As a resident of North Texas, I have received numerous (unsolicited) solicitations from roofers claiming to be "insurance claim specialists". But I often wonder, what makes them an "insurance claim specialist" or a "roof claim specialist"? Is there a formal accreditation process or professional designation? Is there a license or any form of oversight or regulation? Best I can tell, the answer is no!
The Oklahoma Insurance Department got it right when they issued a special notice last year stating that "Roofing contractors that advertise to be “claim specialists”, claim analysts”, who refer to “denied claims”, “deductibles” or assert they “deal with insurance companies” in their advertisements are acting as unlicensed public adjusters".
The insurance industry, and the professionals that serve it are among the most regulated group of individuals in America! You may not market or sell coverage, adjust or settle claims, or even discuss the business of insurance without the appropriate license. Licensed are renewed regularly, only after individuals have completed the prescribed number of continuing education hours.
Now let's look at roofers. Is there a parallel? Have they ever read a policy? Do they know which type of policy the homeowner has? Do they understand the policy?
If an insurance professional were to advertise that they were a specialist, they would likely run afoul of the 30+/- page manual of advertising rules and regulations in the insurance industry.
Just take a look at this advertisement! First of all, does she even know that an insurance policy is a two-party contract between the policyholder and the issuing insurer? The only way that the company that she represents can "deal" with your insurance company is if you appoint them to do so, in which case they become a Public Adjuster.
The other aspect of all of this that baffles me, is why a homeowner would trust a stranger who pulls up to their house, knocks on their door, and promises to deliver a great outcome, versus working with the agent and insurance carrier they have been working with for years to achieve the outcome they are entitled to.
Makes no sense to me!
Last week the Texas Supreme Court held that recovery of medical or health care expenses are limited to "the amount actually paid or incurred by or on behalf of the claimant," precluded the introduction of evidence of medical bills that had been billed to the plaintiff but that the plaintiff was not obligated to pay.
So what does this have to do with homeowners property losses?
Everything! 
The ruling which can be found here for you legal eagles, essentially deals with the difference between "list prices" for medical services, and the "negotiated prices" that most healthcare organizations pay.
The fact is that in homeowners losses the exact opposite occurs. Insurance carriers pay indemnity based on list prices with no regard for what the homeowner actually pays - which is usually less.
In other words, pricing is being set artificially based on a black box algorithm controlled by 3 or 4 estimating software companies.
One alternative is bringing the concept of direct repairs for homeowners property losses and a managed repair network into the policy.
In the event that a homeowner wishes to retain their right to have the repairs done by the person or entity of their choosing, based on pricing derived from estimating software, they are free to do so. However, in the event that they are willing to select at the time of renewal the option to utilize the carrier's managed repair network, they receive a discounted premium and reduced deductible.
The concept is straight-forward. If carriers through service partners such as Service247 can reduce claim costs, these can be passed through to policyholders. A win-win for everyone.
Any way you slice it, whether in healthcare or homeowners, indemnnity should be limited to the amount actually paid or incurred versus hypotheitical pricing that ultimately ensures that insurance carriers pay the highest possible amounts for any given item.
A consistent theme of my blog posts both here and on our prior platform at Insurance Matters has been the importance of people, process, technology (and training) in the claims professional.
Yesterday Christopher Tidball authored an excellent piece entitled "Gaining a Competitive Edge Through Innovative Claims Processes" with the sub-heading "Using People, Process, and Technology".
The authori provides specific examples of areas that can advance the claims process in both a clear and concise way that while basic, is an important starting point for the profession.
Earlier this year my colleague and I gave a presentation at the PLRB Claims Conference in Nashville, TN that highlighted many of these same points. Ironically, the feedback from many in the audience was that they believed that they were already doing these things and that there wasnt alot of "innovation" in thee concepts.
I'm here to tell you that reality could not be further from the truth. I hear this every day as I speak with claims professionals. A common refrain is "we are already doing that stuff". Bottom line is that I'm not sure that many claims executives are being intellectually honest with themsleves about this - and I'm not sure it is really their fault.
Claims is often an afterthought among C-level initiatives. I hear all the time that "we want to focus on the revenue side" - underwriting, agent or policyholder based systems and intiatives. While I get it - I'm not sure its entirely logical. If claims consumes 70% plus of every premium dollar, where are you going to get more bang for your buck, increasing premiums by 3% or reducing claim costs 5%, and which is more realistic?
If you are a regular reader of this blog (you can find my older posts here) then you know that I believe the insurance industry is the most regulated business in America. While I believe that insurance regulation serves an important purpose, I also believe strongly in free markets and see the regulator's roles as ensuring that markets operate properly and step in when they do not. However, I am disturbed daily by the differences in insurance and other industries.
Take banks for example. While today's headlines will scream about the $8.5 billion settlement Bank of America and its Countrywide unit will have to pay, it seems that no-one is guarding the consumer on day-to-day issues such as insurance proceeds held by a lender pending repair of a residential property.
Insurance carriers are required to "protect" the interests of the lien holder (mortgage company) in accordance with the policy. Simply put, indemnity payments that reach a certain threshold - typically a few thousand dollars - have the names of the insured and the lender on the check. This means that in order to fix the damage to their property, homeowners must get the check endorsed by the lender. Herein lies the rub.
Banks are not held to the same standards as insurance companies. While the responsibilities of the lenders are explicitly documented in the insurance code under Title 5 (protection of consumer interest), Subtitle C (deceptive, unfair, and prohibited practices), Chapter 557 (insured property subject to security interest),Sub-chapter A (insurance proceeds held by lender pending repair of residential real property) - in reality lenders consistently act with impunity!
Just yesterday I read that The Texas Department of Insurance announced enforcement actions taken by Commissioner Mike Geeslin that became final during April. Fines and restitution totaled almost $24 million! So I eagerly looked down the list of enforcements to see which banks were punished for their bad behavior - the answer - none!
If you are a property owner and you need to have your indemnity released by the bank and they do not act in accordance with the regulation - where do you go? The Department of Insurance has no jurisdiction. How about the Attorney General - good luck with that one. Keep looking, you will find nothing.
So while I am a strong believer in free markets, I also believe there needs to be a mechanism in place that when regulations are broken regularly, consumers have a way to take the institutions to task. It clearly exists in the insurance business, how about leveling the playing field - lets start with banks!
The May 2011 issue of Best's Review featured a series of articles around the future of adjusting. If you haven't yet seen or read the articles and have any interest in the field of claims adjusting, I would encourage you to get a copy of the magazine.
In an article entitled "Filling A Void, Property/casualty insurers need to hire and train the next generation of adjusters" written by Mike Mahoney and Mike Bishop, the authors share some fascinating insights and statistics.
According to a study by Deloitte Consulting in March 2006 entitled "How Insurance Companies Can Beat the Talent Crises" 84,000 hires would have been required to meet the 2014 target of 308,000 adjusters. Industry data suggests that not nearly that amount have been hired since the article was written.
Jump ahead to the second part of the title of this post that addresses the notion of improving claims services.
Many insurance carriers use some sort of call center to handle all or some portion of their claims. While many of these call centers are "specialized" the level of talent is often marginal. This means that the first time an insured calls to report a claim, the representative of your company that they are talking to may not be projecting the best image of your company - you know, the one that your company spent so much money on the TV commercial for to emphasize how great the company is in the event of a claim.
In most instances, call center personnel know a limited amount about your company in general, much less the business of insurance, the policy, or coverage related issues. As all they are really there for is to conduct "in-take" - or capture the information that will now be routed to someone else.
Think about this for a moment. The person on the other end of the phone - lets just call them a customer for the time being, has been a policyholder for 15 years, is reporting their first loss - a fairly traumatic event for most, is looking for information and action, and what they are likely going to get at best is an empathetic ear and a promise of a call back.
Now let's combine the two. At Service247 our Claims Concierge is an entry level adjuster. This means a person who has recently obtained their license but does not have any field experience. They have a career path, and their success is dependent upon how they do in their first job. Most are collage graduates entering the work force looking for a career (versus a job). And with the advent of technology, they don't have to sit in a call center 24 hours a day, we route calls so people can be working at home.
Now the experience is very different for the customer. The person they are speaking with is insurance knowledgeable, focussed on a career in insurance, has policy and coverage knowledge, and is empowered to take the next step - i.e. schedule an inspection or dispatch mitigation services. In fact, we don't call this in-take, we call this triage.
So the concept is pretty simple, let's start hiring the next generation of adjsuters in a way that delivers immediate value and benefit to our policyholders, agents, and company today.
The storms that have been rolling through many parts of the country this spring have caused well publicized death and destruction to many. At the same time, they have resurrected the rivalry between insurance company adjusters and roofers.
Yesterday I was at a loss with one of my colleagues as "protection" from an menacing roofer. Last week a different team member inspected the roof only to find the policyholder's contractor on the roof upon his arrival. He had circled numerous shingles with what he claimed were hail hits. In our adjuster's opinion, they were mostly blisters from insufficient ventilation. When he started to discuss this with the roofer, the roofer became belligerent and actually prevented him from completing his inspection. Yesterday I had a different team member evaluate the roof, with the same contractor, and he reached the exact same conclusions.
This morning as I was driving to work I heard a radio advertisement from a roofing company. They stated "with the recent storms, let us 'work' your insurance company". Come on! If that doesn't sound disingenuous, then you must love all the lawyers inciting lawsuits on TV, the radio, and billboards everywhere.
The Texas State Legislature had an opportunity to do something about this during this past session and conveniently passed. How this helps consumers or businesses other than roofers is beyond me - and the truth is that it could have helped legitimate and professional roofers quite a bit.
While our local politicians have decided not to broach the subject, an association called Free Roof Scam is setting out to educate people. They are making available marketing material such as yard signs and door hangers to help educate consumers.
The idea is that people understand what they are getting themselves into. But at the same time, I am skeptical. I believe agents and insurance companies need to pick up the ball and run with it. This information needs to be publicized in every way imaginable including mailings, renewals, Web sites, etc. The Department of Insurance should add prominent links from its Web sites.
While consumers have no problem accepting the incorrect notion that insurance companies have a vested interest in not paying for new roofs; it seems to be a totally foreign concept to them that the contractor - who they have likely never met before - and will likely never see again after the job is complete - has an interest in misleading them in order to get the business.
There are plenty of great, reputable, stable, insured, local roofers. Those are the folks people need to be talking to.
If someone knocks on your door and offers you a deal that sounds too good to be true like "I'll get you a new roof for free", then it is too good to be true.
Plus, why wouldn't you want to support your local economy by providing your neighbors with legitimate opportunities to work on your property. Let's face it, they are much more likely to be around if there are problems down the road.
So insurance carriers, adjusters, agents, and legitimate roofers, join the movement and help get the word out there.
A new iPhone® application from National Association of Insurance Commissioners makes it easy to create a home inventory!
A recent news release from the National Association of Insurance Commissioners (NAIC) highlighted the release of a new way of documenting home inventory for policyholders. The free myHOME Scr.APP.book app lets users quickly photograph and capture images, descriptions, bar codes and serial numbers, and then stores them electronically for safekeeping.
The app organizes information room by room, and even creates a back-up file for e-mail sharing.
Whether you are an agent, claims professional or adjuster you should consider making this information available to as many policyholders as possible. Even after a loss, it is a good idea to prevent the headaches in the event of future losses by not having to go through the contents mess all over again.
It's tough to remember everything that was in your home after a loss leaves your home looking like this :-(
If you are a policyholder, you should consider downloading this application if you have an iPhone®, and if not Google® the term "free home inventory application" and you will find a ton of options. I am only recommending the iPhone® applicaiton from the NAIC because I am confident in the organziation. For the others, like anytime you find something "free" on the Web - be careful!
As a company that provides claims adjusting services as part of what we do, it never ceases to amaze me how people react to learning that they do not have coverage for damage they believe should be paid for by their insurance carrier.
People's perception and attitudes towards insurance is really unjustified and mostly avoidable if they would only pay a little closer attention.
A recent study by GfK Custom Research North America indicates that insurance companies compared poorly to other industries when it comes to trust. Interestingly insurers fared better with "influential Americans" than they did for "average" Americans.
This doesn't surprise me in the least, and hence the subject of this post.
Mistrust most often is the result of people's belief that they were "ripped off" or otherwise didn't get what they paid for. In the case of insurance they might not have been paid as much as they believe they were "owed" or may not have been paid at all - a claim denial.
The question is what did they pay for?
Like anything else in life, you get what you pay for with an insurance policy. The biggest difference is that you can't actually see what you are buying at the time of purchase unless you look very closely. So unlike the home or the vehicle that you just purchased, the product isn't as obvious. That is unless you read the contract (the policy).
The product in this case is a promise. And the terms of that promise are spelled out in the policy. "We will pay for this". "We will not pay for that". "Your responsibilities after a loss". Etc.
If you review your policy and find an exclusion that you do not like, or ask your agent if "such and such" is covered you will find that there is typically an endorsement that you can add to your policy. But it cost's money! So many people elect not to spend extra - roll the dice if you will, and then in the event that the "such and such" happens, they are angry with their insurance adjuster, or their insurance carrier when they aren't paid.
The psychology is interesting. I actually believe that in many of these instances they don't initially report a loss because they actually know it will not be paid. Then over time they think about it, and convince themselves that they should be paid and try and figure out a way to perhaps bend the facts slightly in a convoluted way to somehow suggest that their insurer owes them for the loss.
By the time they call their agent or carrier to report the loss they have worked themsleves up to a frenzy and have convinced themselves that they are owed.
When the insurance adjuster delivers the bad news, they are shocked and dismayed, and now fully convinced that all insurance companies are evil and should not be trusted.
While I would never encourage an adjuster to do this, when I first started in this business, an experienced insurance professional suggested with a bit of sarcasm that when an insured is arguing what the policy should pay - just ask them if they have read the policy. Or, ask them to show you where in the policy they believe it states that they are owed for the loss.
Obviously this would only inflame the situation, but the point is that insurers pay what they owe - period. The question is what do they owe. The answer - its in the policy - you get what you pay for.
Another oldie but goodie, this post originally appeared in April 2010.
Property & casualty insurance may well be the most misunderstood segment of the insurance industry and the financial services industry.
Insurance is perceived as a commodity until a policyholder has a claim.
The policyholder's interaction with an insurance adjuster is often the first and only time they have interacted face-to-face with anyone other than their agent.
It is only then that most policyholders take a deeper interest in their insurance policy, want to speak with a representative, and want to understand all of the details of the policy. But often at that point it is too late.
Mr. Don Adams, President & CEO of Bear River Mutual Insurance Company concluded an executive panel he moderated today at the NAMIC 2010 Personal Lines Seminar by stating, “We are a noble industry. When accidents happen, the government talks about it, the neighbors gossip about it, we do something about it.”
I agree. We restore people’s property and their lives to their pre-loss condition. And for the most part, the industry as a whole does it really, really, well.
The property &casualty insurance industry had nothing to do with the financial meltdown. P&C carriers did not require any government funds to bail them out. It is important to realize that when we hear about AIG’s role in the financial crisis, they are referring to the financial services division and not their insurance division.
So go out and find a P&C insurance professional and give them a hug today!
Time is our most precious asset. Don't give it away willy nilly. Just say no to multi-hour service windows.
From a post I originally published on May 4th, 2010 (yes, it's the summer, so I am entitled to a couple of reruns!).
Imagine booking a flight and the airline telling you the flight was scheduled to take-off between Noon and 5:00 pm. Or scheduling a doctor’s appointment and being told to come on in at 8:45 am and the doctor will see you sometime between 9:00 am and Noon. I’m guessing that you wouldn’t be too thrilled.
Yet somehow some insurance adjusters believe that it is okay to do just that when servicing an insurance claim.
The same thing often happens when we schedule a plumber, a painter, a flooring provider or a range of other contracting related services for our home. It seems the "norm" is to provide service windows.
This makes no sense.
In an age of always on communications including cell phones, texting, global positioning systems (GPS) there are no reasons for there ever to be more than a 1 hour service window, and in most instances, there shouldn’t be any service window.
I was meeting with a now “former” service provider on Friday who admonished me for scheduling his teams at 9:00 am. He stated that we don’t know the first thing about the business, that contractors can’t be punctual and that we had to provide them with multi-hour service windows. Well, needless to say, we are no longer working together!
There is no doubt that things can happen during the course of a day. Someone can get tied up on a job, they can hit traffic, there can be an emergency, but any of these things can be managed through pro-active communication. Why should your time as a customer be any less valuable than the time of the service provider? It shouldn’t! Just say no to service windows.