THOSE LITTLE TERMSby Robert Carper
SIU, SUBRO, BI, IA, RAC, CP, BOP, ARB are some terms we as insurance professionals use on a regular basis. We are familiar with this lingo and it is commonly an efficient way to communicate.

However, sometimes the customer, insured and claimants and others typically are confused and put-off by such terminology. As we all seek to enhance and improve the customer experience, we should try to eliminate these or minimize these terms in our customer communication. Many of these terms aren’t understood by the customer. As we verbalize such terms we may find in some cases the customer will find someone who does understand them which could mean the retention of an attorney, public adjuster or others who will possibly perplex the claim path to resolution. Often times plain English works best.

Remember, unless you have educated the customer in this area, acronyms privy to the insurance industry sometimes results in puzzlement for our customers.

SIU - Special investigations unit
SUBRO - Subrogation
BI - Bodily injury
PD - Physical damage
IA - Independent appraiser
RAC - Report of accident claim
CP - Commercial Property
BOP - Business Owners Policy
ARB - Arbitration

How is your insurance claims knowledge?
Try this 10 question self-grading test and you will know

(UN) Fair Claims Practices Act

Fair claims practices represents ultimate oversight
over the claims process. Bad faith is of concern when
handling claims but of equal concern is the fair/unfair
claims practices act. So just what is it?

The Unfair Claims Practices Act, also known as the
Unfair Claims Settlement Practices Act is legislation designed
to protect consumers from inappropriate conduct of insurance
companies.

The act permits insurance regulatory authorities to take legal
action against an insurance company that engages in certain unfair
claim settlement practices with such frequency that it amounts to
a general business practice. The eight core fair claims practices
components (depending on the state in which you handle claims)
are as follows:

You must acknowledge the claim
You must process claimant/Insured claim promptly
You can't misrepresent your policy
You can't influence other policy settlements
You can't force claimant/Insured to settle for less
You can't force the claimant/Insured to travel
You can't appeal excessive amounts of claims
You Can't refuse or delay claims without a plausible reason

The phases of the typical claim are divided up into several very important categories. The initial contact, the investigative phase, coverage analysis, appraisal, documentation securing negotiations and settlement, to name a few. The most important of which is the first 24 hours following a loss. They offer a one-time opportunity to minimize the loss and direct its outcome. One thing is certain, the first 24 hours will not return. The effective adjuster will use those hours to uncover the unique hazards and opportunities in that loss, and out of a broad palette of alternatives, address the critical needs. The key areas that warrant attention during the first 24 hours of a claim consist of :

Securing the claim facts
Reviewing and confirming the coverage
Deterring the type and extent of damages
Discovering the witnesses
Securing the support documentation
Instructing the insured as to what to do, how to it and when to do it
Establish rapport with the clamant and/or insured
Get statements while the information is fresh in the minds of the involved parties
Make assignments to vendors and peripheral support people such as appraisers
Mitigate damages
Document the accident scene
Establish the claims adjusters role in the claim process

Many claims may come to conclusion during the coverage review in the first 24 hours but often times they continue because that phase was not properly addressed. This tends to be costly, creates legal exposures and diverts attention from other areas that warrant necessary attention.

When I first heard of this term, I thought it was only engaged during a court trail. As I became more experienced with EUO’s I discovered what a useful tool this is in securing relevant claim facts and how it serves as a claims investigative guide.

The examination under oath is intended to enable the insurer to obtain any and all information known to the insured or within the insured’s possession or control which may be material to the claim. The examination permits the insurer to observe the insured’s demeanor and trustworthiness, and to obtain detailed information concerning the insured’s claim.

The Examination Under Oath (EUO) is a formal proceeding taken before a court reporter and recorded in a verbatim transcript. Every question which is asked and every answer which is given is made a part of the record. Many insurance companies now videotape the Examination Under Oath, as well. It is usually conducted by an attorney hired by the insurance company for that purpose. The insured has the right to be represented by an attorney and often appears with counsel
An examination under oath (EUO) is one of many tools an insurer has at its disposal to assist it in investigating and adjusting claims which have been submitted. As such, if your clients issue insurance policies or merely purchase them, it is imperative that you understand the issues related to the conducting of an EUO.

An EUO is one of the most effective tools an insurance company has in its search for the truth. The EUO provides the company a unique contractual opportunity to gather material facts and information relevant to a claim presented. Although an EUO has some similarities to a deposition, there are some very important distinctions which, if not considered, can put you or your client at a very distinct disadvantage. These differences arise from the fact that an EUO is the product of a contractual relationship between an insured and their insurer while a deposition is generally conducted during the course of litigation.

Most commercial and personal lines insurance policies, including homeowners, auto and general liability policies, contain provisions which allow an insurer to demand that an insured and certain other parties submit to an EUO. Generally, the policy provision which provides for an EUO states as follows:

Claimstrainer Legal Terms And Concepts for Claims Professionals

This starts my series on legal terms and concepts for claims professions. I will explore and define legal content as it relates to claims handling. I start with the basics first and move on to more advanced legal claims concepts. This series will span all of about a month being presented in this blog as need warrants. That said, we will start with the term "litigation"

Litigation is the process of bringing and pursuing a lawsuit. Litigation
often proceeds much like trench warfare; initial court papers define the
parties' legal positions as trenches define battlefield positions. After
the initial activity, lawyers sit back for several months or years and
lob legal artillery at each other until they grow tired of the warfare
and begin settlement negotiations. If settlement is unsuccessful (90% of
all lawsuits are settled without trial), the case goes to trial, and may
be followed by a lengthy appeal.

Many states have enacted reforms directed at shortening the time a case
takes to get to trial and minimizing the expense traditionally
associated with litigation. Among these reforms are:

* "fast track" rules that prohibit delays and require each phase of the
case to be completed within a particular period of time * limits on how
much information can be obtained from the opposing party * requirements
that certain types of cases be arbitrated (a simpler procedure) rather
than pushed through the court system * requirements that attorneys
inform their clients of alternative dispute resolution procedures such
as mediation, and * court-sponsored techniques such as mini-trials and
early neutral evaluation that are designed to get the parties to settle
by giving them a realistic assessment of what is likely to happen if the
case goes to trial.

2010 Storm Names

The following names will be used for named storms that form in the North Atlantic in 2010. Retired names, if any, will be announced by the World

Meteorological Organization in the spring of 2011. The names not retired from this list will be used again in the 2016 season.

This is the same list used in the 2004 season with the exception of Colin, Fiona, Igor, and Julia, which replaced the names of the four major hurricanes that made landfall in Florida in the U.S. in 2004: Charley, Frances, Ivan, and Jeanne, respectively.[4]

1. Alex (unused)
2. Bonnie (unused)
3. Colin (unused)
4. Danielle (unused)
5. Earl (unused)
6. Fiona (unused)
7. Gaston (unused)
8. Hermine (unused)
9. Igor (unused)
10. Julia (unused)
11. Karl (unused)
12. Lisa (unused)
13. Matthew (unused)
14. Nicole (unused)
15. Otto (unused)
16. Paula (unused)
17. Richard (unused)
18. Shary (unused)
19. Tomas (unused)
20. Virginie (unused)
21. Walter (unused)
    
    

Xactimate Estimate Primer (Property)

Want to know how to write an Xactimate estimate? Well, I put together a brief primer on how to write one. This primer provides a step by step guide on how to write an Xactimate estimate. I will post the more detailed version at a later date. For now, this should acquaint you with the process. This is based on Version 2.5. Simply click on the navigation buttons at the bottom right.

The Reserve

With most carriers, the general reserving philosophy is the "Most Probable Outcome” payout of the claim and not necessarily the worst case scenario. In most cases, you will want to reserve an individual exposure based on what the best estimate is of its most probable outcome based on the information available at the time the reserve is being set. As the investigation advances you want to reevaluate the reserve. The reserve should factor in but not be limited to:

• Amount of estimated damages
• Anticipated / updated payout
• Depreciation expected on an ACV policy
• Deductible
• Coinsurance
• Expected payout supported by the documentation or will there be
• Other contributing coverage’s
• Probable, proper and likely negotiations to resolve the claim
• Policy limits – this obviously would place a maximum on the reserve amount
• What coverage items are involved, personal property, building, income loss, value of vehicle, loss of use, rental etc.
• Possible Supplements
And more, depending on your claims reserving best practices

Coinsurance (Briefly Explained)

COINSURANCE IS...

Coinsurance is a contractual requirement that the insured carry agreed upon insurance-to-value, as specified by a percentage (usually 80%, 90% or 100%) entry on the Declarations page. If, at the time of loss, the limit of insurance is less than the value of the property times the coinsurance percentage, the insured will become a "co-insurer," along with the insurance company, when a loss occurs. While the coinsurance clause is effectively an "penalty" for underinsuring, another way to look at it is that it's also an incentive to insure to value. You can also insure on an agreed value basis which suspends the coinsurance clause. This is normally done on a full insurance to value basis.

The purpose of coinsurance is not to punish an insured for carrying inadequate insurance-to-value, but rather to provide a financial incentive that:

(1) encourages them to carry adequate limits in the event of major losses, and (2) rewards them (in many instances) with a significant premium reduction for doing so.

Why do insureds need an incentive to carry limits of insurance approaching the value of their property? Simple...because, in the aggregate, most losses are partial and don't result in a total, or even substantial, loss. Without a financial incentive, insureds who are not risk aversive might be inclined to purchase relative small limits of insurance. Since that inclination depends, in part, on the structure and occupancy of the building, the amount of the incentive is largely determined by those factors.

Claims Coverage Investigation (Property)

Read the Policy

To understand a first-party property policy of insurance, the adjuster must read and analyze the policy in a logical and thorough manner. The facts of each individual claim clarify and color the interpretation of the policy contract and bring different nuances to the policy wording. The adjuster must know what coverage is available to the insured, the limits of liability, the territory limitations, and the exclusions, conditions, and endorsements attached.

Before beginning to investigate a claim, the adjuster must first establish or confirm coverage. Many claims need not go forward if the coverage analysis discloses there is no coverage for the loss. Yet in many cases, the file handler proceeds only to find out later that there was not coverage at the outset.

To do this, he or she must get a complete copy of the insurance policy. The company’s copy usually has only a “declarations page” and partial copies of standard forms. However, the policy can be recreated from the declarations page and standard forms from the underwriting department. By viewing a current copy of the policy in the possession of the insured, or automated information on the insurer’s computer database, the policy coverage can be confirmed. The adjuster must also determine the policy limitations and determine the perils insured against. The adjuster must be familiar with each of the exclusions or exceptions from coverage.

Areas to consider in coverage analysis:

• Date of claim does it fall within the policy period?
• Location of claim - Does this meet the contract definition
• Listed Property - is this actually a property we insure
• Exclusions - is the peril excluded
• Endorsements - Is there an endorsement for this peril
• Person - Is the person we insured involved legally with the property
• Peril covered - do we have a covered cause of loss
• Conditions met - have the policy conditions been met or breachedand other peripherals

When handling property claims, the aforementioned list serves as a viable start. Depending on your best practices guidelines and claims investigation requirements, you may add more to this list

Fire recorded statement

Should You Take a (Property Fire) Recorded Statement?

In the course of an investigation, you need to decide whether or not to preserve a person's verbal testimony in a recorded or written statement. Preserving testimony is valuable because memories fade, stories can change over time and parties can be difficult to locate as time passes.

Try the following:
1. Use General Opening Statement.
2. Identify person being interviewed:
a. Full name (spell it), age, address, marital status. b. Employer, nature of occupation.
c. Connection of person to loss - owner of damaged or destroyed prop­erty, witness, fire investigator, etc.
3. Establish circumstances surrounding loss:
a. When and where fire occurred (date, hour, location of premises)? b. Who discovered fire and turned in alarm?
c. In what part of premises was fire discovered burning?
d. What caused the fire:
(1) Can it be clearly attributed to a faulty product or to a person's negligence?
(2) By what means was fire extinguished - e.g., volunteer, public, or private fire department; sprinkler system? (Determine whether property was protected by sprinkler system and whether it was on at the time of fire; if system was off, find out why.)
e. Were police and fire departments notified? (If so, determine whether they investigated fire, and get names of persons conducting investigation.)
f. Find out if fire spread to premises from another building or from a tenant's residence in the same building. (Check carefully for possible subrogation.)
4. Have there been any previous fires on premises?
5. Does insured have insurance with any other carrier? Has he (it) ever? 6. Obtain facts and estimates of damage:
a. Extent of damage; area involved (e.g., number of rooms, dimensions). b. Repairs already made or under way; date and nature of repairs (i.e.,
temporary or permanent).
c. Estimated cost of repairs; name and telephone number of person giv­
ing estimate.
7. Use General Closing Statement.

USA Police & Fire Departments

I worked property and liability claims during my claims career. Often times during the outset of my investigation, I would ask if there was a quick reference to access USA police and fire departments. Well,I found two such sources for you. You may have heard of these two sites. If not, they should prove to be helpful. I will update this post as I discovered more sites such as these. If you have similar sites please submit them.

SIU Presentation

SIU (Special Investigation Unit) is an integral part of insurance investigations. Insurance fraud is the act of falsifying or exaggerating the facts of an accident to an insurance company to obtain payment that would not otherwise be made. Common types of insurance fraud are staged accidents, exaggerated injuries, and inflated medical bills. We have developed a SIU training module that addresses SIU investigations fully. The complete course is 44 slides and contains full content, audio, self grading test and much more. See sample clips below.