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Explaining the Need For Professional Claims Handlers  

 In search of profit, insurers have decimated their professional claims  staff. They laid off experienced personnel and replaced them with young,  untrained, unprepared people. A virtual clerk replaced the old  professional claims handler.  Process and computers replaced hands-on human skill and judgment. Money  was saved on the expense side of the business by paying lower salaries.  Within three months of firing the experienced claims people gross profit  increased. The accountants were happy. The quarterly profits increased.  None of the happy people were insurance professionals. None of them  understood how a professional claims adjuster saves the insurer by  establishing a fair amount of loss, avoiding payment for items not lost  or overvalued, and by avoiding losses for which no coverage was provided  by the policy.  The promises made by an insurance policy are kept by the professional  claims person. Keeping a professional claims staff dedicated to  excellence in claims handling is cost-effective over long periods of  time. A professional and experienced adjuster will save the insurer  millions by resolving disputes, paying claims owed promptly and fairly,  and by so doing avoiding litigation and claims of breach of contract and  breach of the covenant of good faith and fair dealing.  The professional claims person is an important part of the insurer\\u2019s  defense against litigation by insureds against insurers for breach of  contract and the tort of bad faith. Claims professionals resolve more  claims for less money without the need for either party to involve  counsel. A happy claimant satisfied with the results of his or her claim  will never sue the insurer.  Incompetent or inadequate claims personnel force insureds and claimants  to public insurance adjusters and lawyers. Every study performed on  claims establishes that claims with an insured or claimant represented  by counsel cost the insurer more than those where counsel is not  involved.  Prompt, effective, professional claims handling saves money for both the  insured and the insurer and fulfills the promises made when the insurer  sold the policy.  Insurers who believe they can handle first or third party claims with  young, inexpensive, inexperienced and untrained claims handlers should  be accosted by angry stockholders whose dividends have plummeted, or  will plummet, as a result. When an insurer compromises on claims staff,  profits, thin as they may have been previously, will move rapidly into  negative territory. Tort and punitive damages will deplete reserves.  Insurers will quickly question why they are writing insurance. Those who  stay in the business of insurance will either adopt a program requiring  excellence in claims handling from every member of their claims staff,  or they will fail.  ZALMA OPINION   The claims department of an insurance company is the key to a successful  insurance business. Every insurance policy makes promises to the  insured to indemnify and or defend the insured or to pay to repair or  replace real or personal property destroyed by a peril insured against.  It is the claims personnel who fulfill the promises made by the insurer  when the policy was sold. A claims department that provides excellence  in claims handling satisfy those insured and causes those insured to  tell their friends, neighbors and relatives about the quality of the  insurer and thereby increase the sales and profits of the insurer. An  Excellence in Claims Handling program written, produced and published by  me for ClaimSchool, Inc. is available for license.   \\xa9 2021 \\u2013 Barry Zalma