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Monday, January 07, 2008

Auto Insurance

This is the 2nd installment on my Auto Insurance and Repair series.

I worked in auto insurance so, while I also handled a few other things on occasion, I am not an "expert" in those matters so I am limiting this discussion to auto insurance only.

AGENTS AND BROKERS

A lot of people are just endeared to and in love with their agents, because they think their agents are in charge of everything, right down to getting paid for the claim. They think this often because the agent gives them that impression. It's called "salesmanship", which isn't always entirely honest. But it sure did work to sell you the policy and make you think he or she is god, did it?

So, first myth debunked - The job of your agent is to sell you your policy, explain general terms of the policy to help you understand that you have a deductible, etc. This is a VERY IMPORTANT service, because I've had customers whose agent either did not clearly explain things, or at the very least, make sure the customer understood.

Agents can indeed step in to help resolve matters or clarify issues between an adjuster and the customer, however, they have absolutely NO AUTHORITY over the adjuster. The adjuster does not work out of the agent's office. The adjuster has a totally different supervisor in a totally different department and geographical location. There MAY be some exceptions to this, but offhand, I can't think of any in all of my dealings with companies all over the country, large and small.

I will discuss agents and claims in more detail at a later point.

Keep in mind that SOME agents are licensed to sell only ONE companie's insurance, and so that agent may become pretty well versed in the policy terms. However, there are many agents out there who are licensed to sell insurance for several companies, in which case they actually DON'T know the differences and similarities in a policy.

I was actually surprised when I learned this. There was a dispute with a customer who had misunderstood his policy...but that's because he hadn't read it. The agent hadn't read it either, and confessed that he DID NOT HAVE A COPY of our policy! I asked how that could be? And he explained the above...they sell the policies, but they don't know the changes or differences, it's impossible to read and know all the policies they sell, etc etc. Now, I can tell you that my company had the policy online in a database accessable to agents and adjusters alike, but it's possible not all companies function in that manner.

So...that knowledge was very helpful to me as an adjuster when people said that their agent couldn't explain those details of the policy. Nor, really is it the job of the agent to do this.

Remember...when you purchase a policy and give your signature, you are signing a legal contract, that you understand the terms of the contract. And in a policy, there is a section of clearly laid out exclusions. Also, under "Collision" and "Comprehensive", etc., it also lays out what is covered. If something is not mentioned...it's not covered. Check for other coverages. For example, "Rental" is not necessarily included under Comprehensive. SOME companies include this; others do not. This is a VERY IMPORTANT difference which requires you to READ your policy. Reading up front could save you massive headaches and misundersandings later.

Know what it is that you are purchasing from your agent. If nothing happens to your car, then it may not matter. But don't rest on your laurels, ever...that's when the world turns upside-down.


One important detail about agents in relation to claims: If your claim is at-fault, the agent may be reluctant to take it down. Why? Because those losses are a detriment to the agent. They are self-employed, and there's all sorts of things that involve an agent's overhead. They don't even want to take your claim down if you are NOT at fault, because they don't want the company to pay you...they want the other company to pay you. So they'll tell you to wait, which is a HUGE disservice to you especially if the other guy doesn't have insurance, if there is a problem with his insurance, if something on his claim needs to be investigated, etc. So don't EVER let an agent tell you not to report a claim.

I will have to discuss fault and liablity in another post.



CLAIMS ADJUSTERS


Claims adjusters work en-mass out of a Dilbert-like environment involving cubicles that look a lot like ice trays from afar. There are different titles and types of adjusters, so here are a few:

Generalists handle anything and everything (within auto) which may be defined, expanded, or limited in scope by the company. When I started as a generalist, it meant that I was the sole contact on the claim. I spoke with all parties, I inspected the cars and wrote estimates, I negotiated with the shops, and I settled Bodily Injury claims (minor ones). There are also Generalists in the Injury unit (will define this further later), and they specialize in handling the medical portions of auto claims. While I worked for the company, the generalist positions changed a bit, although I can't speak to the medical side very much as I was not involved in that unit. However, on the property damage side of the coin, several reps were forced, in addition to their property damage and liability investigation workload, to take on certain injury claims as well, meaning that that portion of the claim would remain with them, not be referred to a med rep specialists.

You may hear the terms "Inside Rep" and "Outside Rep", or terms similar to that. Some companies hire adjusters who work only in the office, making calls, taking statements, determining liability. The outside reps are those who drive around all day writing estimates and negotiating with shops. Of course they work closely with the inside reps.

Some companies do not assign a claim to an individual, but rather, have a team approach. A batch of claims is sent to a particular team, perhaps consistent with a particular specialty. Anyone on that team is responsible for the resolution of the claim.

Claims Investigators, which is what I was for the last four years, deals with specialized types of claims. This title and position would vary from company to company, so be aware of this. Sometimes generalists handle the high-fraud claims, but in my company, those were passed to a group of investigators. My job in that unit was the same as before, however, it was far more complex. Each claim required further investigation to rule out fraud (which is what usually happened). In that case, the claim was handled like any other, although with a few extra steps on our end, which were explained to the customer. Most customers understood this especially when it was explained up front, some chose to argue, anyway. On occasion red flags were all over the place which caused us to launch a full investigation, involving forensic experts, criminal record searches, requesting financial documents, etc. Whatever was proper. Not all of the same things were requested on all files; our scope was limited to the concerns we had. If in the process of a full investigation fraud was ruled out, we ended the investigation and resolved the claim. If it was not resolved, we continued until the questions were answered. I am not going to go into great detail on these investigations because I'd rather not teach someone how to committ fraud.

To anyone who has a claim that does go into a fuller investigation - don't worry. Cooperate, provide what you are asked to provide, realize this is happening for a reason, and the investigator will HAVE to, at the proper time, address particular questions to you regarding the concerns. However, no, you don't have a right to the documentation being obtained in the process of the investigation. There are some things you can obtain at a later date, but in the course of the investigation, nothing is released.

Also...in Minnesota, there is a law that allows insurance companies to obtain information from other companies. It's an immunity law that protects adjusters from being accused of "bad faith" if they are requesting info otherwise deemed as "private", but for the use of ruling out fraud.

Every claim you have goes on record at the National Insurance Crime Bureau. And investigators have access to this information. And the NICB can also request copies of the investigative files of the insurance company in question if an issue falls under their umbrella. This is a fairly rare occurrance and doesn't happen to people who are on the up-and-up.

Special Investigators are yet another category. They are not adjusters, but pure investigation. They canvass neighborhoods, they go to court houses and look up records, they view videos of crime scenes with the police, they are in charge of obtaining statements in person, or in some cases, of conducting depositions. (My company used attorneys to conduct depositions). I worked with someone who had formerly been in a specialized unit of US Customs, Secret Service, another was ex-Chicago Homicide. That's where retired Feds go---to work for the insurance companies in investigating fraud. And they could do amazing things both because of their professional contacts and professional experience. I'll tell you right now I'd never want to sit across the table and be grilled by one of these people!

I worked very closely with them, though, and in the beginning, that was my career goal. But I got worn out and saw the punishment they took in form of workload and realized that I wanted nothing to do with it. Also, I realized I hated cars with a passion and didn't want to spend my career dealing with fraud and cars. The very thought made me tired. You would NOT believe the amount of travel these people would have to do and the hours they had to put into their jobs. No, thank you.

And to be fair, I also came into contact with a few SIU reps who were not up to par, and they literally WRECKED investigations with their incompetence.

No field is complete without the Incompetent.

OK, this post is really long, and there's more to say, so let's just end here at definitions. If something comes up that I didn't define, I'll edit to include it.

SOME GENERAL INFORMATION:

if you do have specific questions and you have a claim, the BEST person to ask is your adjuster because they're the only ones who know what is going on with your claim. Your Agent does not have access to the claim itself. They might have access to some limited information, but don't call your agent to find out what the adjuster is doing. They can't answer that. Don't call your agent to find out how long it's going to take to fix your car. The agent doesn't know.

Depending on the system the company is using, the Adjuster or maybe a contact at the Repair Facility will answer your questions specifically. However, in the context of a CLAIM specifically, your adjuster is the person to tell you who to contact for what, IF said adjuster isn't the person for all of it.

One of my biggest frustrations was that people would not call me if they had questions, or if they did call, they didn't leave a message. I was ALWAYS on the phone when I was in the office, and the rest of the time, I was out of the office. So I couldn't always be there to answer the phone. But I checked messages from the field when I had a moment, and I returned calls as soon as I was able. But some people wouldn't reach me and just assumed I wasn't "doing anything." And they'd call their agent, who WOULD actually leave a message. Often with attitude.

I ignored agents with attitude. Sometimes I'd call them back in a timely manner, but the agent isn't my customer. If I knew who the agent was calling about (ie if they told me the name of the customer), usually it was a customer I'd been trying to reach so just tried to reach them again. The agent RARELY did anything to assist on a claim. Instead, they were usually just responding to a customer complaint, which usually had something to do with the policy, not the service. And so I'd explain to the agent EXACTLY what I'd told the customer. And then maybe the agent would explain it again to the customer. Or just say "Oh" and drop the attitude.

And then there were times when the customer would throw the agent under the bus for something. Or the agent would throw the customer under the us. Or the adjuster. Those times were always great fun for all.

My favorite was the agents who tried to tell me how to do my job. And I would explain my job to them, and define theirs to them (ie...I'll do my job and you do yours), and then I'd end up faxing a particular portion of the policy to the agent.

Some agents were awesome, and were indispensible in resolving customer disputes. Those agents admitted if they didn't know the policy in question, took time to learn the process and understand both what we were doing and what the customer was doing, and even helped to resolve total losses. I LOVED those agents, can still name some of them, and really wish ALL agents were like them. Working WITH the agents was just awesome especially when a customer was confused, or just a difficult person.

So this post should be taken as a Pro-Good-Agent post. I LOVE good agents!




Next up: "No Fault" and Liability - What some people THINK it means versus what it REALLY means. It isn't even in the same ballpark with the mythology about it.


I would like to make one request - If you comment, pleas refrain from naming any insurance companies, whether your comment is positive or negative toward them. Secondly, please don't give a laundry list of insurance complaints. No one here is your broker, your adjuster, your agent, or anyone who can help you. There is more than one side to every story.

If you have questions with limited scope that can be answered, I'm happy to try to answer. I cannot address things that are specific to your claim or policy. I couldn't even do that when I was working in insurance because I'd have to look up each individual circumstance in light of the policy. And it's not always easy as you might think.