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Aug

An Insatiable Curiosity, Winning Attitude and other Key Characteristics of Great Adjusters

Today is going to be a fun kind of blog. As I think back upon my 33 years in the world of claims I get to now welcome my youngest son to this world as well. He will be starting a job as an adjuster with one of the nation’s leading insurers this coming Monday.

Being a lot like me it is fair to say that he didn’t grow up wanting to be a claims adjuster. He was going to be a wide receiver in the NFL until he realized he lacked both the size and speed. His fallback was professional lacrosse, until he realized there is no money to be made there.

After his recent college graduation, he asked me about being an adjuster. I think he knew as much about adjusting as I did when I stepped into the role in 1989. As parents we often find ways to make things easily understandable to our kids. In this case I asked him if he recalled the trip his mom and I took to Italy. You know, the one where we landed in Rome and within 2 hours were notified that mom’s car was totaled? The nice person that we dealt with during the next two weeks was the adjuster. He was the person who made everything right with the claim. He provided great customer service and a prompt resolution for all involved.

There are very few jobs that prepare people for life in today’s hectic business world. Adjusters learn to multi-task while providing great service. They learn people skills, how to interact, how to investigate, how to negotiate, and every other aspect of life in both a claims and a corporate structure.

As I discussed in my book Re-Adjusted: Taking Your Claims Organization From Ordinary to Extraordinary, there are several characteristics of great adjusters. Let’s take a look at a few of them today.

Having an Insatiable Curiosity

It is said that curiosity kills the cat. Does curiosity kill the cat or does the curious cat get the prey? Anyone who has adjusted claims knows the answer to that question. In a real life version of “Who Struck John”, claims adjusters are tasked with not only finding out what happened but using their responsibility as a fiduciary to properly resolve claims in order to protect those paying premiums.

Patience

Adjusters are barraged with claims and emails from clients, body shops wanting payments, lawyers wanting to settle and, of course, demands from the powers that be to do things better, faster and cheaper. It is constantly a juggling act, but one where patience truly is a virtue. The one phrase never uttered by an adjuster is, “I’m all caught up.”

Positivity

There is nothing worse for an organization than whiners. People who come into work in a bad mood, are constantly disgruntled, complaining, and doing everything in their power to bring down those around them do not create a positive atmosphere. Let’s face it, we all have bad days. We all have problems. Challenges are part of life and how we rise up to face those challenges defines who we are.

The most successful adjusters that I have encountered share a similar paradigm of life where the glass is always half full, never half empty and every new claim is a chance to do something positive for themselves and those who they serve. As Winston Churchill said, “Attitude is a little thing that makes a big difference.”

Attention to Detail

Have you ever opened a claim and just shake your head wondering what the heck is going on? FNOL says the insured hit the claimant. Party statements were rushed or missing. Nobody contacted the witnesses, the estimate photos are terrible, and the notes allude to a police report that is nowhere to be found.

As one who has managed and audited claim files, I can attest that attention to detail matters. As I used to tell my adjusters, files that are organized and well thought out will always get a higher score than disorganized files, even if the outcomes are both proper. Always try to tell the story of what happened, beginning at first notice of loss. Adjusters who look at files this way tend to see greater overall success.

Listening Skills

Much of that attention to detail comes from having the ability to actively listen. This is one of the single most important things that differentiates great adjusters from the pack. Active listening allows them to absorb facts while creating deep, probing questions. Here is a great example from a recent file of what not to do.

Adjuster: How fast were you going?

Insured: Forty five, that was the speed limit.

Adjuster: What was the speed limit?

Insured: I just told you, forty five.

Adjuster: In your own words, what happened in the accident?

Insured: I was reaching over to get something on the seat and took my eyes off the road for just a second. Next thing you know someone hit me.

Adjuster: What was the weather like?

This is just a part of the statement, but you get the gist. The adjuster was not actively listening. They were following a template. If the adjuster had listened, they would have learned that the insured had reached over to the passenger side to get something off the floor that resulted in taking their eyes of the road for several seconds. The item that was dropped on the floor was a cell phone with a partially typed text. None of this was captured in the statement. Listening is crucial to getting the best possible outcomes.

Great adjusters are great listeners, which leads us to the next crucial skill.

Digging for Dirt

Let’s face it, not every claim is on the up and up. It is estimated that 10% of all claims are outright fraud and more than a third of injury claims contain elements of fraud such as deceptive billing practices, upcoding, unbundling or modifier abuse.

In this day and age of social media where everyone seemingly has aspirations of being the next Tik Tok sensation, there is no shortage of ways to gather information. Great adjusters dig deep because they have an insatiable curiosity to find out exactly what happened so they can ascertain what is owed.

From public records to social media to witnesses, colleagues, ex-spouses and neighbors, there are a myriad of options for conducting in depth, detailed investigations in order to validate what is related to the claim.

Passion

Great adjusters are passionate about what they do. This is the same in every facet of life. Passion is what drives success. It is what results in innovation. Think of where we would be if Henry Ford wasn’t passionate about cars or Bill Gates wasn’t passionate about computers.

To truly take that next step in our lives, we need to understand that it is our passion that will define our future. I have always had a passion for claims, in particular aspects related to fraud. This passion led me to write my fictional claim thrillers Swoop & Squat and Deep State, as well as the screenplay for The Adjuster, which is loosely based on both books.

Passion is what takes people from ordinary to extraordinary. Great adjusters find aspects of claims that they are passionate about. But also recognize that sometimes your passion is something other than what you are doing. As I often told my new hires, claims isn’t for everyone. It is certainly a great career that teaches great skills. For some it is a steppingstone for a life in claims, for others it is a steppingstone to help them find what they are passionate about. There is no right or wrong answer, just find what you love to do and go do it.

Striving for perfection

We have often heard the phrase “nobody is perfect.” While this is sage advice, perfection is a noble goal and one that everyone should strive for. Even if we live in an imperfect world, perfection does surface every so often.

Think of the 1972 Miami Dolphins who went 17-0 on their way to a Super Bowl win. But were they perfect? They gave up points unlike the 1933 Providence Huskies who went undefeated and never gave up a point. But even they gave up first downs.

As Vince Lombardi once said, “Perfection is not attainable, but if you chase perfection, you attain excellence.”

The highest performing adjusters are those who strive for perfection. They understand the company metrics and how to exceed them. They believe in their mission to take care of those for whom they are fiduciaries. Just like sports statistics, they will hone in on the KPI’s and do what it takes to be on the top of the statistical stack.

But they also recognize that claims are just part of the chase to perfection. They have conquered the work/life balance. They continue to hone their adjusting skills. They recognize that there is always opportunity to do better and they learn from mistakes.

Blocking and Tackling

From Pop Warner to the NFL, the key to success on the gridiron lies in the basic and fundamentally sound principles of blocking and tackling. Game day results happen in direct correlation to how effectively players execute what is practiced and preached daily. Teams are measured against a myriad of statistics but at the end of the day there is only one number that matters: the final score.

In claims organizations, adjusters are measured on a number of metrics, as well. The playbook is often the claims procedure manual, and certainly case law and governing statutes. They are measured on things like timeliness and customer service. But just like the final score in football, the one metric that really matters is that the claim had an accurate outcome.

Like football, claims are an art of execution. They are the combination of people, processes and technology. Great adjusters are arguably the most critical aspect of this trifecta and those who see great success are the ones who are laser focused on blocking and tackling.

Chris Tidball is the Global Head of Sales & Marketing for SecondLook, a leading subrogation firm. He has spent more than thirty years in claims working for multiple leading insurers as an adjuster, manager, executive and consultant. He is the author of Re-Adjusted: Taking Your Claims Organization From Ordinary to Extraordinary, as well as a number of other fiction and non-fiction works. He can be contacted at ctidball@2ndlook.net.

Jul

SecondLook and First OnSite Helping Clients Save Millions

Your business is in the path of a major weather event and following the storm you notice that you have incurred property damage. Is there a chance for you to recover funds associated with the property damage by means of subrogation? Yes, absolutely! For example, the building materials utilized such as a roof system and or how the roof was installed or constructed may have been faulty thus causing plausible means to recover funds via subrogation.

Our national restoration partner, First Onsite; has the capability to respond and mobilize assets to handle every component of the mitigation, restoration and reconstruction process no matter the task at hand. In partnering with First Onsite, SecondLook has added to its bench of industry experts to aid in the preservation of evidence as well as capabilities to obtain detailed documentation which contributes to streamlining the subrogation process. Through the partnership between SecondLook and First Onsite, we empower clients to act confidently during a property loss no matter how large or small it may be and ensure that we are going to work in their best interest throughout the entire subrogation and restoration process.

With over $1 billion dollars recovered for clients, SecondLook, Hauppauge NY, is lauded as a collaborative business partner. We drive results while freeing up your claims staff to focus on more complex issues. Areas of practice include Auto, Property, Worker’s Compensation (liens and credits), UM/UIM, Disability, Excess/Surplus, Healthcare, Reverse Subrogation and Subrogation Purchasing. The reason for our success is that our team is comprised of proven claims experts with years of expertise in adjusting, management, and executive leadership for some of the largest and most successful carriers in the industry. We understand your challenges because we have sat where you sit. Our unique solutions are specifically designed to make our clients more effective than ever.

For more information about SecondLook Inc. please visit our website at www.secondlook.net

Jul

What is that BI claim really worth?

If you watch daytime television, you might be thinking that everyone is getting six and seven figures for their personal injury claim. Just ask the trial lawyer advertising on Judge Judy or the back of the local bus. The reality is most claims are worth far less than that. Despite average BI’s continuing to rise and nuclear verdicts appearing outside of the traditional “judicial hellholes”, it is still possible to pay only what is owed for personal injury claims.

But we live in challenging times. Carriers continue to push adjusters to do more with less. Disposition demands often take precedent over a good, solid investigations. At the end of the day something has to give, and sometimes that is the quality of the claim file.

Adjusters are often overwhelmed. We see it time and time again; stacks of papers piling up on claims adjusters’ desks in the form of bodily injury (BI) demands from attorneys for injuries supposedly sustained as the result of an auto accident, slip and fall or other type of injury. Of course, the attorney’s client is never at fault, and most certainly the alleged injuries are always the result of your insured’s negligence. Does this sound familiar?

Like a game of cat and mouse, some attorneys will try to take advantage of busy adjusters to maximize settlements for their clients, at times garnering far more than the claim may actually be worth. It should be said, however, that the tables can be turned, as attorneys are equally as busy, often necessitating the use of associates, or negotiators, to push through an even greater volume of work. Fortunately, this latter bit of information can be of invaluable assistance when evaluating and negotiating injury claims.

The truth of the matter is that attorneys get paid based upon how much they collect. Their contingency fee is often one third of the settlement value, and perhaps 40 percent if a lawsuit is filed. The same cannot be said of adjusters, whose obligation is to conduct a thorough investigation in order to arrive at a fair value based upon the facts and evidence presented. Herein lies the challenge for organizations trying to intersect accuracy with perfection.

Core Claims Skills
As is so often the case, success stems from the fundamental execution of basic blocking and tackling claims skills. While there are many important aspects to a claim investigation, the two most critical are liability and damages, as the claim would not exist without both.

Liability – Let’s take a look at an auto accident. Which driver was at-fault for the accident? There are only three possible outcomes:

The insured was at fault.
The claimant was at fault.
There was there was shared fault among two or more parties.

Far too often claims adjusters select either option “A” or “B.” Meanwhile juries, more often than not, choose “C” and apportion liability accordingly.

Damages – What were the economic and non-economic losses from the accident? Again, there are three possible outcomes:

There are damages and they are related to the accident.
There are no damages.
There are damages, but some or all of them are unrelated to the accident.

Like liability, the path of least resistance often yields the wrong answer, as claimed injuries are not always related to the accident. The challenge to insurers is ensuring that both liability and damages are investigated concurrently. Commonly one or both are either overlooked or incomplete, thereby adversely impacting outcomes.

Consider that, on average, comparative negligence by insurers nationwide is assessed on somewhere between 3 and 5 percent of all claims. Let’s also consider the fact that research on jury verdicts indicates that around 55 percent of all claims adjudicated involve scenarios other than clear liability. These may include intersection accidents, sideswipes, slip-and-fall accidents, and liquor liability. In other words, a myriad of opportunities exist to improve basic blocking and tackling skills in the comparative negligence arena.

Accurate Investigations

In addition to liability, there are immense opportunities for improving the accuracy and efficiency of claims investigations, evaluations, and negotiation strategies. At the outset of any claim, all involved parties should be contacted, including those who are claiming injury. If they are represented, then a request for a statement should be made through legal counsel, even though the request may not be granted. It is an important aspect of claims handling to document when and why this request was made. The attorney needs to understand early on that you have an obligation to thoroughly investigate injury causation as well as the frequency and duration of treatment.

There should be due diligence regarding the mechanism for injury, as well as a thorough investigation of potential pre-existing conditions or intervening causes. Index information, hospital checks, social media and public records searches provide a wealth of information, as do friends, neighbors, witnesses, and particularly ex-spouses. Taking the time to seek out those who may be able to shed light on the existence of pre-existing conditions or intervening causes can prove invaluable in settlement negotiations, arbitration, or litigation. Most importantly, this doesn’t need to be burdensome on adjusters who should rely on networks of key business partners to do the heavy lifting.

For carriers concerned about the expense of such detailed investigations, consider how much subrogation is being overlooked by simply missing comp neg situations. Those dollars alone could pay for solutions that can dramatically improve BI indemnities.

To put this in perspective, during my tenure overseeing aspects of claims operations for a large global carrier we faced challenges as it related to comparative negligence assessment. Adjusters were just too busy. Disposition demands were simply too great. Something had to give, and it was often the underlying investigation. We brought in SecondLook to review closed files and their ID and recovery of missed subrogation alone provided enough lift to justify the costs of a liability and injury tool that made a quantifiable difference in the future of claims handling.

Quantifying Bodily Injury

Another key component of the BI demand are the medical specials, which may be inflated, and at times, unrelated, to the claim. Just because the attorney says it is so, doesn’t make it so. In many instances, there are varying degrees of subjectivity in findings. There are also numerous opportunities for billing errors, or even worse, intentional billing fraud. Some claims adjusters today may not realize there is a high probability that medical bills contained in a BI demand are upcoded or unbundled. It is also possible there are issues pertaining to causation, duration, and frequency of treatment.

While adjusters generally aren’t medical professionals, they do have the requisite training to identify questionable billing practices or treatment patterns. Thus, it is the job of the adjuster to identify these issues and raise questions, often documented with the assistance of third-party medical billing review software to identify potential fraud, billing errors or improper edits.

By further leveraging medical experts or those fluent in billing and coding, a tremendous amount of medical inflation could be avoided. By coupling this knowledge with proper liability assessment, the benefit to insurers and the policyholder, for which they are a fiduciary, is significant. Furthermore, by paying the right amount, insurers immediately gain a tremendous competitive advantage in an increasingly challenging marketplace.

When the BI demand is received, the adjuster should review all contents to ensure that they include the necessary documentation to complete the injury evaluation. There should also be a notation of any time limit demand requirements with the appropriate action taken to ensure a timely response. Generally, this requirement is met by either tendering an offer (when warranted) or notifying the attorney, in writing, of additional documentation necessary to complete the injury evaluation.

10 Pieces of Critical Information

When reviewing the bodily injury demand, it is important to look at a variety of critical information:

The police report. Was there any mention of any injury at the scene? Was the injured party transported to a medical facility? Was there any mention of contributing factors against the claimant? Were any witnesses identified?
Vehicle photographs (auto claims).Does the damage match? Are there paint transfers? What is the directional force of impact? Is the damage such that the injury being claimed may be related?
The accident scene. Are there any other potential tortfeasors? Overgrown bushes, signal outages, missing or blocked signage, absentee third parties, and similar factors should always be investigated. If you are dealing with a slip and fall or other commercial type of situation, is their video surveillance?
Emergency room records. What was said to the EMT’s at the scene and during transport? What does the ER admission statement say? What type of pain was related to the treating physician? Was there a mention of symptoms other than what may be related to the accident? Is there any indication of drug or alcohol usage that may have contributed to the loss?
Medical treatment patterns. How soon did treatment begin? Were there gaps in treatment? Was treatment provided on evenings and/or weekends? Were you able to verify treating physician office hours?
Provider type. Was the claimant seen by a chiropractor or medical doctor? If the latter, then what was his or her specialty, such as neurology, orthopedics, and so on? What are the medical professional’s credentials? Is his or her licensure current? Are there any prior or pending disciplinary actions with the current state, or in prior states?
The duration and frequency. When did treatment start? How long did it last? Was it active or passive? Was it longer than an anticipated expected recovery date among the general population for a similar complaint?
Were there objective findings, such as those from an x-ray, MRI, or CT scan? Were the records and films obtained and reviewed by an independent medical expert? Request the films and have them reviewed. If the attorney refuses, this is always discoverable. Utilize a company such as Authentic4D to get an impartial review by fellowship-trained and subspecialized radiologists. In a recent case in the Rio Grande Valley, universally considered to be a “judicial hellhole”, this company was utilized and the results were presented to the jury which resulted in an award of ZERO against a seven figure demand.
Pain management. Did the doctor prescribe medication to ease the complaints of pain? If so, then what type (analgesics, prescriptions, injections)?
SOAP notes. Does the treatment being provided and billed match the medical providers SOAP (subjective, objective, assessment, plan) notes which can be a great indicator of not only what treatment really occurred, but also a red flag for CPT coding and modifier abuse.

While just touching on some of the key components of the proper investigation, it becomes easier to visualize just how complex the role of the casualty adjuster can be. However, the BI evaluation is just part of the equation, as there must be an effective negotiation strategy to bring the claim to closure.

The job of the adjuster is to properly investigate a claim and pay what is owed. Part of this process is to recognize impediments to the case being presented. For example, if the claimant is saying his or her lower back hurts but they were sideswiped, where is the mechanism for injury? Similarly, be sure to look for red flags, such as a claimant stating he or she was “rear-ended yet thrown forward,” thereby defying the laws of physics.

It is this attention to detail that allows for a case to be built to most accurately support and settle the pending claim. By further leveraging tools to identify potential fraud or billing errors, the adjuster not only increases productivity but also gathers the proof necessary to support contentions gathered during the investigative phase.

Consider the situation where an adjuster is reviewing a lumbar MRI that was billed under CPT codes 72148 and 72149 for $4,000. Without the proper tools to assist in medical bill repricing, they likely wouldn’t realize that this is an unbundling scheme that should have been billed as CPT code 72158 for $2,300.

A further review of the medical records may show CPT codes billed as multiple regions, yet the SOAP notes indicate only one region. This is a red flag for upcoding. Or perhaps a modifier of “93” was used, which denotes interpreter services. Who is the interpreter, and why were they needed? This is another basic question that should be asked but is too often overlooked during the course of the BI evaluation.

According to the office of the inspector general (OIG), modifiers 25 and 59 are used improperly more than 40 percent of the time, resulting in significant medical inflation. Modifier 59 is used to distinguish procedures that are not normally reported together, while modifier 25 identifies significant, separately identifiable evaluation and management services conducted on the same day.

In some instances, the modifiers are used as a provider solution to get bills paid. However, it is important to recognize that improper usage can be considered abusive and can amount to fraudulent billing at times. Again, knowledge of coding is critical to identify bundling and unbundling scenarios.

When performed properly, BI claims investigations, evaluations, and settlements require a significant amount of time, knowledge, and expertise. They require painstaking attention to detail and a fundamental understanding of biomechanics, medicine and medical bill coding. The most effective BI reviews incorporate a variety of processes to leverage the expertise of others with a higher degree of proficiency in these same areas. This in turn bolsters the adjuster’s case while dramatically improving outcome accuracy. The result is an optimized process that increases productivity while reducing severities, a benefit for carrier and consumer alike.

In the end there is a quantifiable correlation to best-in-class service, quality, and optimal outcomes that separate the extraordinary from the ordinary.

Chris Tidball is an Executive Claims Consultant with SecondLook, an industry leader of insurance consulting and recovery services. He began his career as an adjuster and has worked for multiple top 10 carriers in management and leadership roles. He is the author of Re-Adjusted: Taking Your Claims Organization From Ordinary To Extraordinary. He is the creator of The Adjuster screenplay which is adapted from his fictional thriller Deep State. To learn more visit www.secondlook.net or contact him at ctidball@2ndlook.net.

Jun

Fun Facts About the 4th of July

The 4^th of July is America’s most patriotic holiday. It is a great time to celebrate the founding and history of our nation with family, friends and fireworks. Who doesn’t like an all-American cookout with hot dogs and hamburgers. Aside from being Independence Day, there are many fun facts that can be shared with others.

John Adams penned a letter to wife Abigail predicting that this day should be filled with “games, sports, parades, bonfires, fireworks, and laugher”. Clearly, he had some vision for the future.
In 1777 the first July 4^th fireworks show took place in Philadelphia.
In 1779 July 4^th was celebrated on the 5^th because the holiday fell on a Sunday.
Three U.S. president’s have died on the 4^th; James Monroe, John Adams, and Thomas Jefferson
The 50^th star to our flag (Hawai’i) was added on July 4, 1960
150 million hot dogs will be consumed this coming Monday
Speaking of hot dogs, Nathan’s Famous July 4^th competition began on the day in 1916
2 – The number of signers of the Declaration of Independence on July 4, 1776 (John Hancock and Charles Thompson). The rest of the delegates signed over the following weeks.
$1 Billion is the amount that Americans will spend on fireworks for this year’s celebration.
Speaking of fireworks, an estimated 15,600 people are admitted to hospitals annually due to injuries related to pyrotechnics. In 2020, there were also eighteen fatalities.
An estimated 68.3 million cases of beer will be consumed this weekend.
One World Trade Center was designed to be 1,776 feet tall.
There were only 2.5 million people living in the United States in 1776, roughly the population of Houston today.
On July 4, 1778, George Washington celebrated the holiday while at war, giving his troops a double ration of rum and a cannon salute.
There are 31 towns in the U.S. that contain the word Liberty, the largest being Liberty, Mississippi.

From the team at SecondLook, we would like to wish everyone a fun filled and safe weekend!

Jun

Attracting the next generation of outstanding adjusters

Years ago, I had a professor who cautioned our business class to never work for banks or insurance companies. His rationale was that these industries notoriously churned and burned through employees with only a small percentage making their way into the higher ranks.

So what did I do? Upon graduation, I took a job with a relatively unheard of company who eventually became a top 5 insurer. The job was challenging but also very rewarding. Insurance adjusters serve a critical function in the claims process yet the staffing gap in this profession continues to grow.

On the retirement front Pew Research indicates that nearly 10,000 baby boomers retire each day in the United States and 25% of them are in the insurance and financial sectors. Well versed, technically sound adjusters retire with a wealth of experience leaving in their wake a shrinking pool of new adjusters tasked with handling a rising volume of claims.

In 2015, The Hartford Millennial Leadership Survey found that only 4% of millennials are interested in entering insurance compared to 36% interested in education and 31% interested in healthcare.

Let’s face it, insurance is not a sexy industry. I don’t know of a single fellow adjuster who grew up saying I want to handle claims for a living. Honestly, when I got into claims 33 years ago, I didn’t even know what I was getting into, but I did get a company car which was an attractive perk. That is part of the key to attracting talent; what are the perks that get the attention of the younger generations, in particular Gen Z.

The challenge facing the industry now is twofold. First, there is a growing knowledge gap. Long gone are the days when adjusters hit the streets and learned from their version of Mr. Miyagi how to “wax on, wax off” claims. There is also a retention gap whereby employees have created “The Great Resignation”. According to Gallup only half of millennials plan to be in the same job next year, with results for Gen Z being even bleaker.

The younger generations are markedly different than baby boomers and Gen X’ers, where work ethic was instilled at a very early age and we were challenged to face confrontation head only with conflict resolution skills honed over time. These skills proved helpful in adjusting careers which are often viewed as adversarial.

Complicating matters has been the dumbing down of the profession from boots on the street investigators to what have essentially become data processors in many organizations. In my book, Re-Adjusted: Taking Your Claims Organization From Ordinary to Extraordinary, there is extensive discussion on the need for adjusters to have an insatiable curiosity. Thinking back to my earliest days in the streets of Los Angeles rooting out fraud it was curiosity that led to good results. What we need to do as an industry is get the younger generations curious about a career in claims.

Bringing talent into claims organizations is critical for the ongoing health of the industry. Certainly there is advancing technology that will help ease the staffing burden but we are probably a generation away from being able to effectively have a fully automated end to end adjusting solution, in particular on bloodline claims. Can you imagine a bot trying to negotiate a settlement with the billboard attorney, who isn’t likely to utilize AI in the near future?

Younger generations have different wants and needs that older generations need to understand and adapt to. Long gone are the days of commuting an hour into the office, spending sixty hours a week reviewing evidence, searching for clues and aggressively negotiating for advantageous outcomes. It was fun for us, but it isn’t the jam for Gen Z.

Careers in claims need to be entrepreneurial and rewarding. According to FirstUp, younger generations care more about work-life balance and personal well-being. They are seeking benefits such as PTO, mental health days and activities that create a sense of community.

This creates an interesting dynamic. Ask a boomer what it’s like to work with a millennial or Gen Z and you will often get an eyeroll. There is frustration of a perceived entitlement mentality, short attention span and need for immediate gratification (a/k/a – everyone gets a trophy). Thinking back, this is probably similar to what the Greatest Generation thought of us when we entered the workforce in the 80’s and 90’s.

As claims professionals retire, the need for Gen Z’s increases. We need to be asking what they want in a job. According to Forbes one of their biggest concerns is their career. 68% of younger workers worry about their career growth potential and 79% have high drive and ambition. Perhaps the frequency of turnover has less to do with short attention spans and more to do with having a highly successful, long term career with a company that might take a few moves to find. Remember, many of the Gen Z’ers came of age during the Great Recession, which took a toll on many families. Children are very observant. They take notice of things, in particular financial struggles. Perhaps this helps to explain their need for security.

Contrary to what some are saying, the younger generations want to get back to work. 47% of younger workers said that working from home has had a negative impact on their well-being, a full 13% more than older workers. Being in the office in a position like claims is critical because you learn so much from those around who have acquired knowledge over the course of their career.

Gen Z is super tech savvy! They love and live the digital life. It is something that should be embraced as technology is deployed to help adjusters. While we learned claims in real life settings such as training rooms or from co-workers, Gen Z will see the best results while engaging with a highly informed avatar. According to the LinkedIn talent blog 91% say the technology offered by an employer would influence their job choice.

From a social network presence, the younger generations will be checking you out. Among Gen Z, Snapchat is the “go to”, followed by Instagram. If your company doesn’t have those accounts set up then now is the time to do it.

Work needs to be fun, and things like ping pong and air hockey were all the rage for a while. But what the younger generations really want is financial stability and responsibility. They aren’t looking for perks like ping pong and air hockey, but rather are focused on 401k’s, student loan repayment assistance, and other initiatives to help them save for the future. It is estimated that 35% of Gen Z’ers plan to start saving for retirement in their 20’s, so helping them plan for the future can create a competitive advantage.

While Boomers may joke about everyone “getting a trophy, the reality is that Gen Z’ers are very competitive. They are also team oriented. They want healthy competition in the workplace. While they desire promotions and raises, one common denominator is that they want verbalization of a job well done.

Having coached Gen Z’ers in football and lacrosse over the years, these points seem very real. They were competitive players with a drive to win and understood that there is no “I” in team. But they also wanted to earn kudos through hard work on the field, often competing for a variety of post-game accolades.

Attracting this younger pool of talent is critical to the long-term health of claims organizations across the country. For a generation that frequently cites helping others as a reason for taking a job, claims may be one of the best options. After all we are in the business of restoring dreams. But we are also in the business of being on the side of right versus wrong, another oft cited reason for seeking jobs. With fraud being an estimated 10% of all claims, having the ability to make a difference could prove equally as enticing.

What we are learning about the younger generations is that they are, in many ways, very much like us but with a unique set of instructions and different buttons to push. But at the end of the day, they are looking for what many of us seek in a career; stability, fun, growth and satisfaction.

If you are interested in being a guest on my podcast to discuss this topic, and steps you have taken to attract and retain talent please let me know. It is something that business leaders often cite as one of their biggest challenges and my hope is that we can provide meaningful solutions to make a difference.

Chris Tidball is an Executive Claims Consultant with SecondLook, a leading provider of subrogation and consultative services. He spent more than twenty years as an adjuster, manager and executive with multiple Top 10 carriers. Chris is the author of Re-Adjusted: Taking Your Claims Organization from Ordinary to Extraordinary! He is the creator of The Adjuster television series and can be reached at ctidball@2ndlook.net.

Jun

Florida’s Property Fix – Will It Have an Impact?

Property insurance in Florida has always been challenging, but never more so than in recent years. Since the last hurricane hit Florida in 2018 seven property insurers have gone out of business. A few others are on shaky ground. Many major carriers do not write any business in Florida and those who do often shy away from the most populated areas of the state.

Florida has always been a difficult insurance environment, prone to frequent hurricanes and an epicenter of fraud and litigation. When 79% of all property related lawsuits nationwide are filed in just one single state, Florida, that is definitely the sign of a problem.

The Sunshine State is a unique beast when it comes to insurance, with some of the highest property insurance rates in the nation. Auto, as well, but that is a topic for another day, yet many of the causes of the high rates are the same.

There are several drivers of the high rates that we will cover today: Fraud, litigation, weather, inflation, and insurers.

It is estimated that 10% of all claims are outright fraud. Another 20-30% are legitimate claims that contain elements of fraud. These are costs that consumers are forced to pay through higher premiums. It is probably fair to say that more people than not have had a contractor knock on their door offering them a new roof for nothing more than an assignment of benefits.

Herein lie’s the gray area of fraud and trial lawyers. Not every claim involving an AOB is fraud. Arguably most are not and the AOB process, when properly followed, can be beneficial to the insured. Same with trial lawyers. Most are representing people who have legitimate claims that were potentially wrongfully denied by insurers. But given the fact that the overwhelming majority of litigation in the nation is driven by one state, this is most certainly not always the case.

Getting to an equitable solution that roots out fraud while preserving policyholder rights is going to be difficult. What this legislation does is put some guardrails on the process. It also reigns in multipliers on attorney fees, which in some instances, have been very high. These are all costs that policy holders ultimately pay in the form of higher premiums.

Will the latest round of changes work? That remains to be seen. There have been attempts at reform before. In 2019 lawmakers passed AOB legislation which, in part, established requirements for the process. In 2021 lawyers passed additional legislation limiting attorney fees in hopes of deterring frivolous lawsuits.

According to Insurance Journal, while overall litigation decreased, AOB litigation rose. Ten insurers reported that more than 30% of their newly litigated cases involve AOB.

Weather is another wildcard. Give us another summer like we had in 2004 with four hurricanes in six weeks and there will be problems. With the price of construction materials at record or near record levels and the supply chain in complete disarray there is no telling what would happen or how many insurers would survive, even with the new reinsurance component to the reform.

The good news is that lumber futures are down 52% since March. There are other indications that certain aspects of record inflation may be starting to subside. That said, costs are high and if the pricing of policies was not accurate some carriers will be upside down.

The stated intent in Florida’s bipartisan legislation was to stabilize the industry which is critical to its long-term survival. If Florida can get through hurricane season with limited issues, if construction prices begin to recede towards pre-pandemic levels, and if the supply chain can get back on track, this will benefit consumers. While there is no guarantee that premiums will decrease, these could factor into price stabilization.

A big part of stabilizing the industry is understanding how it got to where it is. How did so many insurers fail. Certainly, fraud played a role, as did excessive litigation. Weather always plays a role. Hopefully, inflation and supply chain issues are receding and will begin to improve within coming months.

But there have been issues with insurers in the state, as well. According to Insurance News Net, Jacksonville based Sunshine State Insurance Company failed to show how their CEO received a $200,000 dollar bonus just months before liquidation. Sunshine State’s parent company also took millions of dollars through various agreements prior to liquidation that were neither disclosed nor approved by the Office of Financial Regulation.

There needs to be a deeper understanding of why companies, in particular Florida based, property focused, have failed. As companies fail, policyholders pay when the Florida Insurance Guaranty Association pays off claims and a fee hits every policy sold in Florida, from homeowners to flood to malpractice.

It remains to be seen how this new legislation will impact the market and consumers. Hopefully, it will achieve its stated goal of market stabilization. If that occurs the same should happen for policyholders, many of whom have become accustomed to cancellations or double digit increases in premiums.

Some of this is controllable and some is not. If common sense, long overdue, economic policies are implemented to address inflation and supply chain issues that will have a meaningful impact on the costs of goods which would positively impact rates. More challenging is the reigning in of fraud and litigation in the most fraud prone and litigious state in the nation. Given Florida’s history of addressing both of these issues I wouldn’t hold my breath on seeing anything meaningful. As for hurricane’s, they are beyond our control but with this being a La Nina year and the Loop Current pushing warm water further north in the Gulf earlier than usual, it could very well be an active year with the first named storm potentially hitting the southern part of the state as early as this weekend.

It’s hard to say what will happen in the long run, but the legislature did a decent job of addressing some critical issues that needed to be addressed. Did they hit it out of the park? No, but that wasn’t expected. But action was taken and hopefully it turns out to be meaningful.

Chris Tidball is an Executive Claims Consultant with SecondLook, a leading provider of subrogation and consultative services. He spent more than twenty years as an adjuster, manager, and executive with multiple Top 10 carriers. Chris is the author of Re-Adjusted: Taking Your Claims Organization from Ordinary to Extraordinary! He is the creator of The Adjuster television series and can be reached at ctidball@2ndlook.net.

May

Case Study: Four Key Areas to Improve Claims Outcomes

I once had a boss who would occasionally float the question of why we weren’t overly good at claims. As much as other areas of the company may parrot this message as money flows out and pointing fingers is easy, the reality is claims organizations serve a vital role in paying what is fair. Sure, we are the only part of the company that sends money out the door, but we control the outflow and aggressively pursue recoveries to bring some of that money back.

That said, are there areas of improvement? To address our needs, the aforementioned boss tasked me with building a quality team for a large, global insurer. After a few closed file audits, I remember going back to him and advising that his sentiment wasn’t totally wrong, but the fix was right in front of us. With so many adjusters doing things right, we simply had to build consistency across the organization.

Four areas were identified that could significantly move the needle: fraud recognition, liability assessment, negotiations and subrogation.

Like many organizations we had been doing more with less for years. Adjuster assignments and caseloads were up as were disposition demands. What wasn’t up were hours in the day with additional headwinds being created as some positions were being mandated as non-exempt. If you give an adjuster too many claims in a set number of hours something has to give. It is a simple reality.

Given we were already into the fiscal year there wasn’t a lot of money in the hopper to hire additional staff. We had to make the staff we had better.

We began with calibration exercises which were designed to share the behaviors of the top performing adjusters with all adjusters with the goal of moving the needle on behavior. Let’s look at four key areas where we focused.

Fraud recognition

Certain jurisdictions and claim types are more prone to fraud. By focusing on key claim characteristics adjusters can do a better job of identifying the hard fraud, which accounts for roughly 10% of claims nationwide. Scams such as staged accidents have recurring patterns that can be identified when data, both internal and external, is properly utilized. While hard fraud became easier to recognize, soft fraud was still a challenge. The problem with soft fraud (excessive treatment, modifier abuse, upcoding, unbundling and the like) is that it can be difficult to identify without the proper tools. While some property soft fraud occurs, the vast majority involves injury claims which were the result of legitimate accidents. Through the use of tools and improved investigation and negotiation strategies we enabled adjusters to identify these types of claims faster. The proactive approach greatly reduced the medical buildup and improved negotiation strategies enabled better outcomes.

Liability assessments

Comparative negligence is generally one of the greatest weaknesses that we saw, and I continue to see, in closed file audits. The vast majority of claims are closed at 100% or 0% with the occasional 50/50 sprinkled in for good measure. Why is this? There are several reasons. Training, management, enforcement, workload all play a role in this. But it becomes very telling when looking at jury verdicts in which more than 50% of all claims adjudicated nationwide have an apportionment of liability. In pure and modified comparative states the expectation should be very high that adjusters are assessing and negotiating comp neg.

Back when I was a litigation adjuster my biggest pet peeve was front line adjusters accepting 100% liability to make their job easier which in turn made downstream jobs harder. An untold number of claims went into litigation because the attorney was laser focused on how the company had already accepted the liability. But juries generally don’t, hence the litigation. One has to wonder how many bad liability decisions are being made in order to meet a disposition number resulting in a higher overall claim cost to the company due to downstream handling.

Not only are poor liability assessments a detriment to the claims process but also to the insured. If an insured is only 50% at fault for an accident but is assessed at 100%, they will not only pay more in premium, but they will also be out their deductible. This is an area that I believe is ripe for litigation should a crafty trial lawyer start investigating the frequency at which people are wrongfully assessed as being at fault for an accident.

Negotiations

The job of an adjuster is to negotiate. It always struck me as odd that some adjusters really didn’t like to negotiate. Negotiating an accurate settlement is the foundation of being a good fiduciary for your insured. Just like an insured should get an accurate liability assessment, they also deserve fair negotiations on their behalf.

Listening to adjusters negotiate can be eye opening. While some are truly outstanding at what they do, there are a lot of head scratching moments. It is not uncommon to hear an adjuster bid against themselves. I have heard adjusters offering multipliers of medical bills. There have been moments of extremely large jumps in offers on cases where the initial offer was far too much. Some negotiations are conducted via email. These are all bad practices. In negotiation trainings that I have attended and conducted there remains a lot of opportunity to hone this critical skill due to the many implications it has on the outcome of claims.

The quality of outcomes is directly related to the effectiveness of the negotiation strategy. Of course, this strategy is based upon an underlying effective investigation that begins at FNOL. Understanding all of the moving parts of the claim is critical. Things like well thought out statements with deep, probing questions and follow ups, witness statements, estimates, preservation of evidence, due diligence on prior claims history, potential third parties with liability, background checks on certain types of claims all play into the quality of the overall outcome.

Subrogation

Perhaps the greatest challenge we faced as a claim’s organization was subrogation. There were instances of subrogation being completely missed. In fact, we had hired SecondLook to do a closed file audit on claims where the front-line adjuster did not ID subro, and they ended up recovering a substantial amount of money. Front line adjusters were handling response arbitrations resulting in a very poor response rate with Arbitration Forums. By leveraging an internal team and an outside business partner this problem was quickly solved.

Subrogation has long been an area of opportunity with carriers, self-insured’s and TPA’s. While the aforementioned often do a decent job on certain aspects of claims, subrogation remains an area where opportunities exist. Our focus was on getting the claims with the highest probability and dollar amounts into the hands of our capable subrogation team. We then built a partnership externally to focus on everything else.

Where carriers typically see success in partnerships is with segmenting out certain types of claims such as arbitrations, high transaction claims with lower recovery dollars (i.e., property under 100K), overflow during peaks or CAT’s, unique claims where there may not be internal expertise. By creating the right subrogation ecosystem, we saw a big lift in recoveries.

Chris Tidball is an Executive Claims Consultant with SecondLook, a leading provider of subrogation and consultative services. He spent more than twenty years as an adjuster, manager and executive with multiple Top 10 carriers. Chris is the author of Re-Adjusted: Taking Your Claims Organization from Ordinary to Extraordinary! He is the creator of The Adjuster television series and can be reached at ctidball@2ndlook.net.

May

Missed Subrogation by the Numbers

Fire loss $1,326,534

Water loss $2,127,236

Risk Transfer $48,237

Cargo $759,342

Business Interruption $1,653,556

Uncashed Check in File $16,250

These are just a handful of examples of potentially missed subrogation from closed claim audits. Six files with over $6 million dollars in missed subrogation. It is estimated that 15% of all files are closed with a missed subrogation opportunity at a cost to the industry of over $15 billion dollars per year. My guess is that figure is substantially higher. During a recent conversation, a leading subrogation attorney shared that four of his 5 largest recoveries (all over $10 million dollars) had been closed by the adjuster as having no subrogation potential.

Missed subrogation is a very real problem costing carriers, TPA’s and self-insured’s sizeable amounts of money. In addition, there are many policyholders out deductibles because this subrogation was not pursued. This could be a cause for concern if a creative trial lawyer explored breaches of recovery fiduciary duties as a new cottage industry.

Having handled claims for a number of years I will be the first to say that getting outstanding and accurate results takes time and effort. In an environment of doing more with less adjusters are often burdened with large caseloads. In a quest to maximize profit and efficiencies claims organizations are pushing for file closures as a critical metric. As the adage goes, a closed file is a good file. True to a point, but not when money is being left on the table.

So how is subrogation being missed? First and foremost is a lack of comparative negligence identification and assessment. It is estimated that juries assess shared liability more than 50% of the time. Yet when we review claim files it is rare to see claims that are other than 0% or 100% with an occasional 50/50 sprinkled in for good measure. How is it that jurors, who are not trained claims experts, are getting it right when trained experts are missing it so often?

Accurately assessing liability is fundamental to claims. It is something that should be reviewed in every single claim no matter how apparent one’s negligence appears to be. The liability writeup should focus on duties owed and duties breached by all parties to the claim.

Beyond comparative negligence there are a myriad of opportunities missed because evidence is missing. While claims organizations do a decent job of working with their insured’s to promptly resolve property claims evidence is often left behind. If recovery potential is identified later in the claim cycle it is often too late as the evidence has been discarded. Herein lies the reason that SecondLook created their Property Recovery Partnership process, working with client’s beginning at FNOL, to identify and score recovery potential and working hand in hand with experts to obtain and preserve critical evidence.

Sometimes recovery just is not obvious to the adjuster. We often see this in no-fault states that have specific definitions where subrogation may or may not apply. We also see this in jurisdictions with conflicting caselaw that can impact chain of custody in the supply lines. This has become such a problem that the SecondLook team is patenting ReverseSubrogation™, a transformational process that will redefine recoveries for years to come.

Subrogation is not rocket science, unless it involves a Royal Caribbean cruise liner straying into a no-go zone off the coast of Cape Canaveral causing a SpaceX launch to be scrubbed at a cost of $1.6 million dollars in fuel and labor.

Rather, subrogation generally involves basic blocking and tackling. Evaluating every claim for recovery potential is a critical part of the end-to-end claim cycle. It is paramount to getting the most accurate claim results possible. Yet we continue to find a significant percentage of files that have been closed with missed recovery potential, a large portion of which is recoverable.

In a recent audit of 100,000 New York PIP files SecondLook recovered over $2 million dollars that both the adjuster and the subrogation vendor missed. In another audit of an outside subrogation vendor SecondLook recovered an amount missed in excess of 10% of the dollars referred. In an audit of a global insurer, looking at just one jurisdiction, over $5 million dollars was recovered.

This is real money that can have a profound impact on the bottom line of carriers, TPA’s and self-insureds. SecondLook provides closed file audits at no charge and has recovered over $1 billion dollars for clients.

Chris Tidball is an Executive Claims Consultant at SecondLook, a leading provider of audit, consulting, and subrogation services. He spent more than 25 years as an adjuster, manager, and executive with multiple Top 10 insurers. He is the author of Re-Adjusted: Taking Your Claims Organization From Ordinary to Extraordinary and is the creator of The Adjuster television series based on his fictional thriller Deep State. He can be reached at ctidball@2ndlook.net.

Apr

Claims Calibration and Auditing for Success

For anyone who has reviewed closed claims there are often a lot of head scratching moments. I recall times when files were opened and there were signed releases and uncashed checks. There are too many times to recall when an adjuster clearly blew a liability decision and missed any subrogation potential. Sometimes there are inappropriate notes. Other times there is coverage when there really isn’t any or a denial when coverage should have been afforded.

Adjusters are busy. Training isn’t always consistent. Adjusting ability also isn’t a level playing field. Some people are naturally born investigators while others should probably have chosen a different career path. Imagine the challenge I had when tasked with creating consistency in a large claims organization, along with an audit department to hold our many branches, managers and reps accountable. It is no easy task, but it can be done.

Calibration is the key to getting consistent results. If you give one hundred adjusters the exact same claim file you are going to get one hundred different outcomes in most organizations. Some of those outcomes will be good, others marginal and some pretty darn bad. The goal of calibration exercises is to ensure that the bottom 90% of performers get the same outcomes as the top 10%.

As we did this in our organization it became clear that some of our challenges started higher up in the organization with some supervisors and even managers having challenges with things like basic liability assessment. As a result of these findings, it became abundantly clear that money was being left on the table, at which time we brought in SecondLook to identify what had been missed. A lot of this was due to poor liability calls on the front line, resulting in millions of dollars paid never being referred to subrogation to recover.

There are a number of different issues that arise from subpar claims handling, in particular when adjusters do not effectively identify and assess comparative negligence. First and foremost, adjusters are fiduciaries for their insured’s. They need to have the insured’s best financial interests in mind when making decisions. When a claim is paid based on the insured being 100% at fault but the insured clearly isn’t 100% at fault a valid question is whether the insurer is acting in good faith towards the policyholder, in particular in pure comparative states. Not only are people charged with an at fault surcharge, but they are also out a portion of their deductible for which they would otherwise be entitled.

Based on industry data it is estimated that 15% of all claims are closed with a missed subrogation opportunity. The cost to the industry is around $15 billion dollars per year. But what about the cost to the policyholders who are faced with surcharges and out a portion of their deductible.

This is an area that seems ripe for litigation. A savvy trial lawyer, or in the worst case, class action firm, could potentially build the case against insurers who are not acting in the best interests of their policyholders.

Many of our clients recognize the challenges facing adjusters and utilize our no cost closed file review process to identify missed subrogation. In a recent review of 100,000 closed New York PIP files we recovered over $2 million dollars missed by the front line adjuster, the subro department and an outside subrogation vendor. In another recent audit we discovered a significant portion of files being closed with no recoveries by a carrier subrogation vendor did indeed have subrogation potential which has now been recovered, with deductibles returned to the policyholders.

Creating a best in class closed file review process is a great way to maximize carrier bottom line, protect the interests of policyholder’s and can be used as an affirmative defense in the event of creative plaintiff litigation.

Chris Tidball is an executive claims consultant with SecondLook, a leader in insurance subrogation. His career spans thirty years as an adjuster, manager, executive and consultant with multiple leading insurers and insurtechs. Chris is the author of Re-Adjusted: Taking Your Claims Organization From Ordinary To Extraordinary! He has written multiple fiction and nonfiction books and is the creator of the television series The Adjuster. He can be reached at ctidball@2ndlook.net.

Mar

Case Study: How poor negligence assessment not only missed subrogation, but costs insurers – Big Time!

In a recent meeting with a claims executive, I was a little taken aback when told that their company had decided to pull back on comparative negligence assessments. This carrier, a large global player, had historically done a great job improving liability outcomes.

As it turns out they were seeing an increase in third party DOI complaints about the very comparative negligence assessments we were discussing. So rather than focus on educating claimants and state regulators, they decided to pursue a different path. But at what expense?

Adjusters are fiduciaries of their insureds. They have an obligation to make the best financial decisions based on all facts present. Given that all but a handful of states have either modified or pure comparative negligence laws, shared liability should be a common element in many claims.

The concern I shared was of the bigger picture that could include a potential class action if word ever got out that a carrier was making decisions adverse to the insured for the benefit of the company. But beyond that what of the needless increase in other indemnity and expense costs?

Let’s take a look at a sample claim. The insured was making a left turn across two lanes of opposing traffic in Duval County, Florida. As they were completing their turn, they were hit in the right rear quarter panel by the claimant. The insured was cited for Failure to Yield ROW. The police report indicated that there was a witness who observed the claimant on their phone.

The initial handling adjuster called the insured and the claimant and accepted 100% liability within 24 hours. The police report had not yet been obtained, and the witness identified when the police report eventually arrived had not been called.

In the interim, the claimant had also retained an attorney for their alleged injuries. The duration of treatment was over one year, and the total meds incurred was over $40,000 dollars, not including the estimate for the surgical recommendation at L5-S1.

The injury adjuster took on the file with one hand tied behind their back due to the initial handler accepting full liability. This became an area of contention during negotiations as, by now, the witness had been contacted and confirmed the claimant cell phone usage. They also added that the claimant had sped up as the light turned yellow. A biomechanical engineer, examining the available evidence, concluded the same and based on the extent of physical damage estimated the claimant had also been exceeding the speed limit.

In this particular case the injury adjuster came to the right conclusion. The insured had made the left turn and had nearly cleared both lanes of traffic. The point of impact was to the insured right rear quarter panel. The claimant had the last clear chance, was speeding and inattentive. This is clearly a case where not only should the initial adjuster have asserted comparative, but they should have subrogated on behalf of their own insured. In the claim system the injury adjuster changed the liability assessment to 60% against the insured and 40% against the claimant.

The matter proceeded all the way through trial with the plaintiff attorney adamant that there was no fault on the part of their client, relying upon evidence that the insured received a citation. The asserted that the witness did not have a good vantage point and lacked the credentials to assess whether a vehicle was driving in excess of the posted speed limit.

Defense counsel did a solid job in presenting the facts, refuting the medical bills as unreasonable and the surgical recommendation as unnecessary, while pointing a substantial amount of blame on the plaintiff for their own negligence.

The jury ultimately rendered a decision on liability of 50/50. The medical bills that had been boarded were reduced to $20,000 dollars before the $10,000 PIP offset. There was an award of $5000 for the pain and suffering, with the final judgement being $7500 based upon the plaintiff’s own liability.

Expenses through trial were substantially more with $35,000 in defense fees and costs and $10,000 in expert fees and testimony costs, for a total of $45,000 dollars.

In retrospect this is a case that was mishandled from the start. The adjuster was rushing to move a file to closure rather than conducting a solid investigation, which would have led to a comparative assessment early on. By fighting this aspect of the claim and subrogating the claimant carrier for their fault, they would have put the injury adjuster in a much more favorable position to fight the claim, potentially limiting how aggressive the plaintiff attorney would have been when pursuing treatment.

Unfortunately, this scenario is not all that uncommon. In our closed file audits, we routinely find cases where subrogation was overlooked. In fact, in the majority of our biggest recoveries ever, files had been closed by adjusters with missed subrogation opportunities. In many of these files there were downstream implications, such as the above scenario, which ended up costing carriers a lot of time and money.

The benefit of a closed file audit can be tremendous in not only finding money, but in identifying internal trends within claims organizations. In my own organization I had retained SecondLook to do a closed file review. The significant amount of money they found was beneficial, but even more important were the trends that they uncovered that allowed us to dramatically improve our own claim operations.

While perfection may not be attainable, striving for it certainly results in excellence that insurers and insured’s alike.

Chris Tidball is an Executive Claims Consultant with SecondLook, a leading provider of subrogation services. He spent his career in various adjusting, management, and leadership roles with leading Top 10 insurers. Chris is the author of Re-Adjusted: 20 Essential Rules to Take Your Claims Organization from Ordinary to Extraordinary! He has written multiple other fiction and non-fiction works, as well as creating The Adjuster television series. He can be reached at ctidball@2ndlook.net

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