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Analog Adjusting in a Digital World by Jack Gibson
Posted: Tuesday, July 14, 2009 - Comments: 0
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As we complete the change over that we have been working on for the last two years (between assignments) we will move past articles to this page.  If you have an account and have a flare for writing and wish to write an article just login and you will see a link below titled "Create Article".  Also if you wish to add comments to the articles you will need to login first.

Adjusting Articles

16

This article comes from a forum post that was made by rass3742 on 9/12/2006

One thing I’ve noticed is the incessant struggle between newbies and veterans of our industry, as they scrimmage to identify the paradigm of CAT adjusting.  As a veteran of claims adjusting myself, I have taken the long road here and know that I am better for it.

I have just recently become “active” in reading and posting comments; as such, I hope I am not breaking the rules of CADO by bringing the bulk of a post I already made into this thread.  I just think it’s a topic at the front of so many minds here that it might be of interest as its own discussion.

What I’ve been seeing, in a lot of the posts in the CADO community, are seasoned adjusters who are struggling with the seemingly never-ending complaints of start-up adjusters who aren't being handed a living on a silver platter.

Understanding that all things are relative is the first step to getting a grasp on others' opinions.  In the opinion of a person wanting to get into the industry, they are grasping at any training/experience they can, so they will be employable; but they can’t understand why claims managers aren’t calling them.  At the same time, the seasoned adjusters (which eventually become those claims managers) are remembering everything they went through to get where they are: the years of adjusting claims; interacting with other insurance departments and outside customers like underwriting (personal lines and commercial lines), loss control, legal (appraisals, arbitrations, mediations, lawsuits), agents, experts (contractors, engineers, attorneys, accountants), public adjusters, insurance commissioners; and the hours and hours of researching policies and legal decisions, reviewing PILR (Property Insurance Loss Register) decisions and performing peer-review, to determine if their claim is covered.  There are also numerous adjusting theories/tasks to consider like depreciation/betterment; co-insurance; under insurance; estoppel; proximate cause; concurrent causation; ensuing damages; cause & origin; fraud; insurable interest; other insurance; existing damage; prior losses; definitions; deductibles; care, custody & control; statutory provisions; obsolescence; detrimental reliance; mitigation; subrogation/salvage; loss settlement and loss payment; inherent vice; consequential losses; ordinance or law; limits and sub-limits of liability; Replacement Cost v Actual Cash Value; exclusions; Waivers; Reservations of Rights letters; claimant motivation; bad faith; errors & omissions; fluid pricing; fair/unfair claims practices; fiduciary duties; moral hazard and morale hazard; litigation management (yes, it’s too late to start thinking of this after the suit has been filed); alternate dispute resolution; ambiguous policy wording; proper investigation; prompt reporting; reserving; consumer protection; loss site safety (for the adjuster, the insured and the public); as well as many others. 

There are more components to a claim than just damages.  There’s an old industry acronym: D.I.C.E.  It stands for

Declarations
Insuring agreement
Conditions
Exclusions

Those are the four main components of an insurance policy.  Did you see Damages in there?  No.  Now don't get me wrong - damages are obviously an important part to resolving a claim, but not until the items listed above have been considered.  And failing to do so will trip up an adjuster quicker than his own untied shoelaces.

The claims managers inherently look at claims with far more insight than just banging out a bid for some roof shingles and wet drywall.  But when they review their list of available candidates, they realize the huge influx of inexperienced adjusters.  Since they are charged with a fiduciary responsibility to the carrier, they have to carefully consider those they bring into their employ.

There is a lot more to hiring adjusters than just finding people that want to become an adjuster, depending on the circumstances.  If two or three large storms hit within a few weeks, everyone works; problem is, we haven’t seen that this year.  But until that happens, not so.  I think what has happened is that due to the explosive nature of the last two CAT seasons, a lot of people outside of, but near, the industry (contractors, building consultants, etc.) have caught the bug.  So now supply and demand shows up, from another angle.  All of a sudden, there are “boot camps” and “adjuster crash courses” falling from the sky.  Now all of the guys and gals who think adjusting is an easy buck line up to give their hard earned money to these people, with the hopes for a big payoff.  That’s when the next example of supply and demand kicks in; now there’s hundreds, if not thousands, of new adjusters who have passed their crash course and their on-line state licensing test and all want to go to work tomorrow.  In a year like ’05, you bet, most of them are being given claim files; but in a lean year they’re not at the top of anyone’s list.

Now, for the newbies in the crowd….if we’re talking about CAT work, my last few paragraphs address it.  If, on the other hand, you’re talking strictly about an entry-level position in the industry, with a mainstream carrier, I would encourage you to go full-steam ahead.  Put out resumes that show you’re looking for an entry level/trainee position.  There are many carriers that prefer trainees so they don’t have to “deprogram” them.  Then be willing to spend the first month or two reading policies and doing correspondence courses before being given your first claim.  As the claims start coming, they will get more difficult and challenging and before you know it you’ll have two years under your belt and will have dealt with issues and theories you never thought of; you’ll also be far more prepared to jump into the CAT arena and really make a difference, for yourself and your insured.

If you decide you want to be a Firefighter today, you won’t be driving the big red truck tomorrow; they don’t just hand you the keys.

>>> Click here to visit the thread in the forum archive. The thread contains 67 replies. <<<<

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