INSURANCE FRAUD PRIMER(Part -1-)
When reviewing a claim, one or more of these indicators may suggest a potential fraud. Indeed, the more you find, the higher the prospect of fraud and the more important it is to investigate thoroughly. Most policyholders are honest, a claim must be given every opportunity to prove itself genuine, inconsistencies naturally surface in a properly conducted investigation.

This series is broken down into the important claims fraud components. I will address each component on a weekly basis. This week I will start with the policy. What does it cover? what does it not cover? Is the person and property covered? Does it fall within the policy period? Have the exclusions and conditions been addressed? and more. The following areas should be addressed (at a minimum) as they relate to the insurance (policy) contract.


Loss within first year (or sooner) of purchase of coverage
Loss shortly before renewal/expiry of cover
Loss shortly after increase in coverage
Notification of claim after policy lapse/cancellation
Existence of multiple policies covering same loss
Premium payment abnormalities
Pre-loss enquiry re cover/claims circumstances
Non-disclosure/misrepresentation
Frequent changes of insurer
Gaps in previous insurance history
Evidence of significant over insurance/under insurance
Policy arranged via agent far away from insured's home
Poor claims history
Claimant appears to be different from policyholder
Questionable use of property/occupation at time of loss
Very knowledgeable about the policy

Time Management Tips For
The Claims Professional
Here are 10 practical claims time management tips by Robert Carper

1. Write things down
A common claims time management mistake is to try to use your memory to keep track of too many details leading to information overload. Using a to-do list to write things down is a great way to take control of your projects and tasks and keep yourself organized. Keep a claims “to-do” list and you will be amazed by the results.

2. Prioritize your list
Prioritizing your “to-do” list helps you focus and spend more of your time on the things that really matter to help you resolve claims. Rate your tasks into categories using the ABCD prioritization system. Areas such as 1st contact, telephone calls, file review/recall, follow-up, email mail replies, paperwork, new claim file reviews etc. are usually at the top of the list.

3. Plan your day, week and month
Spend some time at the beginning of each day to plan your schedule. What are the things you need to do to accomplish your claims closings goals? Taking the extra time to do this will help increase your productivity and balance your important long-term claims objectives with your more urgent tasks. All you need is fifteen to thirty minutes each day for your planning session.

4. Make notes
Have you ever thought about a claims issue (while away from your desk) and thought I will implement this. If so, carry a small notebook with you wherever you go so you can capture your thoughts. If you wait too long to write them down you could forget. Another option is to use a digital device.

5. Learn to say no
The “superman syndrome” dictates that we think we can do it all, when in reality, we simply can’t. Many people become overloaded with too much work because they over commit; they say yes when they really should be saying no. Learn to say no to low priority requests and you will free up time to spend on things that are more important like serving customers and settling claims. Let’s face it, you can’t say no to your claims job responsibilities but you can focus only on the items that contribute to successful claims outcomes.

6. Think before acting
How best to approach the claim to resolve it in a customer service focused and efficient manner, is a question you will want to ask yourself. How many times have you committed to something you later decided was not the most efficient approach? Before committing to a new task, stop to think about it before you commit. Simply ask yourself “can I do this in a effective manner”. This will help with timely claims resolution.

7. Continuously improve yourself
Make time in your schedule to learn new things and develop your natural talents and abilities. For example, you could take a class, attend a training program, or read a book. Continuously improving your knowledge and skills increases your effectiveness, can help boost your claims career..

8. Stop the Claims productively killers!
Claims productively killers warrant recognition and elimination. It is a good idea to evaluate regularly how you are spending your time. In some cases, the best thing you can do is to stop doing an activity that is no longer serving you so you can spend the time doing something more valuable. Consider what you are giving up in order to maintain your current activities.

9. Use a claims time management system
Using a time management system can help you keep track of everything that you need to do, organize and prioritize your work, and develop sound plans to complete it. An integrated system is like Microsoft outlook or in some cases, you can use a company provided proprietary time management system that offers claims time management solutions.

10. Identify bad habits
Make a list of bad habits that are stealing your time, sabotaging your goals, and blocking your success. After you do, work on them one at a time and systematically eliminate them from your claims work model. Remember that the easiest way to eliminate a bad habit, it to replace it with a better habit.

Useful Insurance Links Part -1-
This is part one of the Claimstrainer useful insurance links series. This five part series will unfold in the next five weeks providing you with the most comprehensive insurance links available.

Property Casualty Insurers Association of Americahttp://www.pciaa.net/sitehome.nsf/main/
American Institute for CPCU and Insurance Institute of Americahttp://www.aicpcu.org/
CPCU Societyhttp://www.cpcusociety.org/
CIC Societyhttp://www.scic.com/
National Association of Insurance Women - Local Chaptershttp://www.naiw.net/
National Association of Insurance Womenhttp://www.naiw.org/
National Alliancehttp://www.thenationalalliance.com/
Risk Insurance Managers Societyhttp://www.rims.org/
Society of Insurance Researchhttp://www.sirnet.org/
Insurance Journalhttp://www.insurancejournal.com/Business Insurancehttp://www.businessinsurance.com/
Insurance news links http://www.insurancejournal.com/
All 50 departments of insurance http://www.ican2000.com/state.html
AM Best http://www.ambest.com/
Natl assc. of insurance commissioners http://www.naic.org/
National Highway Traffic Safety Administration http://www.nhtsa.dot.gov/
U.S. Consumer Product Safety Commission http://www.cpsc.gov/
Officer.com http://www.officer.com/links/Agency_Search/
Fire departments USA http://home.flash.net/~jturner/map.htm

More Cars On Road, But Fewer Get Stolen

Experts Credit Anti-Theft Technology

The number of vehicle thefts reported in the United States has fallen to a 20-year low even as the number of vehicles on the road has doubled.
Experts with the Highway Loss Data Institute point to more sophisticated anti-theft technology in cars and increased efforts by police to target organized car-theft rings for the decline.
The FBI estimates that 956,846 motor vehicles were stolen in 2008. That's less than half the rate in 1991, when a high of 1.66 million vehicles were stolen. Complete data for 2009 are not yet available.
The Alliance of Automobile Manufacturers estimates there are more than 245 million vehicles on the road today, up from 122 million in 1989.
Cars these days routinely include such things as ignition immobilizers, which makes it hard to start a car without the owner's key. Whereas only 5 percent of new cars included the device in 1989, today more than 86 percent have them, according to research from the Highway Loss Data Institute.
The institute also credits other anti-theft technology, such as alarms and GPS tracking devices, for helping cut down on auto thefts.

Adjusters tip # 14

Adjusters Need To Read And Digest
by Robert Carper
Information is the life blood of successful adjusting. We obtain this valuable commodity via a variety of ways. Most often it is from voracious reading. Reading what? Well, there’s the policy, claims best practices, case law, company provided data, repair estimates and accompanying reports, email, industry publications and the list goes on. The ability to read and comprehend is of paramount importance. Reading seems so simple but very few do it effectively and efficiently. If we don’t read and grasp the necessary facts properly then bad decisions and bad results will likely follow. An effective adjuster must not only be able to read and understand an insurance policy, forms, endorsements etc., he or she must also actually intelligently read many documents. This sounds simple, but many adjusters simply don't take the time. They will say” oops, I missed that on the report”, or “oh no, I glanced at the case law and missed that supporting documentation” etc. With good intent but with huge demands on our time the aforementioned has happened to all of us. Effective reading goes a long way in addressing these potential shortcomings.

Aside from the huge amount of information on the internet that will help resolve claims, there’s the claims technical material that has to be read and digested. Moreover, just as a mechanic from twenty years ago can’t knowledgably work on a new model car without reading and self educating, the adjuster will need to read and learn from a variety of sources to remain effective. Reading is important. Digesting what you read is all the more important.

Next up – Adjuster listening skills

Thoughts on "CAUSE & ORIGIN"

The development of NFPA 921, Guide for Fire and Explosion Investigation, and recent court decisions pertaining to the reliability of scientific evidence and expert opinions such as Kumho Tire Co. v. Carmichael and Daubert v. Merrell Dow Pharmaceuticals, Inc., continue to change the rules of fire investigation. These changes have advanced the profession by requiring that investigators use the scientific method and base their opinions and conclusions on science and not on experience alone.

Fire cause & origin determination is the applied science of finding out where, how, and why a fire has started. By carefully observing and accurately interpreting smoke, heat, and fire effects on combustibles and other materials like metals, an investigator is guided to what is known as the "area of origin" of a fire.

So what should ask to get the investigation started right?

• What caused the fire in this case?
• Could the fire be the result of a manufacturer’s defect or improper service/repair work? What was the condition of the engine and transmission prior to the fire?
• Is there a likelihood of arson?
• Can subrogation be successfully pursued in this case?
  Typically, we need to determine the area where the fire began, and the investigator then sorts through it in search of potential ignition sources, examining each closely.
  

Once all the potential ignition sources are found, the weeding out process begins, and an ignition source which best fits the fire's circumstances is finally identified as the others are ruled out. This methodology applies to just about any fire scene, whether it be at a car, a boat, a house, or a factory.

Questions typically asked:

Isn't investigating a fire the fire department's job?

The fire department has a lot of jobs, and determining a general fire cause is usually one of them. But although firefighters are trained in fighting fires, few fire departments have investigators specifically trained in chemistry, electricity, and other technical aspects of fire causation investigation.
Mainly for statistical purposes, fire department reports typically list the suspected fire cause in more or less general terms (i.e., electrical, smoking, etc.) if the cause was accidental. If the fire was intentional, the fire marshal must prove a crime was committed, but only rarely are criminal charges actually filed - mainly because 84% of arson cases remain unsolved.

Who else investigates fires?

Forensic engineers (and some private investigators who typically have law enforcement or fire service backgrounds) also determine the origin and cause of fires.
These investigators are usually independent contractors who mainly work for insurance companies, but sometimes also investigate fires or a fire's affects for attorneys, private individuals and companies. Origin and cause investigations are usually conducted with the cooperation of the local fire department and municipal investigators.
The forensic engineers' investigations are typically more technical in nature and more detailed, and are especially useful for potential "subrogation" cases and fires of a technical nature (electrical failures, for example).

What's a "forensic" engineer?

Just about any type of occupation can become a "forensic" one. There are forensic pathologists ("Quincy"), forensic engineers, even forensic accountants. "Forensics" deals with arguing your case, whatever your expertise may be, in court.
Engineers are technically trained in physical sciences, and many also become qualified through further experience and training to argue about fires and accidents.
What's "subrogation"?If an appliance fails and causes a fire, or if a repairman does shoddy work and a fire results, insurance companies will occasionally demand reparation for the ensuing damages in an action known as subrogation, and many times they'll use an independent forensic engineer's report to convince the other insurance company that their insured was responsible for the fire.

If a hair dryer catches fire, such as the one pictured at left, the forensic engineer must determine not only that the dryer caused the fire, but he must also be able to explain the technical details of how the hair dryer failed and why. Based on the report, the manufacturer's insurance company will then be asked by the homeowner's insurance company to pay for the damages.
The manufacturer's insurance company will typically retain its own fire expert to review the other's report, and the case is then settled or argued later in court.

What about intentionally-set fires?After an intentionally-set fire (popularly known as "arson") is investigated by the fire department or fire marshal, the case may or may not get the support of the district or state attorney, depending on the strength of the evidence.

If it does go to criminal trial, the evidence presented to a jury must be able to overcome the "reasonable doubt" concept which applies to innocence or guilt. This isn't always possible with a clever fire-setter who starts a fire to collect insurance money. The conviction rate nationwide remains consistently at a paltry 2%.

If such a fire was intentionally-set but no charges are filed or the arsonist walks, forensic engineers can often provide the insurance company with an extra safety net. Based on the investigator's report and the background information their own internal SIU (Special Investigations Unit) provides, an insurance company can deny the insurance claim of losses resulting from the fire.

In such a case, though, a civil trial can result and the insurance company must prove that it had reason to believe that the fire was intentionally-set for insurance fraud - and the independent fire investigator is then called upon to argue his position.

THE CLAIMS FIRST CONTACT

The successful claim outcome is dependent upon how the claims professional starts the process. Paramount is the “first contact” with those involved in the claim. In order to guide the claim process to a proper resolution you will want to begin with the following steps:

Review of the initial claim facts
Review and assessment of all parties involved
Retrieval of support documentation
Initial determination of cause or at fault party
(This may change as facts reveal themselves)
Formulate an interview guide (questions to ask) to secure the facts

Secure the following:
What happened?
When did it happen?
Where did it happen?
Who was involved?
Why did it happened
Who witnessed it
Review contributing factors etc.

Once the aforementioned has been secured, then you should have your core content to move forward with the first contact process. Depending on the claim type, (property or casualty) you will move your investigation in the direction that extracts the facts you seek and need. Important questions like “why” mean a lot. Opened ended questions that encourage discussion will lead to more claim information. Effective probing offers many opportunities. Know how to probe comes with experience and the proverbial “gut feeling”. I will write a blog update on this topic in the coming weeks. Think of the aforementioned on your next first contact. Seeya

Robert Carper