An Adjuster’s Review of the Insurance Industry
I’ve worked in the claims environment in nearly every imaginable setting throughout my adult life. I’ve developed an insight and intuition to read between written lines, but also between facial lines. I’ve developed a healthy cynicism when needed, a compassionate soul when elicited and an honest tongue when allowed to express it.
I’ve attended several insurance claim conferences this year. I’ve been in adjuster meetings where contractors were not invited. I’ve been smuggled into contractor meetings where adjusters were not invited. I’ve been to significant conferences where contractors were invited to participate with insurance vendor program execs and have been amazed at the absence of rank and file adjuster attendees. You know who I mean: those folks you might run into at a loss — the adjusters who actually handle the claims.
I’ve watched as an insurance company claim VP told adjusters they should not refer to obvious hail indentations on a roof as “obvious hail indentations on a roof.” Rather, they should refer to them as “indentations of unknown origin.”
I’ve also seen insurance company execs say they want to pay what’s owed and uphold the promises they made to policyholders. As an independent adjuster, I prefer to work for the latter group.
My experience this year tells me the largest area of contention among all types of claims is the common household water loss.
My experience this year tells me the largest area of contention among all types of claims is the common household water loss. And I’m convinced that no matter what restoration industry course of study and credentials you’ve pursued, if you encounter the wrong adjuster, your efforts will have been for naught. But there are plenty of good adjusters out there. Finding them is the trick.
WHO IS UNDERWRITING TO WIN?
Nearly every major line of business went south in terms of the dollars paid out versus dollars taken in this year, according to the Insurance Information Institute. Basically, insurer profitability is measured by its combined ratio, which means “incurred losses plus operating expenses divided by earned premiums.”
State Farm underwrites the most at $64.5 billion with a combine ratio of 109.86. The 10th is Farmer’s Group with $14.6 billion and a combined ratio of 103.49. Somewhere in between, you’ll find Allstate, Liberty Mutual, Progressive, Travelers, USAA, Nationwide and AIG. Among the more profitable companies is Berkshire Hathaway with a CR of 95. That’s Warren Buffet’s company. He’s been known to bring his own beverage on airplanes to save money.
You would do well to find out who represents these companies in your operating territory.
WHO IS HANDLING THE CLAIMS?
A large number of claims (perhaps 30 percent) are handled via telephone by adjusters several states away from the loss. The smaller the dollar amount, the more restrictive and defensive the adjuster tends to be. That’s because these tend to be the least experience adjusters, and they’re defensive, insecure and pre-dispositioned to think contractors are greedy and dishonest. Yes, even program contractors. That’s why I hear so much grief from approved program contractors, and that’s why the increase in contractors supporting the “rebel” disposition.
Certainly 50 percent of property claims are handled by catastrophe adjusters. The more experienced among them will be cooperative. Oddly, they work on a fee schedule that stipulates the higher the claim the more they make. Think about that. Nevertheless, they are ethical and practical. You’ll find them to be fair in resolving claims.
The final group is primarily represented by independent adjusters who work in the field and generally in the location where the loss has occurred. They can be great allies for the restoration contractor. They have a sympathetic entrepreneurial mentality and frequently have an alliance with contractors for the purpose of corroboration of damages.
WHO LOSES/WHO WINS?
As a contractor, you can win at this game. That doesn’t mean the insurer or the property owner was the loser. And it doesn’t mean you have to grovel for business in order to win the favor of adjusters. You can do it in a sound sustainable manner and with integrity and profitability if you find the right adjusters to work with. Some adjusters can be wrong for you.
If the ultimate goal is to satisfy the policyholder, neither of the parties involved in fulfilling that promise (i.e., the insurer or the restorer) has to be the loser or the winner. Find the right adjuster. RIA
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