It is our opinion that sometimes denying claims is bad business. Is your claims adjuster trying to find coverage for your loss? Or, are they trying to find exclusions of coverage.

This subject is at the center of every relationship between an Insurance Carrier and their Insured. What duties does the insurance company truly owe their insured when reviewing or analyzing coverage? Is their purpose denying claims or finding coverage?

Analysis

One of my favorite texts that describes the relationship between an insured and their claims representatives is The Claims Environment. This book was written in 1993 by James Markham as a textbook for claims adjuster training. The AIC 33 course text states on page 13 paragraph 3:

“The primary duty of the claim representative is to deliver the promise to pay. Therefore, the claim representative’s chief task is to seek and find coverage, not to seek and find coverage controversies or to deny or dispute claims. Because of the personal relationship formed in an insurance transaction, the insurance company should not place its interests above the insured’s. The claims professional handling claims should honor the company’s obligations under the implied covenant of good faith and fair dealings.”

Conclusion

We believe this is one of the most powerful descriptions of the relationship between an insured and their Insurance carrier. As an insurance consumer, you are at a disadvantage when negotiating an insurance claim. This is because, you, policyholder has no say in what is written in the policy and most-often do not understand much of the policy. More importantly, you are relying on the insurance company to stand by their promise of coverage in the event of a loss. There are several reasons why there is an implied covenant of good faith, but that is a topic for another post.

With the goal of good faith claims handling in mind, searching through the policy to find coverage should be the number one goal of a claims adjuster. Unfortunately, over the past several years, our experience has been the opposite. Lately, the claims adjusters we have encountered are moving farther away from looking for coverage. Instead have found new ways to deny coverage. Good Luck on your claims.

If you have a claims question, feel free to contact [email protected] or call us at 877.992.7577.