldn't I don't think we would for that necessarily might be late reporting or I don't know, something you you you know what I'm at a minimum we would get a non-waiver, yeah.
• 30:45
  Chantal Roberts: And and we would be okay, it's it's late notice, let's do that.
• 30:49
  Chantal Roberts: Late notice.
• 30:49
  Chantal Roberts: Oh, you need to send out uh ROR for late notice because this happened eight months ago, and I don't see you doing that anywhere.
• 30:57
  Chantal Roberts: Did you explain it?
• 30:58
  Chantal Roberts: And so, and then in 30 days we're we're sitting there going, why haven't you done this?
• 31:04
  Chantal Roberts: Why haven't you done that?
• 31:05
  Chantal Roberts: What are what is the answer to this?
• 31:07
  Chantal Roberts: What is the answer to that?
• 31:08
  Chantal Roberts: Have you thought about doing XYZ?
• 31:11
  Chantal Roberts: Because as someone who has 25 years experience and someone who has five years experience, I'm trying to keep them on the track without going off to the side.
• 31:23
  Chantal Roberts: And I can tell you, I've had younger adjusters come up to me and I've read the insured's correspondence, and I said, there is an attorney back there somewhere because that person doesn't know those words, and they are pushing all of the right buttons, so they are getting ready to set us up for bad faith, and we need to be very, very careful here because they're talking about blah blah blah, and da-da-da-da.
• 31:58
  Chantal Roberts: I mean, I mean they're pushing all of the bad faith buttons, and and so you can see it coming a mile down the road, and then this is how you would cut it off.
• 32:08
  Chantal Roberts: One short other example of a case that I'm working right now.
• 32:16
  Chantal Roberts: The insured maybe a little unreasonable and a little self-centered, and you're waffling here, just say it like it is, Shanty.
• 32:37
  Chantal Roberts: Well, it's an active case, so I don't want to go too far.
• 32:42
  Chantal Roberts: Uh but uh concrete example, I mean, the adjuster's father died, and the insured actually wrote a letter or an email into the into the carrier saying, I don't care.
• 32:57
  Chantal Roberts: Why isn't my claim being handled by someone else?
• 32:59
  Chantal Roberts: And I'm like, wow, okay.
• 33:02
  Chantal Roberts: Anywho, uh so you got that, but then no one responded to it from the carrier side, and that uh antagonized the insured even more because then the insured didn't feel heard.
• 33:24
  Chantal Roberts: And this is antagonism goes goes both ways, it does go both ways, and and so I think that's one of the next points is communication, it has to be timely, uh clear, forthright.
• 33:38
  Chantal Roberts: And I have skipped one, but that's okay because it kind of bleeds into this and easy to understand.
• 33:43
  Chantal Roberts: And usually you have to only respond to things that reasonably need a response.
• 33:53
  Chantal Roberts: So if the insurance says, I don't care that my adjuster's father died, what's going on with my claim?
• 34:00
  Chantal Roberts: Do you do you need to respond to that?
• 34:05
  William Auten: I don't know.
• 34:05
  William Auten: It could have been asked better.
• 34:06
  William Auten: It could have been, um, you know, I'd I'd like to, you know, I'm I'm sorry to hear about the passing of the adjuster's father.
• 34:12
  William Auten: I would like to get a status of my claim.
• 34:15
  Chantal Roberts: Right.
• 34:15
  William Auten: That's one way to handle it, too.
• 34:17
  William Auten: Um true.
• 34:18
  Chantal Roberts: But the point is, is that even acknowledging the insured saying, I understand that uh you are impatient to find out the status of your claim as diplomatically as possible, then she or he would at least feel heard.
• 34:43
  William Auten: Right.
• 34:43
  Chantal Roberts: And that's part of the communications aspect.
• 34:45
  Chantal Roberts: And it has to be timely, uh clear, forthright, and easy to understand.
• 34:51
  William Auten: So that's number four.
• 34:52
  William Auten: It's just to summarize where we are in these seven rules.
• 34:55
  William Auten: Uh, preliminary claims handling, be prompt, uh claim procedures.
• 35:00
  William Auten: Uh you have trained adjusters that are managed, investigation.
• 35:03
  William Auten: Um, investigations tailored to each claim, meaning that you're not going to just have a boilerplate uh list of things to do for every claim.
• 35:12
  William Auten: We need some guidance and you have to be kind of tailored to the situation at hand.
• 35:16
  William Auten: And then communications must be timely, clear, forthright, and easy to understand.
• 35:21
  William Auten: There's three left here.
• 35:23
  Chantal Roberts: I know, but I want to mention one thing because I was doing a little uh I'm trying to make an assignment for my risk and management students 101, basically, because a lot of them are just saying, well, why don't we just plug in the policy into AI and let it tell us what coverages are?
• 35:46
  Chantal Roberts: And I and I said, you know what?
• 35:48
  Chantal Roberts: That sounds like a great idea until it's not, because it uh hallucinates, it you know, it eats shrooms every once in a while, and that sort of thing.
• 35:57
  Chantal Roberts: So maybe not a good idea.
• 35:59
  Chantal Roberts: And I had come across an article that talked about an insurer, I won't mention who it is, but they were using AI to write all the letters, their 30-day letters.
• 36:16
  Chantal Roberts: And the quote was the adjusters are too busy to write it, so we're having AI write it.
• 36:22
  Chantal Roberts: And I'm like, oh, oh, and that was actually from a state uh from a spokesperson.
• 36:28
  Chantal Roberts: And I'm like, oh, this is why true, while true, you don't say that, but also they were the spokesperson actually said the reason they're using AI is because when cumans adjusters wrote the letters, the 30-day letters, it was too complicated with too much insurance jargon.
• 36:50
  Chantal Roberts: And what the adjusters are supposed to be doing is using AI to write the letter, review it, make sure that it makes sense, and then shipping it off.
• 37:00
  Chantal Roberts: But they're not doing that because adjusters are too busy.
• 37:03
  Chantal Roberts: So anyway, FYI, it's got to be clear and easy to understand.
• 37:08
  William Auten: Yeah, yeah.
• 37:08
  William Auten: So they they were they were trying, um trying to to uh to address that piece of it.
• 37:15
  William Auten: Uh so kudos to them.
• 37:17
  William Auten: Um, you know, right having AI write the communications to the policy holder.
• 37:24
  William Auten: If it's a general communication, um, like we've received your damage estimate and it's currently under review, that kind of thing.
• 37:32
  William Auten: Um, I don't see a problem with that.
• 37:35
  William Auten: If uh if you're relying on it to make heavy-handed decisions about coverage um or damages, I think that's gonna get you in the hot water pretty quick.
• 37:44
  William Auten: It has been.
• 37:45
  Chantal Roberts: Let's talk about momentum because this is where I see it most often, where things usually go off the rails.
• 37:52
  Chantal Roberts: Adjusters are busy, we all know that.
• 37:56
  Chantal Roberts: And there should be no unexplained delays in the claim file, right?
• 38:02
  Chantal Roberts: Your dad dies.
• 38:03
  Chantal Roberts: Okay, I mean, you're not gonna put in every single claim file.
• 38:07
  Chantal Roberts: My dad died, I'm taking a week off, you're not gonna do that.
• 38:10
  Chantal Roberts: But there shouldn't be three months of no file activity for nothing.
• 38:19
  William Auten: Right.
• 38:20
  Chantal Roberts: Again, another example would be let's say our date of loss is April 1st, and you're not cutting a check until December 15th.
• 38:33
  Chantal Roberts: Why?
• 38:34
  Chantal Roberts: I gotta, I why?
• 38:38
  Chantal Roberts: This is my first question.
• 38:39
  Chantal Roberts: Why did what uh eight months go by?
• 38:43
  Chantal Roberts: With with without you, I mean, and and there's nothing in the letters, there's nothing in the claim notes that says why.
• 38:54
  Chantal Roberts: You're also not making a decision slash resolution or analysis, which is the next one, analysis right after momentum, because that's you're documenting damages and applying them to coverage.
• 39:07
  Chantal Roberts: Because by the way, you got to look at coverage five or six different times in the claim file.
• 39:12
  Chantal Roberts: Every time you get a new piece of information, you're looking at coverage to see how things change.
• 39:19
  Chantal Roberts: It's not just the first day.
• 39:22
  William Auten: Momentum just means uh primarily demonstrating that that you are working the file in some way.
• 39:30
  William Auten: Um that it doesn't mean you have to settle the claim within a certain time frame if you don't have the information, but at least show that you're doing something to get the information.
• 39:41
  William Auten: Uh, we have a lot of cases that linger because somebody is continuing to treat and our file is open for six or eight months sometimes, and the attorney just ignores us.
• 39:53
  William Auten: What are we gonna do?
• 39:55
  William Auten: Document the file.
• 39:56
  William Auten: We tried, you know, we left messages, sent another.
• 39:59
  William Auten: Follow-up email, it's the best you can do.
• 40:02
  William Auten: Um and it but that's a reasonable delay because this person is not ready to finalize their claim yet, they're still recovering from a very bad injury, you know.
• 40:14
  William Auten: So anyway, that's that's momentum um analysis.
• 40:20
  William Auten: Um so that comes to documenting damages and applying the coverages.
• 40:26
  Chantal Roberts: Yeah, and and I mean I think that that's kind of self-explanatory.
• 40:31
  Chantal Roberts: You get that estimate in or whatever, and you write that down in the file, and then you apply the analysis.
• 40:42
  Chantal Roberts: Is there coverage?
• 40:44
  Chantal Roberts: Is there not coverage?
• 40:46
  Chantal Roberts: Why?
• 40:47
  Chantal Roberts: Why not?
• 40:48
  Chantal Roberts: How much are we going to pay?
• 40:49
  Chantal Roberts: And then that leads right up into sometimes into the same file note of what your decision is.
• 40:55
  Chantal Roberts: Yes, I'm gonna pay, no, I'm not gonna pay.
• 40:58
  Chantal Roberts: I need to deny the claim.
• 41:00
  Chantal Roberts: And uh again, it it needs to be a lot more detailed than what I am now seeing in claim files, because a lot of times uh what I am seeing in claim files is got the estimate from Jane Smith, the independent appraiser or field appraiser or whatever, and uh it's for blah blah blah, you $1,000, sent out a proof of loss and letter to the injured.
• 41:36
  Chantal Roberts: Well, that doesn't tell me anything.
• 41:38
  Chantal Roberts: Is it covered?
• 41:39
  Chantal Roberts: Is it not covered?
• 41:40
  Chantal Roberts: Why?
• 41:41
  Chantal Roberts: What's the deductible?
• 41:42
  Chantal Roberts: So usually what you should be doing is got the estimate, it's for location number one, which is da da da.
• 41:52
  Chantal Roberts: There's coverage for that one and this poly, you know, and because again, you're looking at coverages, and then you go in the estimate is for a thousand dollars, everything is within coverage, like there's no mold that would have a mold exclusion or I don't know, whatever, and uh less you're five dollar deductible.
• 42:13
  Chantal Roberts: So I'm gonna write a check for $995 to the insured, Mr.
• 42:20
  Chantal Roberts: Insured, Mrs.
• 42:21
  Chantal Roberts: Insured, and mortgage holder, and sending them a letter and a proof of loss and blah blah blah.
• 42:30
  Chantal Roberts: And then you pick up the phone and call them and tell them all of that, too.
• 42:33
  Chantal Roberts: So you that's the difference.
• 42:35
  Chantal Roberts: And I'm gonna I will explain this.
• 42:38
  Chantal Roberts: There, there is a reason why I'm harping on your claim note being that detailed.
• 42:45
  Chantal Roberts: I'll get to it.
• 42:46
  Chantal Roberts: I promise.
• 42:47
  Chantal Roberts: I promise.
• 42:49
  William Auten: Um so one thing I would add to the analysis line is liability.
• 42:54
  Chantal Roberts: Um yeah, yeah.
• 42:56
  Chantal Roberts: Well, if it's liability, absolutely.
• 42:58
  Chantal Roberts: Yeah, yeah.
• 42:59
  William Auten: Yeah, so you you have to analyze liability, analyze damages, and then uh see how all of that fits into coverage.
• 43:07
  William Auten: Um and when we when we talk about liability versus uh coverage on on third-party claims, that's an important conversation to have both with the policy holder and with the uh actually with the claimant as well, so that they understand.
• 43:24
  William Auten: Look, we're not saying necessarily that the insured didn't do anything wrong here.
• 43:30
  William Auten: They absolutely did something that was wrong or negligent.
• 43:34
  William Auten: It just turns out that there's no coverage.
• 43:36
  William Auten: So that doesn't mean that you don't have uh, you know, a valid claim.
• 43:42
  William Auten: We wouldn't actually say, you know, oh yeah, you got a great claim.
• 43:45
  William Auten: Go ahead and and sue the insured.
• 43:46
  William Auten: Yes, sue the insured no coverage, but go ahead.
• 43:49
  William Auten: No, we don't do that.
• 43:51
  Chantal Roberts: Be our guest.
• 43:52
  William Auten: But that's a that's a dance you've got to do.
• 43:55
  William Auten: You've got to have a conversation that's uh uh about those facts, and you've got to be able to say, okay, here's a situation.
• 44:03
  William Auten: We know Mr.
• 44:04
  William Auten: Insured did something that may or may not have caused harm or damages to you.
• 44:09
  William Auten: Uh the details of that will be worked out later, and we can't really comment on that.
• 44:14
  William Auten: But what we can comment is that what was done here does not fall under a covered occurrence or whatever, and is not covered under the policy.
• 44:22
  William Auten: So we can't defend the insured and we can't indemnify them for any damages that they might owe.
• 44:28
  William Auten: That's the best it's a lot of words, right?
• 44:30
  William Auten: Right.
• 44:31
  William Auten: You say that to some you say that to somebody who who has no background in insurance claims, they're gonna be like, Why are you talking to me like you're a lawyer?
• 44:40
  William Auten: I'm I don't, you know, why don't you just tell me straight up what you mean?
• 44:44
  William Auten: And there's no easy way to do it because this is kind of a complicated business.
• 44:49
  William Auten: Um anyway, that's my aside on analysis.
• 44:53
  Chantal Roberts: I have so many thoughts.
• 44:54
  Chantal Roberts: No, and and I love this that you said that because it brings up a very good point.
• 44:59
  Chantal Roberts: And it's something that I tell my students, showing them that even I was I even I am human, is that Professor Roberts it probably took me a good 10 years, even though I knew it innately, I couldn't put words to it.
• 45:18
  Chantal Roberts: That liability is a two-step process.
• 45:21
  Chantal Roberts: You have coverage and then you have liability.
• 45:24
  Chantal Roberts: And unless you have both of them saying yes, is their coverage yes?
• 45:30
  Chantal Roberts: Is is the insured negligent or is the insured liable?
• 45:34
  Chantal Roberts: Yes, that's the only time you would pay.
• 45:36
  Chantal Roberts: Is there coverage no, but the insured is responsible?
• 45:39
  Chantal Roberts: You don't pay because there's no coverage.
• 45:41
  William Auten: The insurance company doesn't pay.
• 45:43
  Chantal Roberts: Well, the insurance company doesn't pay.
• 45:45
  William Auten: And that's the distinction that a lot of people don't even know break.
• 45:50
  Chantal Roberts: Right.
• 45:50
  William Auten: They don't, they think they're in they're suing the insurance company, right?
• 45:54
  Chantal Roberts: And and and the thing is, is that so many consumers don't understand it's a two-step process.
• 46:01
  Chantal Roberts: So even if the adjusters don't understand it as a two-step process, think about the consumers.
• 46:05
  Chantal Roberts: And to answer your question about you're using all of these big technical terms, I always, when I'm speaking again to my to my students, I do this, I use the insurance word, and then I use the common everyday word.
• 46:23
  Chantal Roberts: Subrogation, I mean reimbursement.
• 46:26
  Chantal Roberts: So how would you describe payment?
• 46:30
  William Auten: Describe indemnity uh in you know in I mean indemnity is not terribly um it is hard word complicated, but um how would you just how would you kind of simplify the word indemnity when you've got um when you've got contractual indemnity uh between a landlord and a tenant, for example, um, and you've got to explain that concept to someone who's not an insurance person, it's not easy to do all the time.
• 46:59
  Chantal Roberts: It it is not all all the time easy, and that's when you would go, okay, so you've written so you've signed a contract that says that you are going to indemnify, which means pay your landlord if something happens to the property.
• 47:13
  Chantal Roberts: That's how I would do it.
• 47:17
  William Auten: That's and this is the this is the word game we have in this job every day.
• 47:22
  William Auten: Absolutely.
• 47:25
  Chantal Roberts: Oh, there's like even explaining liability.
• 47:29
  Chantal Roberts: Oh, you're liable, you're negligent.
• 47:31
  Chantal Roberts: Well, okay.
• 47:32
  Chantal Roberts: Anyway, let's move on.
• 47:33
  Chantal Roberts: Because but uh by the way, this does go to communication and being able to speak plainly and in a term that's understandable, which is again why it's easier to have these phone conversations and then maybe put the letter a little bit more formal.
• 47:56
  William Auten: Right.
• 47:57
  Chantal Roberts: Um, so anyway, uh I'm not gonna go over timing and stuff because I think a lot of people do, and and we're probably you know running out of time or or whatever.
• 48:06
  William Auten: Uh but we should put your uh seven claim handling standards in the show notes.
• 48:13
  Chantal Roberts: Oh, yeah, yeah.
• 48:14
  William Auten: That'd be a good idea.
• 48:15
  Chantal Roberts: Okay.
• 48:15
  Chantal Roberts: And and so we all know as adjusters that there are timelines that we have to meet and deadlines that we have to meet.
• 48:24
  Chantal Roberts: We have to pay within 30 days, or if we can't do that, like what Bill was saying, you you send out a letter, and I was talking about the 30-day letter.
• 48:33
  Chantal Roberts: So what we also need to do with our issues again, making sure that our file is properly documented and everything.
• 48:48
  Chantal Roberts: This is I'm gonna kind of skip or combine number six and seven for for us, Bill, since we're kind of running out of time.
• 48:54
  Chantal Roberts: Sure.
• 48:55
  Chantal Roberts: I wanted to talk about Oklahoma.
• 48:57
  Chantal Roberts: And this is part of the thing that I learned about when I was, you know, looking into this Dallas uh talk that I was doing.
• 49:05
  Chantal Roberts: And so Oklahoma has a statute, because remember, Oklahoma doesn't adhere to the model laws, they have their own gigs.
• 49:15
  Chantal Roberts: And one of the statutes in Oklahoma is that an insurer's claim file shall be subject to an examination by the insurance commissioner.
• 49:26
  Chantal Roberts: Every single law in every single state that I've ever read has that rule.
• 49:31
  Chantal Roberts: Okay, whether it's in the unfair trade practices, unfair claim settlement practices, whatever.
• 49:37
  Chantal Roberts: Such files shall contain all notes and paper work papers pertaining to a claim in such detail that pertinent events and the dates of such events can be reconstructed.
• 49:51
  Chantal Roberts: So let me tell you what that means.
• 49:54
  Chantal Roberts: That does not mean copy the email that you just got sent and put that all in the claim file full.
• 50:03
  Chantal Roberts: You put the the email into the claim file, but you don't cut and paste that email.
• 50:10
  Chantal Roberts: What they're talking about in such detail, pertinent events that such events can be reconstructed.
• 50:15
  Chantal Roberts: What they're talking about is your mental interpretation of that, so that if you got struck down by a bus, God forbid, we could pick up the file and handle it.
• 50:30
  Chantal Roberts: So insured sent in uh paperwork concerning the uh painting of their garage, and they wanted it to also be hand stained.
• 50:44
  Chantal Roberts: This is again an alg an algamation of a bunch of claims that I've seen.
• 50:51
  Chantal Roberts: And what the adjuster did was send out a very, very wordy change, you know, yeah, it it was just words, basically.
• 51:02
  Chantal Roberts: There were words in this email.
• 51:04
  Chantal Roberts: Lots of words, there were lots of words, and you had to read it three times to figure out that what the adjuster was saying is we will pay to paint your garage, but we will not pay to hand stain your garage.
• 51:20
  Chantal Roberts: Okay, so if you think about that, we will not pay to hand stain your garage, that's a denial, or maybe not a denial, but because there's no policy language, or there is, it says that we're gonna pay reasonable repairs.
• 51:36
  Chantal Roberts: And the adjuster felt that hand staining the garage was not reasonable.
• 51:44
  Chantal Roberts: However, how do I know that?
• 51:46
  Chantal Roberts: Because all of the notes say got insured, got email from insured repainting and hand staining, hand staining not warranted, sending email to insured about this.
• 52:00
  Chantal Roberts: That's it.
• 52:01
  Chantal Roberts: There's nothing in there that that says policy language states that we will pay reasonable repair cost.
• 52:08
  Chantal Roberts: And I don't, I believe that this can be repaired via painting, not hand staining.
• 52:17
  Chantal Roberts: Therefore, I'm going to send out a letter explaining this.
• 52:23
  Chantal Roberts: Maybe not a denial, maybe a reservation of rights letter.
• 52:26
  Chantal Roberts: I don't know.
• 52:27
  Chantal Roberts: You know, but you need to do something more than a rambling email that denies a claim, and you need to do more than uh this is not warranted.
• 52:38
  Chantal Roberts: I'm gonna send out an email to that effect.
• 52:40
  Chantal Roberts: Why is it not warranted?
• 52:42
  Chantal Roberts: I don't know.
• 52:43
  William Auten: Right.
• 52:43
  Chantal Roberts: You need to tell me, and that's what the Oklahoma statute says.
• 52:47
  Chantal Roberts: Okay, so this leads to the next thing, which is that, of course, as we've talked about, every state has their own departments of insurance.
• 52:56
  Chantal Roberts: The departments of insurance, being a governmental entity, have their own codes of enforcement.
• 53:04
  Chantal Roberts: These are called administrative codes.
• 53:07
  Chantal Roberts: And uh, this is where you will see in those states like in Arkansas that have already gotten the model acts into their statutes, you also got to go to the Arkansas Department of Insurance and look up their administrative codes for claims handling.
• 53:29
  Chantal Roberts: Because that's where they're going to say, put in what you're thinking right now.
• 53:38
  Chantal Roberts: And and so that's where you can get tripped up as well.
• 53:45
  Chantal Roberts: So brand new set of rules.
• 53:48
  Chantal Roberts: Who knew?
• 53:49
  Chantal Roberts: Oh my gosh, yay.
• 53:53
  William Auten: Well, uh So you're saying that you have to not it's not enough just to put the documentation in the file.
• 54:01
  William Auten: It's uh you also have to demonstrate that you understand um the documentation, and then you've got to be able to also communicate the decisions that you're making on the file, not only in the file, but to the policy holder in a way that everybody can understand.
• 54:14
  Chantal Roberts: Yes.
• 54:15
  Chantal Roberts: Okay.
• 54:16
  Chantal Roberts: That's what I'm saying.
• 54:17
  Chantal Roberts: Yes, yes.
• 54:19
  Chantal Roberts: Thank you for summarizing that because it's a lot, and it is, I don't know, um.
• 54:28
  William Auten: And this is the uh this is governed by statute.
• 54:30
  William Auten: You're not just making this up.
• 54:32
  Chantal Roberts: This and this isn't just um or it's administrative code where the DOI can go, yeah, I'm gonna take away your license.
• 54:40
  William Auten: Right.
• 54:40
  William Auten: So we have Regulation 64 here in New York, we've got um insurance law, you know, the 3400s, you know, the that all dictate, you know, the timeliness things and uh unfair claim practices and and all that stuff.
• 54:56
  William Auten: Um so yeah, and you've got to be familiar with them.
• 55:01
  William Auten: And if you're a manager uh or if you're running a claims department, you have to make sure your people know this stuff.
• 55:08
  William Auten: Um and it needs, you know, have seminars, you know, have your weekly meetings or monthly meetings where you just carve out 10 minutes to talk about something from those regulations so that everybody and then document that you did it so that you have a history because you don't want the only history that you you don't want to be in a situation where the only history that you have in your claim files is a consistent lack of attention to detail.
• 55:37
  William Auten: Yeah, notes missing, delays.
• 55:40
  William Auten: If if if all the documentation you have supports that and you don't have any documentation showing that you are consistently trying to teach your people how to conduct yourselves within the laws of your state, it's gonna be a problem and you don't want to have a problem.
• 55:54
  Chantal Roberts: It is, and then I hate to say it because I don't want to uh you know throw anyone over or anything, but if you're having these regular training events and you've got that one adjuster who just is not doing it, then you you've got a rogue adjuster.
• 56:11
  Chantal Roberts: And that that adjuster needs to go because that adjuster is going to get or be retrained, or you know, or or or be recalibrated.
• 56:18
  Chantal Roberts: Well, I mean, sometimes you just can't retrain them and you just need to let them go.
• 56:22
  Chantal Roberts: Um, but here's after I say all of all of this, I do want to give a a closing kind of thought.
• 56:28
  Chantal Roberts: Uh, because I think that that I try to do the whole gloom and scary and and all of this kind of stuff.
• 56:35
  Chantal Roberts: But remember when we started off, you as an adjuster and even as an agent have the right to be wrong.
• 56:42
  Chantal Roberts: As long as, and you had said it, Bill, as long as you're not acting with dishonesty and being willful and being malicious and being just hateful.
• 56:53
  Chantal Roberts: Uh, just like you were talking about with all of the industries, not just ours.
• 56:57
  Chantal Roberts: Uh, that's when we started to get that history.
• 57:00
  Chantal Roberts: You said it really, really well.
• 57:02
  Chantal Roberts: So you've got the right to be wrong.
• 57:04
  Chantal Roberts: You you as an adjuster can make the wrong decision.
• 57:08
  Chantal Roberts: And they can sue you for bad faith, which is when I get involved.
• 57:12
  Chantal Roberts: And I'm like, yeah, no, they're they're okay, or oh yeah, they totally messed this thing up.
• 57:18
  William Auten: They did the best with the best with the information they had at the time.
• 57:21
  William Auten: That's what you want to strive for.
• 57:23
  Chantal Roberts: Exactly.
• 57:23
  William Auten: Is that somebody's gonna say, you know what?
• 57:26
  William Auten: Bill Bill made a bad call call here and uh something went south on it, but he didn't know all of the stuff we know now when he made that decision.
• 57:37
  Chantal Roberts: And that's why I'm saying, too, if you just have an uh a claim note that says hand staining not warranted, well, why?
• 57:46
  Chantal Roberts: I don't know why.
• 57:48
  Chantal Roberts: So I think you can be being malicious or hateful or ugly or whatever.
• 57:54
  Chantal Roberts: But if you sit there and go, I think that actual painting will be fine because of the age of the wood, or yeah, I think mechanical sanding will uh whatever, whatever you think, put it in there.
• 58:10
  Chantal Roberts: You can be wrong, but it it it won't be as bad.
• 58:15
  Chantal Roberts: You can make a mistake.
• 58:17
  William Auten: And what I what I had just said about you know not having the information at hand, maybe you should have, you know, maybe maybe that's not an excuse.
• 58:25
  William Auten: Maybe the information that you didn't have you should have had because of training or because of, you know, were you just uh being ignorant and ignoring uh whatever um on your staining um staining example?
• 58:42
  William Auten: Um is this a person who has zero experience with wood and stain and doesn't really know that staining wood is a thing and never heard of it before because they lived under a rock?
• 58:53
  Chantal Roberts: Right.
• 58:53
  Chantal Roberts: Um they live it, they live in a brick house versus a wood house.
• 58:57
  William Auten: Right.
• 58:57
  Chantal Roberts: I mean, but but you're absolutely you know, and then they go, well, you know, and making that note, that claim note, detailed claim note.
• 59:07
  Chantal Roberts: I spoke with Bill, who is a claim, you know, who is the field adjuster, and he stated that blah blah blah blah blah.
• 59:14
  Chantal Roberts: So I'm gonna blame you.
• 59:15
  Chantal Roberts: And and but at least I'm making my decision based off of advice.
• 59:21
  Chantal Roberts: It's kind of like making a claim, uh coverage decision based off of advice of counsel.
• 59:26
  Chantal Roberts: It could be wrong, but uh that's what you did at the time.
• 59:31
  Chantal Roberts: Okay.
• 59:32
  William Auten: We we have a lot of high-stakes cases involving uh the need for uh various subject matter experts.
• 59:38
  William Auten: And the reason we need those experts is because um, like I said, the information that we need to make the decision, we can only guess at now.
• 59:48
  William Auten: Right.
• 59:49
  William Auten: We can Google it, we can watch YouTube videos, we can plug it into AI, and we can get all the answers that we think we need to make the right call.
• 59:59
  William Auten: Uh Um but without like an expert telling us really the facts as as that expert sees it, um, we're just guessing.
• 1:00:08
  William Auten: And and in those scenarios, it's it's beholden to the insurance company to uh to get the experts they need to make the right decisions.
• 1:00:19
  William Auten: Because I do see uh I do see a hesitancy to spend the money on experts or um you know getting them in too late.
• 1:00:30
  William Auten: Or just kind of just kind of um write it off as if it's not a big deal.
• 1:00:34
  William Auten: You know, everybody can see this is plainly the fact.
• 1:00:39
  William Auten: Uh okay, you know, are you an expert in that kind of injury?
• 1:00:42
  William Auten: Do you really know that they should have healed in four weeks instead of eight?
• 1:00:47
  William Auten: You know.
• 1:00:48
  Chantal Roberts: Um yeah, because what if you have an eggshell plaintiff?
• 1:00:52
  William Auten: Yeah.
• 1:00:52
  William Auten: So my my point in that is um you do have the right to be wrong, but you have to be really careful with that and make sure that um you're not in a situation where you're just kind of shrugging your shoulders and saying, Oh, well, I guess I was wrong.
• 1:01:07
  William Auten: I didn't know.
• 1:01:08
  Chantal Roberts: Um and again, I would I would point out again, this is where your claim notes say, because this is where your logic is.
• 1:01:17
  Chantal Roberts: It's it's not I'm gonna do this because I think because you know, Dr.
• 1:01:22
  Chantal Roberts: Google said blah, blah, blah.
• 1:01:24
  Chantal Roberts: It's I'm going to do this because counsel said to, or I'm gonna do this because the field adjuster who talked with the roofer told me XYZ.
• 1:01:39
  Chantal Roberts: You know, you're you are explaining your logic.
• 1:01:42
  Chantal Roberts: And then if that logic is incorrect because you've relied on wrong information, that's it.
• 1:01:49
  Chantal Roberts: And and if you need, or I'm gonna do X because I hired an engineer, and the engineer said XYZ.
• 1:01:58
  Chantal Roberts: That's what you do.
• 1:02:01
  Chantal Roberts: I mean, that's when you rely on that aspect.
• 1:02:05
  Chantal Roberts: Yeah.
• 1:02:06
  Chantal Roberts: So claim notes, also bad thing.
• 1:02:11
  Chantal Roberts: All about communication and documentation and decision making and all of that.
• 1:02:15
  Chantal Roberts: It'll be in the show notes.
• 1:02:16
  Chantal Roberts: Anyway, like, comment, share, subscribe.
• 1:02:19
  Chantal Roberts: Tell us about your worst claim thing.
• 1:02:21
  Chantal Roberts: Tell us about your bad faith claims, tell us about an idiot claims adjuster.
• 1:02:25
  Chantal Roberts: I don't know, whatever.
• 1:02:26
  Chantal Roberts: Tell us something.
• 1:02:27
  Chantal Roberts: I just like it.
• 1:02:28
  William Auten: Tell us stories.
• 1:02:29
  Chantal Roberts: Tell us stories, tell us if you like these darn adverts that I make.
• 1:02:33
  Chantal Roberts: I don't yes.
• 1:02:36
  William Auten: I'm trying.
• 1:02:36
  William Auten: So the when we do these episodes, uh, the the the most feedback that we seem to get is on LinkedIn.
• 1:02:43
  Chantal Roberts: Yes.
• 1:02:43
  William Auten: Uh, which I encourage.
• 1:02:44
  William Auten: I think that's a great platform.
• 1:02:46
  William Auten: Uh you and I are there all the time.
• 1:02:48
  William Auten: All the time.
• 1:02:49
  William Auten: Um, commenting and and uh having fun and promoting what we do here.
• 1:02:55
  William Auten: So uh if you are on LinkedIn, please follow both of us.
• 1:02:59
  William Auten: Um reach out and say some kind words or ask a question if you've got a question about anything we say here.
• 1:03:06
  Chantal Roberts: And and be sure to like like the adverts that we're doing because oh yeah, LinkedIn algorithm doesn't like us self-promoting, so FYI.
• 1:03:18
  Chantal Roberts: But if you like and subscribe and comment on Spotify and YouTube, that does push the algorithm does push up on things.
• 1:03:27
  Chantal Roberts: Okay, so our next episode, by the way, is January 15th.
• 1:03:31
  Chantal Roberts: It's the anatomy of a slip and fall claim, which is super exciting.
• 1:03:35
  Chantal Roberts: Uh, I can't wait to hear.
• 1:03:36
  Chantal Roberts: No, I'm serious.
• 1:03:37
  Chantal Roberts: I can't wait to hear some of your thoughts because Oh, we have so many fun things to talk about.
• 1:03:42
  Chantal Roberts: We do, we have so many fun things to talk about.
• 1:03:45
  William Auten: We have uh I don't think you can can you see this paper on the door over here?
• 1:03:49
  Chantal Roberts: Uh-huh.
• 1:03:50
  William Auten: That is that is our espinol uh cheat sheet.
• 1:03:54
  William Auten: Espinol is a case here in New York that uh uh relates to snow removal contractors and uh their liability.
• 1:04:00
  William Auten: So uh yeah, lots I could we could do three or four episodes on slip and fall cases, especially after last year.
• 1:04:09
  Chantal Roberts: Oh yeah.
• 1:04:09
  Chantal Roberts: All right.
• 1:04:10
  Chantal Roberts: Well, think about your new year's resolutions, make them to be big claim notes and everything, and management supervision, and I don't know what else.
• 1:04:23
  William Auten: Go out and enjoy the day.
• 1:04:25
  William Auten: Uh the day off today, January 1st, right?
• 1:04:28
  William Auten: And absolutely uh kick off the new year.
• 1:04:31
  Chantal Roberts: Yeah, we'll see you on the 15th.
• 1:04:33
  William Auten: All right, take care.
• 1:04:34
  William Auten: Bye.
• 1:04:35
  William Auten: Thanks for joining us on the Art of Adjusting Podcast, where we talk about life as an insurance adjuster.
• 1:04:40
  William Auten: Hit that subscribe button real quick and tell all of your adjuster friends to check this out as well.
• 1:04:45
  William Auten: For independent adjusting services, go to www.autin.claims.
• 1:04:50
  William Auten: And for anyone interested in working as an independent liability adjuster, go to the contact us tab to join our roster.
• 1:04:58
  Chantal Roberts: So this wraps up another Art of Adjusting podcast.
• 1:05:02
  Chantal Roberts: If you enjoyed this podcast or this episode, please give us five stars and a review.
• 1:05:07
  Chantal Roberts: It does help the algorithm pick us up.
• 1:05:10
  Chantal Roberts: In the meantime, you can contact me at theartofadjusting.com for consulting and training purposes.