Episode #96: The Bad Faith Warning Signs

Bad faith doesn’t usually arrive as one dramatic blow-up. It shows up as a slow drip of little things: the voicemail that never gets returned, the approval that sits in someone’s queue, the vague diary note that makes sense only to the person who wrote it, and the template letter that accidentally says more than it should.

We talk through the practical warning signs we see when a claim is headed toward escalation, complaint, or litigation. We dig into how understaffed claims departments force adjusters into triage, why vacation schedules and internal handoffs create gaps, and how stacked authority levels can turn a reasonable settlement into a trust-breaking delay. We also share communication habits that de-escalate fast: acknowledging frustration, picking up the phone, setting a realistic follow-up date, and explaining the “why” behind the timeline without overpromising.

Then we get tactical about defendable claim handling. We explain what strong claim notes look like (so another adjuster could take over tomorrow), why “sent letter and cut check” is a dangerous level of detail, and how automation and AI can help with organizing but cannot replace human judgment or protect you from privacy risks. We close with a common landmine: form letters and 30-day status templates that include inapplicable language, creating ammunition for a bad faith narrative.

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For more insights, you might consider a career in liability adjusting or if you're searching for reliable adjusting services, visit Auten Claims Management.

To explore more about Chantal Roberts and her contributions to the industry, visit CMR Consulting.

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Transcript

Welcome And Why Bad Faith Starts

William Auten 0:06

Hello, I'm Bill Aughton of Autin Claims Management.

Chantal Roberts 0:09

I'm Chantel Roberts of CMR Consulting, and welcome to the Art of Adjusting Podcast.

William Auten 0:14

Today we're going to talk about life as an insurance adjuster from the perspective of property, auto, liability, or workers' compensation adjusters. 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. Good morning. Hey Chantel, how are you?

Chantal Roberts 0:35

Oh, I'm doing well. Thank you. How are you?

William Auten 0:37

I'm good. I'm good. Doing well. We're keeping busy and the weather's finally tuned up. We've got some 75 degree days and some 80 degree days, so it's been nice.

Chantal Roberts 0:47

Very good. Very good. Yeah, we are having a storm here today, so you may hear some thunder in the background or something to that effect.

William Auten 0:56

Usually those fronts that hit you eventually make their way east, and uh we'll see some rain in about a week or so.

Chantal Roberts 1:02

Yeah, absolutely. Absolutely.

The ROI Of Claims Staffing

Chantal Roberts 1:05

So today we are going to be talking about, you know, the the ways a file can go sideways and and um how bad faith doesn't really it do it it doesn't always start with the file, but it can. And uh I uh when we were talking originally, you and I uh I said, hey, you know, I'd like to talk about bad faith from kind of an expert witness point of view, because I know that we always do at the beginning of the year, we always talk about the Unfair Trade Practices Act, the Unfair Claim Settlement Act, so that it puts me out of business, essentially. And and so I thought I would specifically point out some of the things that I've been seeing that adjusters are doing. And uh I had mentioned to you how I had published a white paper. Yeah. And you said, let's talk about that too. And I'm like, it actually would do really well because the white paper kind of combines what I've been talking about. The white paper is called the ROI of claims staffing and education. And what it talks about, it's specifically for the C-suites of insurance companies, and it talks about how the boards, the governing boards, don't know what the product is that they're selling. And the product that they are selling is that a covered claim will be paid. And the only people who can determine that is the claims adjusters in the claims department. It's not this piece of paper. So by deliberately shortchanging the claims department by understaffing it or not educating it, because so many, so many insurers don't send people out to CE anymore, don't send people out to seminars or webinars or anything like that anymore. And the adjuster is meant to educate themselves, which hopefully this podcast does.

William Auten 3:14

So hopefully it does. It does for me and you, I think.

Chantal Roberts 3:18

So I think so. Yeah, and be sure to share with your friends so more people will know, you know, click like, subscribe, blah, blah, blah. But that's what the white paper is for. And it's so it this conversation would not be about how adjusters are evil, I because I don't really think that at all. But it's more about recognizing some of these warning signs before a claim escalates into a bad faith situation or lawsuit, and we get that really big verdict that nobody wants to talk about. Or we have a lot of hostility and all that.

William Auten 3:56

When it comes to adjusters being evil, okay, there's always going to be bad apples. Let's put that disclaimer out there that that uh you'll have some some jerks in this line of work. Um but what you have to understand about insurance companies too, they're not evil either. Um they might uh be per portrayed that way, but mostly that is due to their um operation in being selective about how they choose risks and how they pay claims. And it's all against a set of rules uh that are usually outlined in a policy. And you know, how many times a day does an adjuster give bad news to somebody that that the rules say that this isn't covered? And I know I would love to help this situation, but I can't because this is a contract and there's an agreement, there's rules and structure. And this is not just um, you know, we're not just writing checks to make people happy necessarily. We're trying to function within a business model. Right. And there are some people that will argue that that a business model like that is evil. I heard one guy ranting the other day that insurance companies are um what did he say? Um he said they're evil basically. And um I I don't I don't agree with that. First of all, they're they're not good or evil, they're just a giant machine. And uh when you recognize that it is kind of a system and there's disconnects within that system that sometimes lead to bad outcomes. You know, the the bean counters are looking at a certain thing or a certain policy uh form and not understanding the nuance of the language or not understanding that that form functions with some other in some other context, and they don't understand why they're paying a certain type of claim. Um and the claims department folks have a different interpretation. Um when you have that dynamic to the outside looking in, it looks like there's there's some sort of bad faith thing going on when really it's a systematic maybe flaw, perhaps, right, and should be corrected, and that's fine, but it doesn't mean they're evil.

Chantal Roberts 6:25

No, and and I think too, and it goes back, and this is not what the topic of the conversation is today, although it would be a great topic, is it goes back to our education as an industry to our consumer who are the policyholders. Uh, you know, because we're busy saying, you know, save 15% or more by just signing up online, or we've seen a thing or two, and we can go with the flow and we're in good hands because we're good neighbors or whatever. And that doesn't tell you anything about the policy that you are buying as a as a consumer. So that's a like I said, whole different podcast, but you're absolutely right. Whereas the accountants and the underwriters and the marketing people may go, yeah, that's totally covered. The claims people will say, Is it though? And which is one of the reasons why I tell my students, I think that we're teaching insurance backwards. We need to start with claims and go, what do you want covered? You want that covered? Okay, we need to back it up and go boom, boom, boom, you know, and and and then work back towards selling it and then underwriting it, and then how much is it going to cost? But that's that, like I said, whole nother thing. But part of this, again, the thing that you're talking about, people seeing insurance companies as evil or adjusters as as quote unquote evil, is when adjusters are overworked and excuse me, they're just doing triage claims handling, uh, and they're putting out fires left and right. And so they have inadequate supervision, they have communications that are compressed, and there's lack of time for some kind of thoughtful investigation. And that is how we we kind of get to this point of there may be bad faith. And so I wanted to alert the adjusters of hey, if you start seeing some of these warning signs that I see, take a minute and pause and do some investigation, either on yourself, on the file, or whatever, so that we can avoid this escalation of the file to litigation, because it just costs everybody a little bit more. And if we owe the claim, we pay the claim. If we don't owe the claim, then we need to explain it a little bit better. So that is what we will be talking about today and why, as the white paper is being tied in, the claims department is not considered to be an expense center, even though it's on the expense part of the ledger for insurance companies. Uh, it is really an operational risk control system because everything that the adjuster touches impacts the entire organization. You know, our loss adjustment expenses, and if you get a lawsuit, uh if you're investigating things three or four times, you know, sending out appraisers or field injusters, estimators. So anyway, that's that's kind of what I was thinking. That's a long introduction.

Vacation Gaps And Rising Anger

William Auten 9:52

Yeah. So um so the um the root cause of bad faith, um, a lot of people will probably think on its face that it's the behavior of a of an adjuster when in the process of handling a claim. Um, but really there could be some underlying structural things that lead to it. Take vacation schedules, for example.

Chantal Roberts 10:17

I've seen that.

William Auten 10:18

If you're not managing your vacation schedules properly in your claims department, you're gonna wind up short-handed. And if you if you allow, you know, a lot of people to take time off in a season where you know it gets busy and you you drop the ball on a bunch of claims because you're understaffed, um that's kind of a potential bad faith situation because you've not, you know, as the manager of that department or that company, you are are not um you know, stewarding it properly.

Chantal Roberts 10:52

Um absolutely. Yeah. And and I see it when you don't have enough, and again, this is this is globally, this is not anything that an adjuster themselves can do, but more as a C-suite thing. And this is something that we kind of talked about in the white paper, is if if you have so few adjusters that they can't that they're already operating at one and a half desk, two desk, like they're they're handling the file load for two adjusters instead of just their stuff because you don't want to hire them because it's an expense or whatever, that does um aggravate the system. And it it causes these emotions to boil over, that leads to bad faith lawsuits. Okay. So if we don't have enough people to even answer the phone or answer questions or handle a claim when an adjuster is on vacation, then yeah, that this is when again we we antagonize our client who is the policy holder, and we start seeing like shifts in tone in their communications and everything, because the the insured, and I'm just gonna say insured, but it it could be the first party claimant or a third-party claimant, regardless, even though there's not really bad faith, quote unquote, for uh um a third party, although there are the states like I think California is one, Louisiana is one where you can do the long arm statute, not gonna talk about that. But anyway, just know that that's what I'm talking about. Um, because you can see the the switch in tone and communication with a third-party claimant as well. So when you see this, when it goes, nobody answers my phone. You know, nobody answers the phone. I can't get an answer out of anybody. So-and-so said this, but so-and-so is saying this, and now so-and-so is on vacation. Um, you know, that switch from here are the facts to either anger or fear, which anger is very close to fear, uh is is one of those warning signs. And one of the ones that I saw in a in a case was the fact that the adjuster's father had died. And the the insured blesser was so frustrated by this point. The insured was wrote, I don't care. I they wrote it in an email. I don't care that your dad died. I'm like, wow. Whoa. I mean, let's pay attention, insurance company. And and that's not the adjuster's fault. That is the governing board's fault. And so that's how the white paper ties into this. But but what the actionable item that our adjusters can do, and that's what I want to talk to everybody about, is you need to acknowledge that communication. Hopefully, the person who is filling in for the adjusters whose parent has died. Um, say, hey, I I recognize I got your email. I understand you're that you're frustrated. I recognize this, and I want to acknowledge it. And let me see what I can research into this, and I will get back with you by the end of X date, and then put it on your calendar and do it so that you don't become another liar that this person has been dealing with, right? I would also pick up the phone and use my voice when you're before you send that email. Um, you know, and uh then you can confirm that in an email. And so that is the difference between kind of like working a file rather than just like kicking the can down the street, uh, such as, well, your adjuster is off for three days, they'll be back on Monday. Call back then. That's gonna make the injury, and then it's that's like a little paper cut. Yeah. And those things are annoying, you know. It's like a salt in a wound, and and now the insured or the claimant is just gonna keep thinking about the these little bitty things, these little niggly things that are making them mat.

William Auten 15:37

They're gonna make a list in their head, yeah, and they're gonna recite it to everybody that asks them how the claim is going, and uh it's not gonna be good.

Authority Bottlenecks And Delay Math

William Auten 15:46

Um, another, you know, we talked about vacation schedules. Uh, what about authority levels? Because, you know, I've seen a lot of places where there are um it has to go to one person for authority, and then if it's over a certain dollar amount, it's got to go to the next desk, and then if it's over that amount, it's got to go to the large lost person. And it's just this unending chain of and the people that are setting that system up are probably not thinking, well, this is gonna slow things down, and it could it could mean that someone's gonna get mad or they may not care. Um, but what but what they're really trying to do, I get what they're trying to do. They're trying to make sure that that that something doesn't get paid that shouldn't by accident. Right. Um and you know, I don't know if having 15 people look at the file is necessarily the answer for that. Maybe just educate the people and give them some autonomy and and authority to do things uh might be a better way to go.

Chantal Roberts 16:49

Yes.

William Auten 16:50

But um but it it's also tough. The job market, you know, you don't have a lot of people flooding into these jobs.

Chantal Roberts 16:58

Um that's another thing that the white paper talks about. Uh but you're absolutely right. Let's talk about the the authority level because I have seen it where the insured and maybe even their attorney, maybe they're already represented by an attorney, they just want to get paid because it's already been two years since they've gotten the last check. And now they've got a, I don't know, $98,000 check. And the adjuster's authority is $25,000, but the manager's is $50,000. And then that manager, like the grand manager, is 75. And then you got to go up to the scene senior or the junior VP of claims to get up to $100,000 or whatever. You know, that makes people mad. Absolutely makes people mad. And I do get it, you're absolutely right. The reason why we have these levels is so that we as an insurance company can get eyeballs on this claim and have some kind of review on it, which is great because that's what we're supposed to be doing anyway. However, and I'm not saying increase everybody's authority. However, what we may want to do is shoot it directly to the senior VP instead of it going or maybe give it to our manager who shoots it up and then CC everybody on it, but it it moves it a little quicker. And then on this again, what we have to do is call our claimant, which would, in this case, have been the attorney because they were represented, and say, hey, listen, I've got to go through three people to get authority. And they they also have things to do. I have outlined why this is urgent, but I don't control their schedule. So I just want to let you know I've I've already sent it to them, and you know, boom, but I can't control how fast it's gonna go. I would guess based on the past, it's gonna take me five days to get authority. And I I know that's not what you want to hear, doesn't make you happy. I I have told them it's an emergency.

William Auten 19:16

So what what that person hears is you have to wait. What they don't hear is there are 500 documents in your file, and 15 of them uh uh are scanned and faxed and blurry, and somebody's physically got to read them, and um uh another uh set of them are not labeled properly, so we have to, you know, and that has to go through all these people. As organ we have it as organized as we can get it, but it's not like reading a newspaper, it's like reading a novel written by a four-year-old, and it's uh uh you know, things are out of order and things are messy, and and um uh on top of that, there may be coverage issues. It may be what happened to you uh or your house or whatever, uh, may have been really weird and doesn't fit into the category of an accidental fire or a hail storm or something that's clearly obviously covered. Right. So there's things that have to be reviewed in order to determine whether or not anything gets paid at all. And that's a complex process. Exactly. All that stuff and more needs to be explained to that person to explain that five-day delay, right? But and if you don't, all they hear is I have to wait.

Chantal Roberts 20:42

Right. And and you are absolutely right. And so when you don't even say you have to wait. You know, if you just say, I I put in the request, so I'll let you know when it happens, that you've you've met the bar. I mean, you've communicated that. Um, but again, we're talking about how we can avoid these kinds of escalations. And so then what you want to do is kind of go beyond what is absolutely positively necessary and go, look, there's you know, it's got to go up to my manager, their manager, and the the senior VP. And based on what comes back, usually it's five days. Now I've told them it was an emergency. Hopefully they'll get to it, but I I don't want to misrepresent here. Um, also, this is kind of a complex claim. And if you just stop at five days, but I've done this, this is a little bit more information, and they're not going to be happy, but at least they understand. If you go even further than that and say, this is why it's gonna take like five days, because they're reviewing everything behind me, making sure I'm doing my job correctly. They then understand you've been transparent with them, adjusters. So once you've done that, there's they could still be mad, but there's really nothing they can do about it, right? And then you can, again, you confirm it in an email like, hey, uh told you I've sent it based on history. I'm gonna say five days. I don't know, I can't promise anything. Yada, yada, yada. Uh, and and again, you have been forthcoming. For the C-suite, how the white paper ties in is that adjusters nowadays don't have time to make these phone calls. We don't, because we're putting out fires, right? We we don't have this staff because no sooner do we like hang up the phone than the phone rings again. And and for us to get through all the KPI, the key performance indicators that we have to do, closing files, you know, closing 10 files a month or whatever they have us do, means that we have to take shortcuts. So, what we need are more adjusters, and that's how the white paper kind of ties into this this whole thing, is so that we can be better.

William Auten 23:17

Yeah.

Chantal Roberts 23:18

And and that means that we need more adjusters.

William Auten 23:21

And when you say we can be better, I think what you mean is the insurance industry as a whole, not Joe adjuster sitting in the desk. Although there's plenty of opportunities for Joe to to improve. And I made that up. If your name is Joe, I'm not picking up.

Chantal Roberts 23:36

Sorry, we don't mean, yeah. Wouldn't it be awkward if there was an honest person named Joe Adjuster? That would be awkward. That would be weird. So awkward.

Triage Handling And Reopened Claims

Chantal Roberts 23:46

Um yeah, so what we're talking about is is pretty much like the triage mode, which is what adjusters are doing. And another sign, another warning sign that a file is going to be blowing up is just because we're just focusing in on that one thing rather than actually working the file. You know, like I said, we're just kicking the can down the path a little bit. And you see this by having a lot of repeated start and stop movements in the file. So within, I don't know, three days, you'll have a whole bunch of work done on the file. And then it just goes silent for, I don't know, 28, 30 days or something until someone pops back up and says, what's going on? Where's my check? And then you have maybe, you know, one whole day of activity and where you reviewed the estimate and you sent out a check and it goes silent again for 15 weeks or days until the insurer goes, this isn't enough. And you know, boom. So what we're doing is we as adjusters, as file handlers for ourselves, need to know why the file stopped. You know, we need to stop at that point if if we just see this continuously, or if we're supervisors, we need to look and go, okay, think like a chest master. What's the next step? What are the next two steps? How can I get this file moving? Because really, the only happy file is a closed file. And I do want to say to the C-suite as well, just because we've paid, we've made initial payments, doesn't mean we get to close the file. Almost always there's going to be supplements.

William Auten 25:40

So like on property anyway.

Chantal Roberts 25:42

Yeah, yeah, on property anyway. On property anyway. Uh and and so I see these metrics where they're so proud of themselves because they they worked a cat file, they're they worked a cat event and they closed 90% of their claims within 30 days. And my question to them is, yeah, but how many did you reopen? I mean, how many did you reopen?

William Auten 26:06

That makes me think of two separate scenarios. Uh, one one scenario you have um you have a group of seasoned adjusters with authority of say $150,000 a piece. Um there's very few claims that come across their desk that they can't just wrap up. And they know what they're doing, so they're able to get those claims closed. Another company had that set up, but they they were worried that there was some leakage, meaning that there was claims being paid that shouldn't or they were being overpaid just because adjusters were being lazy or expedient or whatever. Right. So they put levels of author different levels of authority in um to make sure that those claims were being seen by more eyeballs. So when you compare the two, you might find that uh the second company pays less on claims than that first company. But the risk of um, well, like you said, the supplements are probably going to happen in that second scenario to balance things out. Um but what you risk by doing that also is a bad faith scenario because now you've got all these delays built in um unintentionally, but you've got these delays built in where other trip-ups can happen. And let's say you've got three levels of authority and that middle level went on vacation. What happens now? And no one knows what to do, and the claim sits for 30 days or 40, 50, whatever.

Chantal Roberts 27:45

Yeah.

William Auten 27:45

So in those two scenarios, I I feel like the first one is the cleaner way to do it. And if if it costs the company uh technically, you know, more in claim payments by 15% or 20%, um, does that mean that that you've actually overpaid by that much? Or are you hiding some monsters in the other system that are gonna blow the whole thing up at some point?

Chantal Roberts 28:15

And you've mentioned some great things that the white paper talks about, the ROI of claim staffing and education, which is okay, C-suites, you know, you've you've got a choice because the money's gonna come out one way or the other. Either we're slightly overpaying, which we hope we are not, we because we're only supposed to be paying what's owed, right? But we may be overpaying, but we got the file closed and it doesn't come back, or we stick to this really strict kind of no, we're gonna only look at this thing and then excuse me, we're gonna look at that thing, and then we're gonna look at this thing, and we then aggravate the insured so much that now it's in lawsuit. So instead of slightly overpaying, let's say by 15%, now we're going to be paying additional loss adjustment expenses because now we've got all of these other inspections that we've had to do, and maybe we had to pay someone to do that, and we have attorney fees. And we know that we're gonna have to tack on like another 20% to settle the claim or whatever. So which one do you want? It it it's you're always going to pay, but which way do you want to pay? And I would agree personally that the first method that you were talking about is the correct and the and the best, I guess I shouldn't say correct, but maybe the best method better, better than the second option. Yeah, because I have also seen as an expert, again, these are adjusters are in triage mode. That's why I say that the adjusters aren't evil, they're not bad or anything like that, but they're in triage mode. So the insured will go, Hey, uh, this isn't enough. I need you to send someone else out and write another estimate because my contractor says it's gonna be $15,000 and you've paid me $7,000 or whatever. And the adjuster makes the notes but never reopens the file. And so then a diary isn't set and it falls off that adjuster's radar until like two months later. Hey, when are you going to the insurance pops back up? When are you going to give me my uh it's like send someone out again? And again, that's what I'm talking about. This is this is a warning sign.

William Auten 30:48

So yeah.

Internal Rules That Create Risk

William Auten 30:51

Um, so I want to talk about the the attitude among um claims departments, um, managerial, I guess, more than anything, that um when they're faced with irate policyholders, because there's time delays built in for review, or there are internal uh procedures that um govern the way they pay certain claims, like um for a roof claim, if they you know have um an internal policy that says it's not in the insurance policy, but it's their policy that they only repair after so many hail hits or you know, they only replace after so many hail hits or whatever. You you know what I'm talking about. Yeah, yeah, yeah. I've seen those. Those arcane little you know, weird things about drip edge and the the silly arguments that some adjusters are are forced to to get into. Um and when when those are addressed with the smart people in charge, um and the reply is um you know, I don't care. This is the way we do things, uh that's problematic. And I've seen that kind of attitude in claims departments before during my career. Certainly none of the clients that I work for today uh do that. And I'm I I do mean that. Um we we work for uh kind of a strange subset of of the insurance industry, they're small regional carriers. Um but I I you know I I think that if that attitude prevails in your claims department, it only takes one person to to have that kind of attitude. And it and especially if that person is overseeing many young people, yeah, um, it sets the the wrong tone.

Chantal Roberts 32:52

It yeah. Yeah, I shouldn't care. Well, yeah, and but it's also it it is a systemic thing, and um it does come from the top down, I believe. And a lot of these, again, the C-suites, uh and that's what the the paper was about. It it's written to those MBAs who think that they can squeeze this penny, or I guess it's a nickel now, uh, and and get more profit out of the claims department. And again, the claims department is not a cost center. We've got to change that thinking. And and I have been asked though, before I respond back, is yeah, here's the deal. As an average adjuster, I totally agree that let's just use a roof, for example. Like uh a residential roof may need overhead and profit put on it, you know, on that. If that's the only thing that is done. But my company here has these guidelines that say absolutely no overhead and profit are on roofs at all, on residential roofs, period. And so I disagree with that. So what do I do, Chantel? And and what I would say to the adjuster is again, we need to write very clear notes, but we can't sell, we can't throw our boss and the company that we work for underneath the bus, so to speak. And so that's when you say, hey, according to the rules or this guidelines or whatever, I have not considered overhead and profit on the roof. And so boom, it's right there for the expert to know about when we're reviewing your file. Do you need to tell the insured about it? No, not really. You could tell them when when they're asked, when you're asked or whatever. But yeah, they're um make sure that you're kind of CYAing, I guess, is is is what I'm saying.

William Auten 35:16

That is an important aspect of it, is definitely you know, put in there that you are paying uh according to your company's policy regarding overhead and profit. A better approach is to understand why that policy is in place and be able to explain that to whoever you're talking to.

Chantal Roberts 35:34

Exactly.

William Auten 35:35

Because that means that you understand it, you've internalized it whether you agree with it or not is another issue. But um in most cases, those discussions about overhead and profit with a single contractor make sense in the realm of Exactimate or any of the other estimating systems because it's got those components built into labor rates and uh and material costs.

Chantal Roberts 36:02

So right. And to go if if I can interrupt, I'm sorry. To answer your other point about, you know, let's say that there's a supervisor who may be mistraining people or their his or her adjusters based off of his or her opinion. This is again why it's so important that adjusters get training and education. And I don't necessarily mean just the CE for your license every two years or whatever. It means going to seminars somewhere else and listening to other points of views, talking to other adjusters at your local claims association and that sort of thing to make sure that we are putting actually the customer first. Because again, the promise is that we are going to pay a covered claim. And that's what we've got to do.

Training Pipelines And Better Explanations

William Auten 37:03

And I I think 90% of uh bad faith issues can be um reduced or eliminated by educated adjusters who are able to um verbalize what is happening, where they're at in the file, uh what they've done in the file, what they need to do on the file, and how they came up with a number to settle the claim. Because if they can rationalize that and they can and they can state that, um it shows that you're making an effort to do the right thing. And when presented with an alternative opinion, um if that's communicated to you properly, you may internalize that and say, you know what, you're right. And we do owe for whatever. And uh, I'm gonna do a supplement uh to include that.

Chantal Roberts 37:57

Exactly. Absolutely. And and I think that is part of the key aspect is an educated adjuster is is better able to communicate. And and you and I talk about communication all the time. And I again, I know that adjusters are like, this is great, I would love to communicate more, but I'm really busy. And again, you don't have any control over your insurance company hiring more adjusters, except maybe uh anonymously slipping your boss the the white paper or something. It's a long read, it's 37 pages. But the the point is if we had more adjusters, you it would be better. And I mentioned pipeline because you you were talking, we were talking about vacation and and we don't have enough adjusters to to to cover that and everything. I mentioned this in in the white paper, and I said, listen, we gotta look, we as again again in the industry have to look at ourselves when we're only looking for college graduates who have experience for two years. What you nope for an entry job, you can't do that. Maybe, maybe what we want to do is hire someone right out of high school who's not ready to go to college, but wants to begin a great career.

William Auten 39:26

And have a have a have an internal education program that's a good idea. Absolutely. You know, like send them to education is is huge. Yes. Um there are other barriers. I mean, not everybody can articulate their thoughts very well.

Chantal Roberts 39:43

No.

William Auten 39:44

Um, and that's a really important skill to have in this job, is you've got to be able to talk about the things that you're doing, the things that you need, and the things that are going to happen in the process of the claim. And um, and you have to be comfortable today with technology. Yes. Now I've seen some adjusters who are great at articulating their thoughts. But when it comes to tech, what's you know, what's Word? I don't know what Word document is. A word is yeah. Um, so you know, there's a lot of different barriers, but I mean, some of them you can't overcome, but education is is gonna be the key. And an educated adjuster is important, but an educated policy holder or claimant is also important. It's not, you know, don't gatekeep the information from them because the more they understand about what you're doing, uh, the less irate they're going to get when they have to wait that five days.

Chantal Roberts 40:46

Absolutely. And it and it also goes back to again, adjusters, and the C-suite and the marketing people, I get so upset when I teach this particular portion of the risk management book. Is oh, did you know that claims only has four steps? And one of them is the first notice of loss, and the fourth one is pay the claim. No, guys, if you're teaching that to the underwriter and to the agent and to the actuarial people, they're gonna look at the adjuster and go, what's taking so long? Because there's only four steps. No, there's not four steps. And guess what? The fourth step is not pay the claim. It's consider the claim or resolve the claim because guess what? A denial may be the the resolution of the claim. We don't pay everything that walks in the door. Anyway, I'll get off my soapbox. Um, but again, you're absolutely right. Knowing how to communicate this stuff is really

Claim Notes That Can Defend You

Chantal Roberts 41:57

important. And and that also bleeds down to our claim notes. And I've been talking, I or I've been mentioning, hey, be sure you write down, uh, I have made this uh figure or I've estimated this amount based off of our company guidelines. And then you need to go, here's the total or the total amount of damage is let's say $17,000, less the depreciation for the ACV, less the deductible for the total amount, because I will see notes in a file as an expert witness that just says wrote the uh payment letter and cut the check. Okay, but there's 15 payment letters and there's 15 checks. And yes, I have to go back and and do this, but that's a vague diary note. And one of the things that an adjuster needs to understand is that the DOI, the Department of Insurance, often has administrative rules that state your notes need to be in such detail that if you were hit by a bus, I could walk in and pick up handling your file. Because I know the inner workings of your mind. Now we don't need to know everything that you were thinking about the insured or the claimant, if you know what I mean. But you need to document why you made these decisions. Uh, what remains to be done. And I know that a lot of insurers are now using AI to summarize the notes every time. So, like when someone else picks up the file, that's great and everything, but you should be doing it too. Because I don't necessarily know if AI is picking up the right things. I I love AI, I trust it. But I verify it.

William Auten 44:03

Yeah, you you um yeah, I mean we could have a whole other thing about AI. Um I I'm starting to see clients um build AI policies into their um their agreements and contracts and we have an AI policy here. It's tough. Um it it's not it's not good enough to take over the job of a claims person, for sure. It's certainly not good enough to make decisions on claims um or recommend decisions. It's pretty good as an editor, uh an organizer, um but I uh I think it's got a long way to go. And I think there's some privacy things that it is always going to be I I don't know enough about it, but it seems like it's next to impossible to keep private information private when you're working with an AI system.

Chantal Roberts 45:06

Absolutely. Uh I always say that look, I I don't I try to keep my stuff private, but I know I'm already on the black web or whatever, like all of that's already been breached and sold or whatever. But going back to vague notes, how this specifically impacts like the specific adjuster, the one adjuster, is when the insurer, the fi the carrier, your place of business is sued by the insured for bad faith, it makes it hard to defend you by the defense attorney because it's been what, three years, four years, five years? You've handled hundreds of thousands of claims since then to remember what you were thinking and how you came up with that number. You know, because sometimes I look at it and I go, I don't, I do not know how they came up with that number. And you got to document that. So, and again, for the white paper, the C-suites and everything, you know, look, more staffing is needed for that one specific adjuster to have the time to do that. I don't, there's not much more I can say about that. We just need more people.

William Auten 46:28

I agree. You know, more people to the party.

Chantal Roberts 46:32

Yeah, besides the fact we'll have a lot more fun.

William Auten 46:34

Um it's a good party to join. I mean, it's a fun place to be.

Chantal Roberts 46:38

It is. I mean, I love being a claims adjuster. It's it's difficult, it's hard, but that's part of the the reason why I like it. Uh, but I also like the fact that I get to help people. And and there you go. Okay. So I would say the last warning sign that I see as an expert adjuster is again, and this is because adjusters are triaging or putting out fires and not really working the file to conclusion.

Template Letters And Paper Cut Lawsuits

Chantal Roberts 47:14

They're kicking the can down the road, are these template letters that are sent. And the adjuster doesn't remove the language that doesn't apply to the claim. So, for example, let's just say it's a homeowner's claim or whatever. Uh, a lot of these domestic carriers will have really long template letters, like 30-day letters. I'm still investigating your file. This is what I need to conclude the claim, and those kind of letters. And it will have that, and I I know because I've seen it when I was working the domestic carriers, you basically just get a box, right? And you type in the box, like you pick out, I want to do a 30-day letter, and it pulls it up, and you get a box, and you type in the box, and you hit print, and the letter is put in front of you. And then that's when you can, as an adjuster, edit that letter. Uh let's say, again, as an example, we've got a homeowner's claim. I don't know, a partial kitchen fire. So they can still live in their home and everything, right? And we don't have to have any additional living expense because I don't know, the stove is still good. Uh let's make it a living room fire. Okay, so living room fires because so we've got we've got kitchen, we've got bathroom, we got bedrooms. You can still live in that home, right? You just don't have a living room. So take out, and and the insured goes, yeah, I don't, I don't, I'm still living here, I don't need additional living expense. Take that portion of the letter out because what I have seen as an expert witness is when the insurer is sued for bad faith, the policyholder attorney points to that letter and says, see, they even knew that they had that coverage and they didn't give it to us. And and what the insured is doing is they're making a claim for additional living expenses all the way back to the beginning of the file, even though they've told you, and it's in your file notes, that you or that the insured doesn't need additional living expense. So what I'm saying is update the letter. It could confuse people with in applicable language or something like that. And for goodness sakes, if you can't, because I have seen it where all of these letters are printed out of the home office, and so you never get to see the letter or anything like that, I would make that in file note. I couldn't change the letter. Again, you're not selling your in or you're not, you know, throwing your insurer, your employer in front of the bus or anything, but you know, that's more of a systems issue, and you don't have any control over that. I would just say, I can't change any of the wording. I send it out as it is.

William Auten 50:46

There are a lot of things that can be automated in this business. Um, but you're right. If the automation is um dysfunctional in a way that it continually tells the insured it's 30 days, we're still waiting for the following information, and then it gives a laundry list of things, and you're not updating that because they gave you all those things, and three of the things on the list you don't really need from them anyway, right? Uh, because it's not pertinent to the claim. What you're doing is you're telling that insured that this person is just spitting out these letters to check a box that they did it, not to really handle my claim.

unknown 51:28

Right.

William Auten 51:29

And I think that's the point of what you're getting at is that um, and and if and if you are unable to customize those letters in a way that fits the claim that you're working on, you need to talk to your supervisor. Uh, and if nothing else, you need to document the file. The this letter keeps going out asking for the police report, and there was no police report involved, so it's frustrating the policy holder.

Chantal Roberts 51:56

And right. Um and you know, all of these things that we're talking about is just a paper cut and it's a paper cut and it's a paper cut, and it's almost like it's a death by a thousand paper cuts. And when I was doing research for the ROI of claims staffing and education white paper, one of the things that I learned was there was a market conduct examination by the by the Pennsylvania Department of Insurance. And this was a health insurer case, but it's still kind of relevant if you think about it. The health insurer was sending out these letters saying, hey, we're looking at your file, we're researching your claim or whatever. But the insurer, the the Department of Insurance found that the insurer, their form letters, wasn't adequately informing the insured of the status. So they got fined, a pretty hefty fine. I think it was like 14 million. Don't quote me on that. Read the paper. I don't I don't remember exactly, but that's what I'm talking about. So if you continually state that you need the information for the loss adjustment expense and the hotel bills, the grocery bills, all that kind of stuff, and they don't have it, but you can't take it off, you need to mention this. But yeah, absolutely. So anyway, yes, that's exactly what I was talking about. There, of course, there's gonna be gray areas and nuances and and all of that, but it all comes down to having enough staff and being communicative, I think. But when you see these warning signs, this is this is a warning sign, this is gonna explode on you. It's like the ticking time bomb. It's it's gonna go.

William Auten 53:43

Yeah, so adjusters, uh, you need to be um you need to be polite and you need to be um uh what's the word I'm looking for? Informative? Informative, but you need to demonstrate that you care about the the process of the claim.

Chantal Roberts 53:59

Empathetic.

William Auten 54:00

You need to do that individually, but the carrier as a whole um needs to focus on making sure that their operations also send that message that they're um that they care about their policy holder and they they care about doing things correctly and properly. And yes, that might mean making sure you don't pay claims you shouldn't, but it also means making sure you expediently pay the claims that you should.

Empathy As A Required Response

Chantal Roberts 54:27

I want to mention one more thing. Uh we were talking about when the insured gets upset and maybe like the tone of their communication changes, like their written communication changes. And of course, we're supposed to acknowledge and respond to communications, uh and the DOI says it's something like that reasonably leads one to believe that it that a response is necessary, right? And if the if the insured is saying, or the claimant is just going on like, you never do anything, you don't return my phone calls, you don't do this, and you don't do that, do we does that need a response? Technically, no, they're not asking for anything, but here's the deal they are crying out to the in the void for you to respond. And if you're silent about this, then that's a response. And and I don't want it to be a response because then the the silence is my adjuster doesn't care. The my insurance company doesn't care because they're not even responding to me. So you go, okay, Chantel, what do I say? This is when you respond with empathy, like you were saying, you you say, I hear that you I hear your frustration. I'm sorry I haven't been able to return your phone call. I have been in a meeting all day, or I've been in, you know, a court with a litigated file or whatever. Um, I was on vacation. I apologize for not responding, or or something that acknowledges their pain or their issue. And it goes a long way because if silence becomes its own communication and and it's not a good thing when someone is silent. Speak up, yeah, be heard, be heard, speak up for yourself. Yeah, so yeah, it's um

Where To Read The White Paper

Chantal Roberts 56:40

that's kind of it. If you want to uh read the all 37 pages, there's graphs though, so don't worry, there's some pictures there. Uh you can go to cmrconsulting.net slash appearances and then slash ROI claim staffing. We'll put a link in the show notes. And yeah, so that's that's it. Um, I think next time, Bill, I thought because we'd mentioned this a couple of episodes ago where we were talking about uh Medicare and Medicaid and the automatic liens that they have on files and what adjusters need to be doing.

William Auten 57:23

Yeah.

Chantal Roberts 57:23

I thought we should um talk about that.

William Auten 57:28

Okay. Um that is a little bit of a rat's nest, but I can I can speak operationally to what needs to happen kind of on the front lines. Yes.

Chantal Roberts 57:38

Um, yeah, that's what I'm talking about.

William Auten 57:40

All the carriers seem to have a different way to communicate the uh uh to the appropriate entities what they need to do. Yeah, but um nonetheless we can we can hit the high spots on that for sure.

Chantal Roberts 57:52

Absolutely. So that's gonna be on Thursday, June 18th. And so thank you for listening. Yep, be sure to share, like, subscribe, comment, because it helps the algorithm pick us up.

William Auten 58:06

Yeah. Yeah. All right, okay. So well, we'll we'll talk again soon. And uh thanks for listening.

Chantal Roberts 58:14

Yeah, see you later. Bye.

William Auten 58:15

All right, take care. Thanks for joining us on the Art of Adjusting Podcast, where we talk about life as an insurance adjuster. Hit that subscribe button real quick and tell all of your adjuster friends to check this out as well. For independent adjusting services, go to www.autin.claims. And for anyone interested in working as an independent liability adjuster, go to the contact us tab to join our roster.

Chantal Roberts 58:39

So this wraps up another Art of Adjusting podcast. If you enjoyed this podcast or this episode, please give us five stars and a review. It does help the algorithm pick us up. In the meantime, you can contact me at theartofadjusting.com for consulting and training purposes.