Essentials of Loss Adjusting C110

Chapter Five – Loss Investigation

Outline the factors to consider in planning an investigation.

What is the purpose of investigating a claim?

What affects the scope of an investigation planned by the insurer?

When a loss adjuster must inspect the scene of a loss, what responsible action must be taken with respect to safety?

Purpose of the Investigation 

·         is to confirm, record, and document the facts of the claim

·         collections of solid information forms the foundation upon which a decision can be made

·         adjuster will record the facts, assess the damage and the amount recoverable under a policy

Plan of Investigation

·         scope of the investigation is primarily determined by the magnitude of the loss

·         adjusters must operate with limited resources and time to get the facts that will permit a claim to be settled, compromised or denied

·         in the course of investigating the adjuster must remain objective, cautious, persistent and fair

·         claims activities must be prioritized, and thorough but also options must also deliberately and carefully chosen

·         liability claims tend to be less straight forward than property damage claims – the adjuster must measure up the third parties statement to that of the insured’s

·         the investigation to determine liability should end when the issue of liability become clear against the insured

·         once a property damage claim amount has been established the claim should be settled

·         permission is needed by the insured for the adjuster to obtain all documents related to financial, employment and medical 

·         identifying the possibility of fraud – the insured may insist on a quick settlement too aggressively

When planning on visiting the scene of a loss, loss adjusters must act responsibly to ensure their personal safety. Local health and safety laws must be recognized and followed. Visiting a site or person might  hold dangers.

Purpose of the Investigation

• claims decisions made on basis of information collected
• adjuster records the facts about what happened, assess what is recoverable under the policy, and assesses the amount of damages
• investigation determines the facts and establishes the basis for coverage and liability assessment

Plan of Investigation

• scope of the investigation is primarily determined by the magnitude of loss
• prioritize and discriminate to determine liability
• providing a proof of loss is not an admission that a policy is in force
• identify possibility of fraud

What is the difference between a non-waiver agreement and a reservation of rights letter?

What does the indemnity clause accomplish in a non-waiver agreement?

Procedures when Coverage is in Question

·         insurance legislation protects the insurer by permitting an investigation of a claim without prejudice to its rights

·         when an adjuster uncovers coverage issues on a claim, decisions must be made as to how best to protect the insurer

·         for a liability claim the adjuster must withdraw when it is clear that there is no coverage dilemma arises when a court may rule in favour of coverage the insurer may leave the insured with little resources or knowledge to defend against a claim

·         work on a claim must stop until proper steps are taken to protect the insurer against an estoppel

·         when a policy violation or exclusion arises a non-waiver agreement permits the adjuster to maintain contact with the insured throughout the investigation without creating an estoppel – insured is required to sign the agreement

·         the indemnity clause states that the insured agrees to reimburse the insurer for expenditures should it be determined that no coverage exists

·         typical non-waiver agreement, after identifying the parties the date of loss, the location, the type of claim and the issues that gave rise to the insured’s stand on coverage ……(pg4)

·         should the insured refuse to sign the agreement a reservation of rights letter can be sent – a unilateral notice by the insurer asserting that it is preserving its options and wavering none of its rights

·         when preparing a non-waiver agreement or a reservation of rights letter particulars that must be included: the nature of the claim, when it occurred, who made the claim and when it was reported, and the nature of the agreement 

·         the adjuster must report all developments on the file to the insured

·         if the insured is asked to sign a non-waiver agreement or receives a  reservation of rights letter there will be friction in the relationship and it may deteriorate

Procedures when Coverage is in Question

• insurance legislation protects the insurer by permitting an investigation of a claim without prejudice
• liability claim-insurer may withdraw from an investigation when there is no coverage
• possibility of a policy violation or exclusion arises it would be a non-waiver agreement
• insured required to sign the agreement in order to have effect in law
• should the insured refused to sign the agreement, a reservation of rights letter an be sent
• when preparing the non-waiver agreement particulars of the issues affecting coverage must be included
• state the nature of the claim
• state the nature of the agreement

Distinguish between effective and ineffective questioning techniques for a claims situation.

Outline the general approach a loss adjuster might take to conducting an interview and obtaining a statement.

What are some of the advantages of preparing properly for the interview?

How should an adjuster deal with a situation when the person being interviewed made an obvious error?

Interview Techniques

·         obvious errors made by the insured may need to be tactfully pointed out and the extent of the error needs to be shown to the person

·         to rely on a negative statement the adjuster should ask the person to elaborate on why the information crucial to the claim was not seen

·         information gained is crucial it guides any further investigation

Interview Techniques

• must adopt the style and personality of the people we interview
• use good judgment and common sense to draw out the true facts
• accurately document information as accurately as possible

Planning for the Interview

·         the process of obtaining information from an insured, witness or third party

·         prepare with careful planning – have as much information as possible before the interview, prepare a checklist to cover all important points

·         adjusters conduct investigative interviews – not interrogations

·         preparation is essential it allows the adjuster to maintain confidence and know when the conversation is losing focus, this also improves the chances that the needed information will be obtained and less mistakes made

·         review all existing documents, statements and background information

·         anticipate coverage issues and be prepared to answer questions on these issues

·         allocate enough time to conduct the interview we do not want to rush the person we are trying to interview

·         timing of the interview should take place as soon after the loss as possible to speed up the claims process – and to gather all information before it is forgotten or tainted

·         prepare questions ahead of time and check them off as the interview proceeds to ensure no issues are forgotten – do not limit yourself to those questions

Planning for the Interview

• adjust may just take notes of a conversation
• allocate enough time
• location of the interview convenient for the witness
• timing of the interview very important
• use checklists or following prepared lists of questions
• use listening skills at all times

Under what circumstances might the loss adjuster begin an interview with a short answer question?

Give an example of a direct question asked by a loss adjuster to draw out more information.

What can a loss adjuster do when he or she recognizes the person being interviewed is in distress?

 

Model Interview System

·         tips and process for the interview include:

1.    begin with an introduction of yourself and your role – set the person being interviewed at ease, and be pleasant – begin with an open ended question

2.    be patient and listen – allow the person to finish before jumping in with the next question

3.    ask for explanation when something is not clear – draw whatever detail is necessary to get adequate information

Direct of close-ended question – calls for a very specific and usually short response

4.    maintain composure – by maintaining composure we maintain control                                                                                          over the encounter

5.    evaluate body language – if a person is in distress be sensitive, compassion will ease any rising tension

6.    make notes as needed – but be ready to show the person the notes that were taken

Model Interview System

Helpful tips

• introduce yourself and explain your role
• have open-ended questions ready
• be patient and listen
• be sensitive 
• ask for an explanation when something is not clear
• direct or close-ended question calls for a very specific short response
• maintain compusure
• in a face-to-face interview body language should be evaluated
• make notes as needed

Discuss the value and challenges of obtaining information from witnesses.

Define witness.

What strategies could a loss adjuster employ to get an interview with an uncooperative independent witness?

 

 

Witnesses

Witness – is anyone who can provide facts that are relevant and material to the claim 

·         witnesses must be accommodated in any way – communication skills must be used to convince a witness to cooperate

·         if a witness is un cooperative there is no legal action against them unless the case ends up in court

·         to locate witnesses the adjuster may have to canvass the area in which the accident occurred

·         witnesses choose the interview location

·         information to locate the witness at a later date must be obtained

·         encourage cooperation from those unwilling to provide information – information from an independent witness is more credible than a friend of the insured in the accident

·         try to organize a meeting with a witness as soon as possible before others try to manipulate the witness 

Witnesses

A witness is anyone who can provide facts that are relevant and material to the claim

• statements provide a record of the accident or claim
• use our communication skills to convince a witness to cooperate
• let the witness chose the interview location
• information needed so that anyone working on the file can contact the witness
• statement from an impartial independent witness has more credibility than that of an insured
• once a witness is located an interview should be arranged as soon as possible

Explain the function of evidence and how it is categorized.

Describe the types of evidence a loss adjuster might collect on a claims file and how the evidence should be preserved. 

What are three categories for classifying admissible evidence?

Explain the difference between direct evidence and circumstantial evidence.

Explain how photographs and similar documentation help a claims investigation.

What are the drawbacks associated with writing on or otherwise altering claims documentation.

What is spoiliation of evidence?

Documentation and Evidence

·         evidence from the scene may be documented with diagrams including measurements, dimensions, photographs, or a video recording

·         when at the scene of a loss ensure personal safety

·         documents generated in an investigation must also remain in the same condition as they were received

·         copies of relevant documents that may transfer liability must be obtained and reviewed

·         an adjusters file should show when and how documents came to be in a file

·         Admissible evidence classification includes:

1.    oral testimony – sworn and un-sworn statements

2.    real evidence – tangible items, and experiments

3.    documents – books, policies, photos, and recordings

·         most evidence is oral testimony – written and recorded statements are usually only used to challenge the oral statement made

Direct Evidence – what was actually seen by the witness

Circumstantial Evidence – what can be inferred from what was presented as evidence

·         photos and videos remind people of what the area looked like and may enhance physical evidence

·         insured may offer photos to validate the existence of destroyed or stolen property

Preserving Evidence

·         if evidence is destroyed intentionally to commit fraud or to suppress the truth sanctions may be made by the courts

·         formal written statements, claim file notes and independent adjuster notes are all claims documentation

Spoiliation is used to describe the alteration or destruction of evidence relevant to a legal proceeding.

Documentation and Evidence

• scene of an accident or loss provides information to clarify or confirm the details of the claim
• evidence from the scene of the loss may be documented
• copies of any relevant contract might transfer liability to another party should be obtained and reviewed
• adjuster's file should show when and how documents came to be in the file
• admissible evidence has been classified into
• oral testimony-sworn statements, unsworn statements
• real evidence-tangible items, experiments
• documents-books, policies, photographs, recordings etc.
• most evidence is oral
• direct evidence relates to what is seen by a witness
• circumstantial is what can be inferred

Preserving Evidence

• adjuster must identify any physical evidence
• evidence is destroyed intentionally to commit fraud or suppress the truth
• formal written statements claims file notes, and independent adjuster reports all represent claim documentation

Identify the type of experts who might be consulted in the course of a claims investigation.

Define Expert.

Define forensic.

 

Experts

Expert – is a properly qualified person to provide an analysis or opinion regarding a point in question

·         using appropriate experts can help the adjuster determine the cause of loss, which in some cases may mean the loss is not covered, it can also demonstrate who is responsible for a loss , and the amount of the loss

·         services should be sought from someone who is reputable, stable and properly qualified in the field

·         experts who specialize in investigation connected to judicial process are called forensic experts

Forensic – used with or connected to a court of law

Forensic Expert – are specially qualified to appear in court as a witness

·         the principles of the experts profession are applied to the law and legal cases

·         if a case is litigated the credentials of the expert will be scrutinized – their credentials must have context to the claims file under review – the company will be assessed as to its stability and reliability in its field of expertise

·         experts that may be relied upon include:

1.    origin and cause specialists

2.    appraisers, contractors, and suppliers

3.    electrical, mechanical, or chemical engineers

4.    accident reconstruction specialists

5.    investigative and surveillance specialists

6.     photographers

7.    doctors

8.    accountants and

9.    lawyers

Reports

·         helpful reports to an adjuster include:

1.    firefighter reports

2.    police reports

3.    medical reports

4.    and coroners reports

·         the reports will help to determine the extent of the damage and substantiate the claims made by the insured

Experts

An expert is a properly qualified person to provide an analysis or opinion regarding a point in question

Using appropriate experts helps the adjuster determine

• cause of loss
• amount of loss

The term forensic means used with or connected to a court of law. Forensic experts are specially qualified to appear in court as witnesses.

Experts who specialize in investigations connected to a judicial process are called forensic experts

• expert may not be a forensic expert
• adjusters may rely on any of the following experts to resolve a claims issue:
• Origin and cause specialists
• Appraisers
• Contractors
• Suppliers
• Electrical, mechanical, or chemical engineers
• Accident reconstruction specialists
• Investigative specialists
• Surveillance specialists
• Photographers
• Doctors
• Accountants
• Lawyers