Spring has Sprung- A Timely Reminder about Adjuster Safety Concerns is Due!

March 23, 2009

We’ve previously posted numerous blogs about adjuster safety issues. With spring’s arrival Sunday, now is a great time to bring these old blog entries back up for new reader’s viewing our blog:

Safety Equipment/Ladder Safety issues for Adjusters:

http://dimechimes.wordpress.com/2008/06/18/ladder-safety-concerns-for-adjusters-safety-equipment-suggestions/

Center for Disease Control Shot Recommendations for Emergency Workers in Disaster and Flood Zones:

http://dimechimes.wordpress.com/2008/06/16/what-shots-does-cdc-recommend-for-disaster-workers-watch-for-more-flood-adjuster-training-info-this-week/

Adjuster Shot in TN in March 08 while on storm duty:

http://dimechimes.wordpress.com/2008/04/10/adjuster-safety-another-warning-march-08-nationwide-adjuster-shot-in-vehicle-in-tn-while-on-storm-duty/

Field adjuster safety concerns- Remembering Katie Froeschle of Tampa, FL murdered while on a field appoint:

http://dimechimes.wordpress.com/2007/09/14/field-adjuster-safety-concerns-be-careful-remembering-katie-froeschle-of-tampa-fl/

Defusing an Angry Insured:

http://dimechimes.wordpress.com/2007/09/15/defusing-an-angry-insured-dealing-with-dinosaur-brain-lizard-logic-thinking-co-workers/

Crisis Intervention while Catastrophe Adjusting-Guest blog by Steve Ebner

http://dimechimes.wordpress.com/2007/08/16/crisis-intervention-while-catastrophe-adjusting-by-guest-blogger-steve-ebner/

Please be safe while out there working this season!


New Source for Temporary Housing in TX and LA area for Adjusters and Insured Additional Living Expense-Temporary Housing Part II-Updated 9/25/08 1PM CST

September 20, 2008

Thanks to a participating Claim Manager on ClaimSmentor, we have a new source for Hurricane Ike territories in and near the Houston, TX area.

We had previously blogged with links to many Corporate Housing vendors who are familiar with insurance housing for additional living expenses and for adjuster housing in this prior blog if you missed it:

http://dimechimes.wordpress.com/2007/08/15/temporary-housing-links-for-adjusters-temporary-housing-optionsadditional-living-expense-training/

Here is the newest source highly recommended by a claim manager who recently had the opportunity to work with them in Houston. Please let them know you heard about this from our blog or ClaimSmentor when contacting this group:

Melanie Levy
Owner
Houston Apartment Insiders
832.721.6748 (direct)
1.866.869.9192 (toll free)
melanie@houstonapartmentinsiders.com
www.houstonapartmentinsiders.com

**Update 9/25/08- 2nd new source who contacted us wishing to find adjusters and displaced insureds rental property for additional living expenses and adjuster catastrophe housing:

Kate Sansom
Marketing and Military Contracts Specialist
kate@corporates.com
 
Preferred Corporate Housing
³Your Permanent Solution for Temporary Housing Nationwide!²
(800) 960-0102 ­ Ext. 16
(713) 722-9013 ­ Fax

For Nationwide Furnished Corporate Housing:
http://www.corporates.com
 
To Submit a New Housing Request:
http://web.corporates.com/pch/leads/request.php

DUNS: 838451920
NAICS Codes: 531110, 531190, 531210, 531311, 721110, 721199, 721310
CAGE Code: 3B8H4
SIC Codes: 6513, 6519, 7011, 7021
PSC Codes: V231, V301, V999, X161, X163, X169

Here is a 2nd contact there as well:

 Business Development Director, Stacey Sugg

Cell  (713) 857-8093
Office  (800) 960-0102 

Email at stacey@corporates.com


Errors and Omissions Coverage- Guest Bloggers- Dale Moore and Michael Hale for CPLIC

February 8, 2008

We’d like to thank Dale Moore, Client Relations Director and Michael Hale, President of CPLIC at www.cplic.net for providing answers to initial E & O questions posed by members at ClaimSmentor which we share with our blog readers as well today. Please feel free to pose additional questions in reply to this blog posting and we’ll get Dale to answer them in reply to this guest blog entry!

1)    Question:  Is Errors and Omissions (E & O) occurrence based?  Does it only cover what happens during the policy period?

Answer:  A few companies do offer E & O on an occurrence form but most professional liability insurance, of which E & O is a part, is written on a claims made basis and has been since around 1985.  On a claims made policy you can purchase retrospective coverage back for as long as you have been continuously insured.  Since this cost money you should look at the statue of limitations where you do your work and buy what you need.  Then as long as the inspection that you made or the event occurs that brings about a claim is within the retrospective period and you report to your carrier as soon as the claim is made against you, coverage at the time of your report would apply.

 2)    Question:  How long should the policy be kept in effect to cover one?

Answer:  The coverage should be in effect when you first start handling claims and should remain in effect by annual renewals until you retire or leave the business.  Most companies will offer you a one, two or three year extended reporting period after you cease handling claims for any reason which will apply to any claims brought against you during that time as long as the error occurred before you elected to start that extension. 

3)    Question:  What are the normal limits of Liability?

Answer:  Most companies offer limits from $500,000 to $5,000,000.  Most adjusters buy limits that are required by their clients as they do not have those size assets to protect. 

4)    Question:  What are minimum and maximum limits?

Answer:  A few companies will insure you for limits lower than $500,000, say $100,000 or $250,000 but not many above $5,000,000.  To obtain limits above you would buy an excess policy. 

5)    Question:  Do the different states regulate E & O?

Answer:  If you insure with a traditional insurance company that is admitted in the state that you do business then your state would regulate that insurance company.  Increasingly, adjusters are choosing to belong to and be insured by the only Risk Retention Group specifically created for adjusters. As a Risk Retention Group it is regulated by the state of domicile and registered in all other states. 

6)    Question:  What are the policies for Florida?

Answer:  Many of the traditional insurance companies would use the ISO forms to support their policies.  Some of the surplus lines companies may use some type of manuscript.  Claim Professionals Liability Insurance Company, RRG uses a manuscript policy written specifically for independent claim professionals and it may be viewed at www.cplic.net by clicking on the bar for policy.

 7)    Question:  If I already have E & O and work a storm for a company that offers E & O, what happens then?

Answer:  Your E & O is to protect you.  The company you are working for may also have a program that will protect you but you will have to see and read their actual policy to be sure.  However, their policy would not normally protect you from claims brought by them against you.  You are always better protected to have coverage specifically in your name.

 8)    Question:  Are attorney fees and court costs covered by E & O?

Answer:  A primary policy would cover defense costs if the claim against you is covered.  Defense costs would include both.

 9)    Question:  Are costs to travel to a different jurisdiction for depositions or court appearances covered?

Answer:  When your insurance company instructs you to travel that cost is generally covered; however, your lost income is not generally covered.  You will have to look at the specific language to be sure.  

10)    Question:  Is E & O higher when you are new and does it go down with experience?     

Answer:  The basis for charging for the coverage is generally the revenue you produce.  Therefore, your premium will generally increase as you become more productive.

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Note that we also think this article  from Sept 2007 which includes quotes by another CPLIC representative to be excellent info on E and O as well over at the Roughnotes.com site:

http://www.roughnotes.com/imp_cybercast/Archives/v004_September2007/index.htm

Direct contact information for Dale if you are more comfortable directly contacting them is: 

 

Dale Moore, CIC
Director Client Services
CPLIC, RRG & Carter Claims
17742 Irvine Blvd., Ste 102
Tustin, CA 92780
Tel: 877-572-7542
Fax: 714-731-4605
www.cplic.net
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CPLIC is endorsed by both the National Assn of Independent Insurance Adjusters (NAIIA) and the National Assn of Catastrophe Adjusters (NACA) based on information on both of their websites.
There is also informative information found on the Claim Professional Liability Insurance Company (CPLIC) website.
Here is also a link to their E & O survey application form found on their website.
http://www.cplic.net/Short_App.pdf
***********************************
Again, feel free to post your additional questions on E & O by replying below or in the ongoing topic at ClaimSmentor for replies by CPLIC. We’ll be sure to get the links to your additional questions to them for a response.
I’ll start off the first additional questions I’ve recently received below:
**********************
1) What should an adjuster ask the adjusting firm for IF they are going to use their E & O carrier for coverage? At minimum, I would think they should get the carrier appropriate information such as policy number and limits and contact information. How about the coverage forms? Do you know if this is normally supplied by the Adjusting firms?
2) You mentioned the limits available. What do you recommend as a minimum for adjusters?
3) Is it hard for a new adjuster to be approved with no experience for E & O coverage?
4) What are some of the common reasons for claims…i.e..mistakes of adjusters/adjusting firms that bring forth claims under their policies?
5) Do attorney fees/ court costs mentioned in your Q & A reduce the E & O limits to pay a claim?
6) What are common exclusions on an E & O policy and typical reasons besides non payment for cancellation of an E & O policy?
7) Do needs differ for catastrophe adjusters who travel nationwide vs a daily adjuster working claims in a fixed territory?
8) Given the large number of adjusters named in lawsuits after Katrina, have you seen a large increase in E & O claims since 05 creating a need for higher limits and a definite higher priority that adjusters carry their own individual E & O policy?
9) If an adjuster does carry their own E & O policy and they are covered on an adjusting firms E &O, what is a typical “other” insurance clause as to which policy would be primary?
10) Should an adjuster work claims for multiple adjusting firms, would that change their coverage needs?
**********************************************
Stayed tuned for E & O Part II when we get responses to the 10 new questions we’ve received!

 


Major Changes in the Way Carriers Recruit and Train adjusters…is there really a lack of available adjusters?

November 20, 2007

This is an excellent article from Risk And Insurance regarding changes afloat in the adjusting world. While I agree that the training aspect has drastically changed since I entered the adjusting ranks in the early 80′s, I do not agree there is a lack of available adjusters. (The article points out that the opinion on this depends on who you talk to!)

Handling our staffing firm and talking to hundreds of adjusters each month, I am very attuned to who is available. In spite of what you may read on many forums that there is a glut of new adjusters, we receive calls from hundreds of very experienced adjusters who are available and looking for assignments. Is what the carrier doesn’t understand is that the lack of available adjusters depends solely on the human resource efforts of different adjusting firms. Some are extremely proactive while others rely on adjusters to come to them to apply. I am always amazed at the high quality of adjusters we hear from who cannot find assignments.

I’d be interested in receiving comments from many of you reading this article and your opinions on the recruiting, the training comments, and the availability based on your findings in the market.

Here is the article “Taking Time to Adjust” by Erin Fogg online on Risk and Insurance:

http://www.riskandinsurance.com/story.jsp?storyId=16725831


Independent Adjuster vs Employee?

September 27, 2007

Storm season always brings up the topic “are you an independent adjuster or are you an employee” as independents start receiving new contracts from adjusting firms for the season.

We wrote a blog about the caution new adjusters need to use when signing independent contracts in our blog called Splish Splash don’t go takin’ a bath. Here is a link to it.

While we are still hoping for a great employment attorney to provide an opinion on some of the issues Independent adjusters commonly face, (am I dreaming someone will come forward and volunteer to interpret these things for us as a guest blogger employment attorney or volunteer employment attorney participant)? I’ll post some links to some interesting things we found while researching this topic.

While I’m not sure we entirely understand the issue as it relates to court decisions, we think we’ve come up with a consensus that the issue relates to “independent judgment”  and “control” issues vs whether or not you or your adjusting firm considers you as an independent.

The majority of independent contracts the adjusters have shared with us state the adjuster understands they are a 1099 reporting independent but there are several such as ASU which states on their website here that their adjusting firm is 100% employee owned. I had the opportunity to meet several of their members at the 2007 NACA convention and find this approach most appealing for adjusters to have benefits, educational assistance, 401K plans and many other benefits independents normally don’t have access to with the majority of firms. Do you know of other firms providing employee status vs independent? It would be great to hear about these opportunities via reply to this blog if so!

I found an interesting site called The Society for Human Resource Management (SHRM). Here is a link to their website. They say they are the largest professional organization devoted to Human Resource management.

Their website points out that there are many agencies that have statutory jurisdiction over the “independent vs employee” issue. Here’s an excerpt from their site about this:

“The many statutory jurisdictions that cover classification of independent contractors include the Family and Medical Leave Act, the Americans with Disabilities Act, the Internal Revenue Code, the Fair Labor Standards Act, the National Labor Relations Act, and individual state-by-state unemployment insurance codes” thus the comment above about not being sure we understand all of the issues because there are just too many federal and state laws involved in the classification determination.

An employment law attorney and member of their site addressed the House Labor and Education committee on July 24, 2007 stressing the need for guidance for employers to properly classify employees due to the confusion with all of the programs listed above. Here is a great article about her testimony. I think the following statement in her testimony best addresses the problem independent adjusting firms, carriers, and adjusters face as they create and sign contracts:

“Every new working relationship brings with it the challenge of asking the right questions to ensure the employment situation is being properly classified as an employee or non-employee worker,” said Walters. “In my experience, employers do on occasion unwittingly, misclassify employees as independent contractors,” she said.

Here is a link to the House Committee July 24, 2007 hearing that includes links to the webcast of the testimony at this meeting and to the presentations of several other speakers to include Paul DeCamp, Wage and Hour Administrator from the Department of Labor. Note that the question in the title of the hearing was “What Policies and Practices Best Protect Workers“. 

Chairman Andrew’s  opening statement is found here  and Chairman Woolsey’s opening statement is found on this link. These are worth the read as they outline the reasons employers may misclassify employees…basically to avoid health insurance and workers comp and other benefits such as social security payments they would have to pay or an employee would be due. From information gleaned in Woolsey’s opening statement, CA considers the problem so significant ( see yesterday’s blog too on CA and adjuster overtime issues) that they have State Assembly Bill S.B. 622 that if passed would assess penalties of up to 15K per violation or 25K  per violation if employers have engaged in a pattern of misclassification. This document here says that this bill passed the Assembly 9/10/07 and the Senate on 9/12/07. Those are pretty hefty fines and I hope that adjusting firm owners have been advised of these new provisions by their employment attorneys and have reviewed these issues as they pertain to using independents for each various operation such as carrier daily branch assist on daily claims, inside adjusters in carrier claim central operations, as well as their classifications for catastrophe independent adjusters especially for the types of contracts I’ve seen that require exclusive work with the independent firm or carrier. Would the use of independents as inside adjusters be cause for concern about classifying them as other than 1099 employees? How about daily assist or daily adjusters working under an exclusive contract? I don’t know but I bet a good employment attorney would know the proper classification. I would also want to know about how a bill such as this one passed in CA would apply to an adjusting firm going out to CA to work earthquake claims. There are many firms holding California Earthquake Certification classes in preparation for an inevitable earthquake out there but have they done equally thorough research into classification of adjusters and if those rules would apply to out of state adjusting firms coming in to work catastrophe assignments? I’m not sure how those laws apply when your working out of state as a vendor vs it being the permanent state of your adjusting firm office.

Paul DeCamp’s testimony found here is longer but if I were an adjusting firm owner, I’d certainly take the time to read this and look at the list of 7 items he calls relevant factors to determine if a worker is properly classified. The one I found interesting the most from the independent adjuster standpoint is the relevant question of “Permanency of the relationship”. Page 2 of his testimony also goes into interesting details about “the process” of reviewing these factors and payroll records and how they conduct their inspections. I had no idea that the Wage and Hour Divisions primary responsibility was dealing with complaints as the testimony says 70-78% of their work is addressing workers complaints on these issues. It is  also very important to read the comments further down on page 5 that says that temporary help is often in the most commonly misclassified category. I’d also read the comments  since this is a national program and the testimony states that they are recommending misclassifications  found by the Wage and Hour Division (WHD) for many other violations for some of the other agencies(listed at the beginning of this blog) that they find value in sharing that information nationally with other state and federal programs(page 6). Pg 7 indicates that GAO feels that employers should be notified when they make these reports to other agencies to investigate while WHD did not think it was appropriate for them to report them due to the fact they do not know the rules nor administer the programs for the other agencies looking at independent classifications. 

Another point interesting to property and catastrophe adjusters would be the comments on page 4 indicating that construction companies are in the group receiving the largest findings of misclassifications. The findings in Decamps report about this are echoed by Sara Stafford with a construction firm who testified that firms such as hers are often penalized by losing contract bids as they include the cost of employee benefits in their estimating costs (overhead and such) when other construction firms improperly classify employees as independents which costs the complying firms work by abiding by the classifications. I imagine this would be the same for independent adjusting firms who would have to increase fee schedules to cover their overhead for employee benefits if they were required to provide workers comp and benefits. Here is the link to Sara’s testimony. I didn’t have time to get to the testimony of two other speakers you can find on the links above.

Other research we found in the past few months includes:

This informational article from the state of Texas on form C-8(0406) found here which contains 20 relevant topics to test your classifications.

Here are some interesting comments on independents here with several more good factors to consider.

I really liked this 20 factor check list for small businesses to determine employee vs independent contractor check list to determine under common law what factors apply found here.

This article here from another law firm discusses NY’s “right to control” factor. It’s an older article from 98 but a good article. This website is full of employment articles at www.ebglaw.com.

Here is a good weblink for IRS information on independent contractors which refers also to links for several publications  you would want to refer to found here on their website.

I found this case from Vermont that the Insurance Journal posted quite interesting from May 2007 where at home workers for a knitting company were determined to be employees versus independent contractors. Here is a link to the article.

It took several days to have time to finish up this blog entry due to weeding out alot of repetitive information and narrow it down to some of the most concise current information you might find useful. The research has been well worth the while as I’ve learned that these issues are not set in stone but very active current topics of discussion, court cases, and federal and state agency hearings and discussions right here and now in 2007. The National Law Journal  at www.NLJ.com on their 9/27/07 article update says this will be a banner year for Supreme court labor and employment cases as they have granted review of many cases in this overview of the article:

September 27, 2007

TODAY’S NEWS

FROM THE UPCOMING ISSUE  |  Supreme Court loads up on employment cases
Besides adding such high-profile issues as the constitutionality of lethal injection executions and voter ID laws to its docket, the Supreme Court ensured, through its latest grants of review, what is likely to be a “banner” year for labor and employment law.

********

This appears to be the time for independent adjusting firms to update the opinions from their employment lawyers if they haven’t already done so to verifiy if their current practices meet all of the 2007 regulations with all of these current discussions going on. All Independents are waiting on weather (wow as independents call it) for assignments so while everyone is waiting you might want to take the time to double check the classifications to make sure everyone is compliant with their state and federal 2007 regulations. I am most curious about how the state laws apply when an adjusting firm from one state ventures into other states to handle losses. Are they subject to those other state laws too? This feels like going to college! The more you learn the more questions you have!


Insurance Adjuster Overtime Pay Issues and Complaints in the news

September 24, 2007

I’ve been trying to find time to write about the big ongoing question about adjuster overtime pay and a related issue on the commonly asked question ” am I an independent or am I an employee”.  The new suit brought by two AIG adjusters   in September 2007 again brings this topic to the forefront and we’ll watch this case to see if anything new develops to help us understand these issues. We would appreciate any comments by employment attorneys to help us clarify these issues. Today we will provide information on the overtime issue and tomorrow we’ll blog about the Independent adjuster vs employee questions which we are frequently asked about by adjusters when signing independent adjusting firm contracts.

Here is a link to the news article about the AIG adjusters new suit. Here is also a link to the Bloomberg article on this new suit.It’s not just carrier staff adjusters and employees filing these suits as this article shows adjusting firms are the subject of such suits also in this article saying Pilot Catastrophe  Services  also received a Complaint in 2004. I’d like to know how the adjusting firm case was resolved but could find no information on the web about the outcome of the case.

The AAICP -American Association of Independent Claims Professionals wrote an excellent article on this overtime issue in June 2004 found here. This article in part says:

“Insurance claims adjusters are still exempt from federal overtime requirements under the United States’ Department of Labor, Wage and Hour Division’s final version of the controversial changes to the white collar exemption regulations. As requested by the American Association of Independent Claims Professionals (AAICP), an association of independent claims adjusting companies, the Labor Department specifically noted in the new regulations that claims adjusters are generally exempt from overtime pay requirements regardless of what kind of company they may work for – an insurance company or an independent. The new regulations also make some adjustments to exempt salary requirements that may affect claims adjusters, including raising the minimum exempt salary and creating a new pseudo-presumption of exempt status for higher wage-earners.”

Here is more important information in this article:

“As requested by the AAICP, the new regulations specifically use insurance claims adjusters as an example of an exempt administrative employee:

Insurance claims adjusters generally meet the duties requirements for the administrative exemption, whether they work for an insurance company or other type of company , if their duties include activities such as interviewing insureds, witnesses and physicians; inspecting property damage; reviewing factual information to prepare damage estimates; evaluating and making recommendations regarding coverage of claims; determining liability and total value of a claim; negotiating settlements; and making recommendations regarding litigation.  “

Please read the full article for other important details.

Here is another article from the AFL CIO which specifically addresses insurance adjusters and overtime issues which concurs with the article from AAICP stating in part:

“Insurance claims adjusters—Again, court cases on whether insurance claims employees receive overtime pay have gone both ways—some courts have said they are exempt and other have said they should receive overtime pay. This is a very heavily-litigated field, and corporations have not been able to win a blanket victory. The Bush Administration has handed them that victory by changing the nationwide regulation to specify that these employees are generally disqualified from receiving overtime pay. (New Section 541.203(a)) A quarter of insurance claims adjusters make less than $35,000 a year. “

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In a more recent case involving Farmers, White and Case provides this analysis of an overtime case in multiple states in this February 2007 article on Farmers prevailing in a case on the claim adjuster overtime issues. Here is the link to their article.

*****

 

One of the most excellent articles I could find (here)is  from Holland and Knight in December 2006 which addresses the duties of adjusters who alleged use of computer estimating systems and claim manual among other things took away their individual judgment thus they were entitled to overtime pay. Some important comments in this article include:

 

 

“The Farmers claims adjusters asserted that they were not exempt from the overtime pay requirements because the work that they performed was part of the “production” side of the business, not the “administrative” side. They also argued that because they had to follow claims manuals and guidelines, and use computer programs to determine loss values, they did not exercise sufficient “discretion” and “independent judgment” to fall within the exemption.The trial court found that all of the claims adjusters were doing “administrative” work; that is, that their role was on the administrative side of the business, not the “production” side. In addition, the trial court found that most of the claims adjusters used a sufficient amount of discretion and independent judgment in their work to qualify for the exemption. However, the trial court found that some claims adjusters, such as automobile adjusters and adjusters who mostly handled claims less than $3,000, had to follow so many guidelines and rules that they did not exercise an adequate amount of discretion and independent judgment to meet the exemption”. 

I found this article addressing the size of the claim particularly interesting in light of all of the claim central operations handling smaller losses.

Here is another good article by the Jackson Lewis firm from November 2006 outlining more duties of adjusters and providing more information on the Ninth Circuit ruling that claims adjusters are exempt from overtime pay while noting that CA courts reached opposite conclusions. This brings us to this September 19, 2007 article  here by National Underwriters discussing some recent CALIFORNIA cases where Allstate, State Farm, and Farmers agreed to pay millions on other cases out there. Is this because they are cases in CA subject to other laws or is it because of overtime regulation interpretations prior to the new overtime rules of the Federal Labor Standards Act?

This MSNBC article here from August 2004 explains what changed with the new overtime regulations when they went into force. I’m not an employment attorney so I am not sure of the answer to this question as to why some carriers were settling these cases but it may be due to the regulations in CA differing as an article  addessing several CA cases settled by carriers in Los Angeles Business Journal explains here. 

 Here is an interesting article from October 2006 by CFO.com indicating the 2004 update to the FLSA has increased the confusion on overtime pay and the number of suits filed. Particularly interesting on page 3 of this article is the list of FLSA auditor “red flags” indicating things they look for to see if a firm is in violation of overtime issues such as having all employees on salary versus some time card employees. Adjusting firms should read this article.

The bottom line in all of these articles seems to verify that adjusters are not entitled to overtime pay with the exception of CA (see this 2nd article here from Holland Knight on CA regs opposed to Federal regs) . I’d make sure your adjusting firm is compliant on these issues especially during catastrophe operations when many firms are working employees at the required carrier hours of 7am-7pm 6 or 7 days per week. Check with your employment attorney to verify you have your firm properly classifying your employees and adjusters. There are many new in office programs adjusting firms are participating in such as running call centers, using an increased number of adjusters in claim central operations at carrier catastrophe centers, running additional living expense and contents claim units from their adjusting firm home offices or field catastrophe centers.

Due to the increased number of suits as a result of the new 2004 FLSA decisions as indicated in these articles, it appears wise to get a legal opinion on your overtime decisions BEFORE your firm is subject to such a complaint. Review of this Department of Labor article found here says it best:

 “The status of an insurance claims adjuster, however, does not rely on the “claims adjuster” job title alone.  There must be a case-by-case assessment to determine whether the employee’s duties meet the requirements for exemption. “

In my earlier years as a staff adjuster, we were never paid overtime pay except when moved to “time card” status while attending claim schools as they advised us training status required overtime pay while normal work did not. We were never paid overtime as claim managers in line field units, claim central operations, or while serving as catastrophe claim managers working 7 days per week 12 hours per day. In more recent years when performing temporary catastrophe management duties with independent adjusting firms, they also paid us on salary with no overtime. I can assure you in both staff and independent positions that adjusters normally work far beyond a 40 hour work week to keep up with carrier performance guidelines and Department of Insurance mandated deadlines during catastrophes. This 28 year carrier career was all prior to 2002 with the independent experiences from 2003 to the  present.

 I am curious what adjusters today (after the 2004 changes) are experiencing on these salary, time card, and overtime issues and hope to hear from many of you in reply to this blog. Please list your position, your state of employment, your carrier or adjusting firm, and your method of pay both for regular 40 hours and overtime. Should you not wish to comment in the blog, you can send emails to us and I can post your input anonymously in reply to this blog. We’ll also post this in our  forums at ClaimSmentor for continuing ongoing discussions with our members.


Field Adjuster Safety Concerns- Be Careful ! Remembering Katie Froeschle of Tampa, FL

September 14, 2007

News of  hurricanes always brings to mind the many safety concerns for both new and experienced catastrophe adjusters. There are many precautions adjusters need to take for protection of income due such as serious consideration of independent contracts talked about here, personal protection against lawsuits via proper insurance talked about here when we discussed Errors and Omissions coverage, medical safety for your health such as obtaining the proper shots before entering flood zones, (here is a link to many other health safety concerns by CDC you should read )but nothing compares to the safety concerns for your life by being ever prepared and cognizant of your surroundings when out in the field working losses alone.

This sad reminder in the Tampa, FL news  about a tribute today for insurance adjuster, Katie Froeschle in Tampa, FL reminds us of the horrific events in 2004 when Katie was murdered while inspecting a loss. While I did not know Katie, we do know an adjuster who did work with Katie. He recalls her calling into their carrier office when she could not find the insured’s home and that is the last they heard of her. He says there is NOTHING she could have done differently. The home was tenant occupied. This article from 7/4/07  says Forensic Files  ran a story on Katie this past summer. The details in this article indicate she was beaten over the head with a motorcycle muffler pipe and her partially clothed body was dumped in the Hillsborough river. The tenant was arrested and is serving life in prison. Here are some additional stories I could locate on this horror story here and here providing more details about the arrest and the perpetrator. Katie apparently was an adjuster at Florida Farm Bureau and only 25 years young. A very bright promising upcoming adjuster and individual based on all stories in these accounts.

Carriers have policies for both staff and independent adjuster’s as do adjusting firms in Code of Conduct forms which include company policies on carrying and the use of weapons. Here are a few examples we could locate on the web. The first from Citizens of FL found here on page 36 provision 5.4 states an adjuster may not carry any type of weapon on Citizens property or a Citizens policyholder’s property. Here is another example from one of the Scruggs group evidence exhibits on E.A.Renfroe’s (an independent adjusting firm) code of conduct form on page 4 specifying it applies to “firearms and other weapons” on their property, clients or their customers or while conducting their firms’ business”. Here is one other carrier’s code of conduct form found in some  Worley IDL preparation documents online here which basically says you can’t carry firearms or other weapons on their property or while conducting their business (see page 6 under workplace safety). None of these forms we’ve located online  to share define “other weapons” or expand on what “while conducting their business “means. I’ve seen many independent adjusting firm documents that are similar while some are silent altogether on the issue but the carrier code of conduct form would apply if the adjuster has signed on atleast from the carrier standpoint. This is an important issue I would not think any adjusting firm would be silent on.

Adjusters in the forums are concerned about these weapon requirements when they are sent into some very bad neighborhoods in cities nationwide. One senior adjuster states it best saying “I’d rather be tried by 12 than carried by 6 ” if he had to shoot. Others argue that by a carrier or adjusting firm not allowing them to protect themselves that they are creating an unsafe work environment and they will “shoot first and ask about the code later”. I can’t advise you here but suggest you clear the air on this BEFORE it’s necessary with your firms.

Here is a summary of mentor advice compiled from input of several senior adjusters on ClaimSmentor we hope you will view to help protect yourself from those who have been there:

USE YOUR WITS

Have someone local mark a local map with unsafe neighborhoods so you aren’t in one unexpectedly

If you have a bad area assigned to you, get in and get out early

Find out from local utility firms when is the best time to be in the neighborhood

Ask the insured to have their contractor present for the inspection in bad neighborhoods so you are not out there alone

Suggestions are made you call the insured on your cellphone and let them know you are out front so they come to the front door so you aren’t out in the neighborhood alone

Be aware of your surroundings and the people around you

Don’t enter unsafe neighborhoods with a low tank of gas or any vehicle maintenance issues in the rush of getting your job done and forgetting to stop and take care of transportation safety issues

Don’t put yourself in a corner when so caught up in inspections and measuring that you can’t see what people behind you are doing

Listen to your gut and leave if you are uncomfortable

Never deny a claim while on a roof

Do not deny a claim during a heated argument with an insured in the field

Always have your cellphone accessible- don’t leave it out in your car

Always have your manager’s number programmed into your cellphone as well as the number of an insurance adjuster buddy that you partner up with to exchange daily agendas

Always carry pepper spray, mace, other protection (what would firms say? Ask!)

Hire an assistant to travel with you and to stay on a lookout in bad neighborhoods while you are inspecting

Turn claims in if you just can’t deal with the situation because you find it unsafe

If you have draft authority and it’s a dangerous denial situation- remember- you can stop payment on the payment AFTER you get to safety- do not argue when endangered and report to claim manager immediately (good discussion topic at an induction center if your running a mobile response unit or other facility with payment issuance capability)

Leave an itinerary with a co-worker or manager with atleast claim numbers for appointments for that day so someone knows where to begin to find you if there is a problem

These suggestions are just tips of the iceburg. We hope you will make sure to take the time to read the carrier and adjusting firm code of conduct forms as you need to know their position on all forms of behavior and their weapon policies but your life is of the utmost importance. Clear these issues up before you go out, use your wits and talk to your managers if you are experiencing any safety issues in the field. They will not expect you to work under unsafe conditions.

We hope many more of you will add your comments to this topic to help prevent the loss of life for any more of your fellow adjusters. We wish Katie’s Family the best on their fund raiser today. There is contact information in the news article about this should anyone wish to contribute in Katie’s honor.

Update 9/15/07:

We just learned that Forensic Files is running this story again according to their schedule on 9/22/07 at 6:30 pm ET “Muffled Cries”. Here is a link to their schedule. Roy Cupps, owner of CADO, has posted this link to a 2004 forum discussion on this murder which you can access here. We have notified Tampa10 who ran the fundraiser notice this past week that we have distributed information about the fundraiser to all 735 members of ClaimSmentor via mass distribution email, we have posted this in our forums on ClaimSmentor, on this blog, and a new forum entry on CADO forums here trying to pass on information about the need for safety precautions and about their fundraiser in hopes they will let Katie’s family know they are in the thoughts and prayers of the adjusting community nationwide.


Commitment-Part 2/ Standby Calls / Emergency Adjuster Licenses /Cat Codes

September 12, 2007

We’ve beat the topic to death on the change in the need for independent adjusters. Here’s one additional  article from the Canadian Underwriter quoting AMBest not only on the reduction in the numbers needed but also discussing downsizing. This morning, I had another disturbing call from a Claim manager from a large firm who was just told that his firm in Florida would be closing their Florida operations in the next few months due to the lack of assignments caused by  carrier actions on policy cancellations in FL leading to less potential for future assignments. I am sure we will be receiving many such calls in the months ahead after these non renewals take place as more quality well qualified individuals are “downsized” right out of their staff positions during this major insurance crisis facing our nation.

So what does this have to do with current standby calls as we now hear of tropical depressions 8 and 9 in the gulf and the mid atlantic? Here is the link to today’s post on the storm information. Here is part 1 in this series on the commitment problem in the independent adjusting field so you can view that before this discussion on standby issues.

With these two new storms will come the next round of “standby” calls that adjusters will receive from numerous firms. Adjusters report in our forums over at ClaimSmentor that they receive numerous calls from multiple adjusting firms when there is a potential for landfall or a new storm event such as a hail storm, earthquake, or tornado causing significant damage. These standby calls are made by adjusting firms to both experienced and inexperienced adjusters contrary to many forum posts you read that only the experienced will be called. We’ve completed polls and have talked to many adjusters to confirm this on our site. We actually have many trainee adjusters out on new storm assignments now putting their hard earned training to work as these firms develop new candidates for the future success of their operations as many adjusters reach retirement age. Everyone is usually contacted as they do not know how significant the damage may be and will later prioritize those sent out based on experience once better information becomes known on the actual numbers they need to send on to a carrier.

There are several stages of deployment utilitized in our industry.

First, the carriers have major national catastrophe departments who monitor these systems and weather events. You will constantly see news announcements about adjusters on standby for the carriers. Here are just a few of the many examples here from Boat US on their cat team and an old announcement from Travelers on deployment of their catastrophe team and resources. How about this recent Chubb Insurance announcement for the option to deploy emergency water and restoration firms to handle claims instead of adjusters? We have put an entire comprehensive list together on ClaimSmentor of all carriers catastrophe teams we have located through their websites and news releases for adjusters interested in staff employment for catastrophe work.

Carrier catastrophe departments differ on the way they decide whether or not to activate this department. Some carriers deploy these teams only if requested by a region’s executive department once a threshold such as 1,000 claims with the same date of loss are reached while others use catastrophe teams no matter what the work load is. Some carriers prefer to send in staff adjusters into a damage zone or utilize independent adjusters to assist their local operations as branch assist adjusters. I regularly see press releases from Farmers Insurance on small storms announcing the arrival of their storm teams and drive in operations which is quite impressive! The new developments with many carriers the past few years include the claim central operations and only limited assignments to field independent adjusters for building estimates while they handle additional living expense claims and contents claim inventories. Remember just because ISO declares a cat code that the carrier may or may not declare a cat and issue a cat code of their own depending on their own company statistics on loss damage. The carriers have increased their national catastrophe teams in the aftermath of Katrina so currently there must be huge numbers of losses before activating a large number of independents. These very decisions are going on in carrier offices nationwide at this very moment with the soon to be Ingrid looking like it may develop into a strong storm.

We also have ISO and the Property Claims Services offices setting designated Catastrophe Codes for insurers once a catastrophe event  has been designated.  Here is a recent report on catastrophe 17 and 18 from their services. You will also find these articles  here, here, and here on what is involved in setting a national catastrophe code which PCS defines as “an event that causes 25 million or more in direct insured losses to property “. The third link above gives information on the types of property it maintains the stats on for many insurers.

Insurance Departments also determine when a storm has been assigned as a designated catastrophe allowing adjusters to work in their state under emergency adjusters licenses as these links from TX, FL, and LA insurance departments show. Normally, emergency adjuster licenses are good for one storm or one hurricane event but here is an example from 2004 where the Fl Dept of Insurance allowed adjusters to use the one emergency license to work for all 4 named storms. Note that FL has new rules for emergency adjusters as of 2006 and LA has a new license law for adjusters in 2007. Pre- storm season is the time most adjusters make the decisions if they will apply for non resident licenses or work strictly off of the state emergency licensing procedures. There are pros and cons to both schools of thought we’ll discuss in another blog. Basically, some don’t mind complying with continuing education requirements to maintain the licenses for a non resident and like the fact they do not have to pay new emergency license fees for each new storm assignment. Having a non resident license also allows you to work all types of assignments in the state if you have the proper license while an emergency license limits you to work the designated catastrophes only. Many adjusters are not even aware that some states allow you only to work under an emergency license for the one adjusting firm you are appointed for and require a new license as you change firms. I haven’t quite figured out how adjusters are doing claims when they are working for multiple adjusting firms although appointed by one firm (self appointment applies to permanent resident and non resident licenses in FL not emergency licenses). Emergency adjuster licenses also are normally limited to a very short period of time such as 90-180 days and adjusters don’t enjoy the hassle in the midst of trying to work claims to complete paper work required to get extensions on their emergency licenses.

When carriers conclude their analysis of potential landfall, the number of policies in force in a given area, and the potential number of claims they expect, they will put the adjusting firms on standby. There is no guarantee they will actually be activated and the number of adjusters they expect to need from the independent firms is strictly a “guess-timate” as to what they will need. We posted a link in Part 1 of this series to the article  where the reporter followed Crawford and Company and reported about this that we highly recommend you read.

The adjusting firms will often call upon adjusters even before they receive the first call from the carrier knowing they have contracts lined up with them should a major storm require their services. Adjusting firms tell us at this point they start looking at their core group of dedicated adjusters and check for licensing history as it may make a difference in their selection depending on licensing options. If it is not a declared official catastrophe by the state, they may need folks with the resident and non resident license. If a cat has been declared, they can use other adjusters under emergency licensing guidelines such as the ones linked to above. Some firms “jump the gun” and pull the standby trigger too early afraid folks on their rosters will sign on board with another firm while others wait for more assurance on assignment numbers. It is a very tough call and balance to maintain to know exactly when is the right time to make those standby calls. An interesting discussion with a new adjuster last week reminds me that those of us who have been in the business for a while take it for granted that everyone understands these terms when this new adjuster told me they didn’t realize that a standby call was storm specific and they thought they were still on standby long after storm assignments had been made.

Adjusting firms consider standby to mean they do expect to activate and send you out based on preliminary assessments they have initially been given from the carriers and their own research and evaluation of the damage potential. The purpose of the standby call is only to check for availability. They do expect you to give them either a yes or no decision. Therein lies the problem. Should you say yes or should you say no to a particular firm? Should you “fee schedule shop” or just be direct and tell them “no”. Should you say “yes” even though you don’t know? What are the consequences as far as your roster placement in the future with a particular firm depending on the answer you give them when the standby call comes in?

The reality is that it is a very tough decision for adjusters to make. It is much easier if an adjuster has a history with an independent adjusting firm and knows their reputation for prompt payments, they’ve viewed the independent contract and agree to the terms, and they have deployed with them before and know they make good calls rather than “calling wolf” and activating too many adjusters once too many times without concern for the need to send them back home by over staffing. The problems come in when those “A” firms haven’t called them and they are considering acceptance of assignments from other firms. Many adjusters indicate that they will tell all of the firms “yes I’ll be on standby”.. “please fax me over your fee schedule” and they take in as many fee schedules as they can during this standby period to make their decision and end up going out with the firm who actually “activates” them with the highest fee schedule. Most concerning is the fact they do not call back the other vendors they gave a “yes” to on the standby calls to let them know they will no longer be available. The 2nd group of adjusters is at the opposite end of the spectrum and will say “yes” to one and let others calling know they have already accepted a standby call and will call them back should they later find out that firm A isn’t going to need their services. We’ve found a third response used by some adjusters to be the straddle the fence response such as “thank you for calling, let me see if I can clear my calendar and call you back within 24 hours” while they take a wait and see attitude on what other calls may come their way. Anything other than a “yes” and you are taking the risk of missing an opportunity for work if “A” doesn’t activate you. You know that and they know that. It’s a very difficult call.

The questions come often from new adjusters “how long should I wait for them to call me back to actually activate me” and “what if another firm calls me with a higher fee schedule….what should I tell the first firm I said “yes” to”? What about the issue that an adjuster may have said yes to a firm only to receive their contract by fax and determine they are not willing to agree to those terms?

Adjusters need to understand what happens once they’ve agreed to be placed on standby. The adjusting firms submit the names of their standby adjusters to the carrier in preparation for receipt of files. It is not uncommon for carriers or adjusting firms to begin using those names to assign files the moment claims begin coming in. Ever wonder why you are being told by an insured you are the 3rd adjuster name they’ve been given on their file yet you see not one prior log entry showing the file was reassigned to you? Many times it is because of this very reason known as “no show” adjusters. (There are many other reasons this could happen during zoning assignments when a carrier finds out that too many claims have come in to an adjuster assigned to a particular territory and move the claims to even the workload for prompt claim handling and this is all going on while your traveling to the site or in induction center meetings before you have even seen the files). I was astounded to find out from many adjusting firm managers how high the percentage is on “no shows”. One firm provided the history of 800 employees on a roster and the inability to activate 200 of them as the majority had accepted other assignments during Katrina.

Standby is not a guarantee or an activation of your services. It is an “are you available” call when handled properly. In the past, there were no fees offered for you to “standby” waiting for the activation call. However, during Katrina and other peak events, some carriers will offer a “standby” fee usually stated as a given flat rate per day while you are waiting to be activated. This gives the carrier some assurance they can actually count on those independent adjusters the firms have called upon while reimbursing them for possible lost income had they accepted another assignment while they standby for this carrier. During 05, our firm received several staffing requests that included these offers. One carrier’s standby fee was as high as $5,000. I would not count on potential standby fees as a sole factor in assignment consideration. First, there are very few of these slots open and they are quickly taken. Second, they are usually tied in to production factors such as ” if you conclude X number of files within 30 days” yet you have no control over the many delays in getting closed files through the approval chain. Third, we’ve seen many tied into the criteria that the standby fee only applies “until you get assignments” and we’ve heard many stories of adjusters handed files at 5pm on the 1st day after induction classes all day who are told the standby pay did not apply since they did get files day 1 much to their disappointment when they still had atleast 2 more travel days to get to their assigned claim territory and locate housing. Consider yourself very fortunate indeed if you have been the recipient of a standby fee. This was unheard of years ago but goes back to the supply and demand issues carriers know they face when the “big one” hits like Katrina. When resources become limited , they are willing to make concessions such as standby fees and increased fee schedules they previously never considered but you should not wait for such tempting offers under normal catastrophe conditions. Right now, there are literally thousands of experienced adjusters waiting on work and it looks very doubtful you should expect to see such offers this season.

It is important to consider many other factors other than just fee schedules and fee splits when determining your vendors of choice. How much support will the firm offer in the field when you have questions? Have they staffed up their support and accounting operations for a major catastrophe so invoices are promptly billed and followed up on? Do they have the required management experience levels to help you out on some of the tough coverage decision calls? Will management respond to your phone calls when needed? Are there enough managers to promptly process your closings so your files are timely invoiced? Does the adjusting firm have a fair contract? Does the adjusting firm pay you before or after the carrier pays? What kind of reputation do they have with other adjusters? Does the adjusting firm have good induction center material providing you with the carrier guidelines so your files are not rejected? Are you familiar with the carrier file requirements they plan to deploy you to and are you willing to handle your files accordingly? Does the assignment require electronic claim file submission so you can more promptly conclude your assignments or is the carrier going to require unnecessary trips back and forth daily to pick up and drop off new and closed  paper file assignments? I would rather work for a lower fee schedule or fee split for a good organized firm I can count on any day as an adjuster as would most good quality experienced adjusters.

 The next stage is “activation” or “deployment” where you are expected at a given catastrophe induction center meeting or assignment within a very short time frame. Those calls go out to the adjusters who have given a solid “yes” to the initial standby availability calls. It’s interesting to read the stories that many firms are even using automated voice mail systems to notify adjusters of standby needs such as this news article by Brush Claims and using online data systems to receive the standby confirmations from adjusters rather than relying on the telephone calls we were used to. Here’s another firm’s announcement from 2006, Mariposaltd,  about a similar service. I’d like to think these automated services also go back and notify those who did accept standby when to stand down if their services are not needed.

I’ve had several adjusters even pass on information that they have gotten follow up calls AFTER THE STORM from adjusting firm managers wanting the status on files electronically assigned to them when they didn’t even accept an assignment from the firm or know they’d been assigned files so you have to be very careful about who you give a “standby yes” to which assures you understand  each other on exactly what that firm expects of you if you told them you’d go on standby. Apparently, some vendors consider this a definite while many adjusters do not.

When the activation calls do go out, the adjusting firms are normally given a very restrictive period of time  for adjusters to report for assignment as induction center meetings are normally required and the dates preset. Now is not the time to be going on vacation or asking an adjusting firm for an “exception” to a reporting time frame as they have committed you to report within this given window of time. There can be serious damage done to the reputation of an adjusting firm by not delivering the service level of adjusters they promised the carrier they can produce. Citizens of FL imposes a $1,000 fine per adjuster not reporting within their stated deadline. You need to watch these contracts you are signing since many only state fines assessed to the adjusting firm will be passed on to the adjuster. If you have signed a contract and agreed to go on standby and “no show”, watch for further contact about these fines. I would think some of these new terms in contracts is to try to stop this very problem of adjusters accepting assignments and failing to show up when they reported to a different adjusting firm.

There are alot of resources at the carrier level and the adjusting firm level involved in assigning  adjuster HR records,  matching adjusters to claim managers and reinspectors, territories, and file assignments. All of that work must be processed again as well as involving many other support folks to reassign files and locate replacement adjusters. It also puts the carrier in a bad light when an insured is told their file is constantly changing hands yet they have not heard from anyone not to mention the “heat” the adjuster who does call is going to get when calling an insured. You cannot blame an insured from being utterly frustrated by constant reassignments without the first inspection.

I don’t have any question about the ethics an adjuster should have when accepting assignments or agreeing to placement on standby whether for assignments they agree to with my staffing firm or with adjusting firms. Someone accepting an assignment and not showing up would be removed from our firm rosters as well as other adjusting firm rosters. I’ve had this come up several times while filling staffing requests on daily assignments with a firm “no” to a candidate that looks promising when the adjusting firm recognizes the candidate and recalls a “no show” situation.  Everyone understands the inability to commit due to all of the unknowns and in the majority of cases I do not think most adjusting firms would harbor any ill will if you give them an honest ” I’ve accepted another assignment, please consider me for your next opportunity” unless you’ve been known as one of their core adjusters who is regularly activated for assignments. Is what they do mind is counting on you when you’ve told them you are available then you not reporting for storm duty.

Tom Rongstad, a moderator on ClaimSmentor, made this comment in an ongoing topic about commitment which I think is very good advice saying :

An adjuster just entering this profession, whether it be a staffer or stormer, can have all the education and training certificates available from all the companies and possess the knowledge to operate several estimating programs having incurred the costs to do so. However, that person still does not have a reputation. That is one thing that can not be purchased. It comes with many years of commitment and hard work. Once you have it, you will not be the one turned around when the claims anticipated by the company do not materialize”

*******


While we can’t give you a simple answer on the standby ethics….only YOU can decide what kind of reputation you want to have in this industry.I’d give that some very strong consideration when formulating your plan of action BEFORE standby calls for TD 8 and 9 come in. Actions speak louder than words. Remember, the decisions you make when the calls come in will be decisions you must live with that will bolster or harm your reputation for years to come. The time for doing research on a firm was before you applied not after you get the calls from firms you sent resumes to.
 You should be in a position to make the decision on who your “A” firms are now- not next week when the calls start to roll.  Make a list and organize it into your “priority” firms just as adjusting firms decide who their “core” adjusters are they will call out first. This will help you have a clear head and a logical thought process when the time comes.  I had the opportunity to work with a fairly new adjuster during the midwest flooding as she sorted through 6 deployment offers from various firms. It was easy to prioritize them when she asked herself some of the many questions listed above in addition to reviewing proposed fee schedules. I’m very glad to recently learn she is happy with the decision made for the midwest assignments.We hope the strong majority of ethical independent adjusters will help preserve our industry by doing the right thing in representing the staffing firms, adjusting firms, and carriers they serve by handling these standby calls professionally knowing the big picture and how your decisions effect all catastrophe operations.

We wish everyone a safe trip should you deploy for one of these events. We invite all adjusters or claim managers to join us in the ClaimSmentor forums for ongoing discussions on these very topics. 


Tropical Depressions 8 and 9- Humberto and Ingrid? / Standby Discussion -Commitment Discussion Continued

September 12, 2007

Today Tropical Depressions 8 and 9 have been announced. The next two named storms will be Humberto and Ingrid according to reports from the hurricane weather service. All reports are indicating they will be Tropical Storms in the next few hours.

Here are updated reports on the depression off the Texas coast from the Galveston weather news service and the Houston Chronicle. The Houston article indicates this tropical storm could bring up to 10 inches of additional rain on top of the 2 inches already experienced this morning. The Miami Herald provides a good update on the two storms here. Fox weather news today on tv reports indicates that while there is a “code of uncertainty” as to where the depression in the Mid Atlantic will go that there is a possibility of strengthening even to a major storm status within the next five days. Reports are also indicating on the Galveston link above that tropical storm warnings are placed from Port O’Connor,TX to Cameron, LA.

Here are a few of the other links I like to regularly check that provide other information. Ralph’s site has the best graphics showing in addition to these two depressions that 2 others are being watched. Here is the Caribbean 360 link that shows a good projected path on the Mid Atlantic storm. The National Hurricane center reports on both storms is here.

I’ll post this now while working in the background on the standby information so check back this afternoon for the continuing discussion on standby, ethics and commitments many new adjusters are interested in as they face decisions in the coming weeks about which firms to go with and they have many questions about what to tell firms calling them for standby.


The Big “C”- Commitment problems with Independent adjuster relationships, advice by Guest Blogger, Rocke Baker

September 10, 2007

The recent wave of storms such as the hailstorm in CO and the midwest flooding has brought on a flurry of new discussions in our adjuster forums about the lack of commitment in the independent firm/ independent adjuster/carrier relationships.

We had previously discussed the reasons for the problem of commitment in this blog titled “Are Adjusters Fungible Units…Are Independent Adjusters a Dying Breed ” here.

Just one example of the problem pointed out recently is an adjuster  “Bill”  activated to go out on assignment to Colorado for the recent hailstorm by a major adjusting firm. To work, the adjuster needed to activate his Xactimate subscription for an active key code. He indicates activating the subscription and other expenses incurred within the first hours of being activated cost him in the neighborhood of $430.00 before he ever left home. Three hours later, with RV hooked up, work equipment packed and loaded, truck fueled and ready for departure, the adjuster was told the adjusting firm had “made an administrative error” and they cancelled his assignment ( what a waste of his time- hooking up RV, gas expenses incurred, packing, and activation of the Xactimate subscription). The adjuster tried to get the adjusting firm to reimburse him atleast the cost of the Xactimate  subscription they told him he was required to activate to no avail although he could not get a refund from Xactware on the expense as of our last update. No apology…no refund…the adjuster had to just eat the expense for an estimatic system he did not need until assignments are received. There was no misunderstanding that this was a “standby” call, the firm had been clear he was activated and was to report for duty. This adjuster and wife worked storms for a major adjusting firm during Katrina and knew the ropes, they were not trainees. Knowing this couple, I also know they incurred over $10,000 in seminar and conference training expenses in 06/07 attending seminars AFTER Katrina duty to improve their adjusting skills for the…next big one. Needless to say, this couple is more than frustrated with the current deployment situation and lack of dedication to adjusters servicing claims for the adjusting firms and carriers.

This reminds me of another storm years ago where another catastrophe adjusting couple were working out in CA doing clean up duty on daily rate (both working managers). Their adjusting firm asked them to relocate to the east coast for a new storm. They moved their RV and equipment cross country to a tune of thousands in relocation expenses to go cross country, set up at a new RV park, and to get utilities and phone service situated for long term assignments in the NY area. They got 12 claims and were sent home when the adjusting firm didn’t get the expected number of assignments and did not get back their daily rate assignment back in CA since they’d been replaced once they accepted the new storm assignment (with the same vendor).

We received feedback on the situation from several experienced adjusters. Rocke Baker agreed to provide advice for adjusters for this blog and provides this commentary and advice:

Subject: Storm Business by Rocke Baker

Most of us old timers have at one time or more been called up, began the trip or even made it to the site only to be told the work is not there or we called too many. Hard feelings yes but that is the nature of this beast. Will firms reimburse you for expenses when it was their mistake? Sometimes, depending on the firm and the carrier. Many will not. I have been lucky that the one time I was called out and was not needed, at least they paid a per diem for 5 days while we waited. Other IA firms did not fight for the per diem and those folks got nothing. 

If you have less than 4 years in this business it is extremely tough. There are probably 20,000 adjusters (Just look at Texas DOI. There are over 40,000 adjuster licenses issued out of that state) that have less than 4 years along with those with 5 years or more all fighting for the same piece of the pie. Cat adjusting is like being in the union. Seniority, time in the job and have you worked for them in the past means a whole lot more that classes taken, certificates and the like. If you did a commendable job in any of the ’04-’05 storms, you have a chance of being called up. If you have never worked a storm or have never worked a claim the chance of being called up is slim.

Companies ramped up their cat crews in early ’06 in anticipation of a heavy year. Nothing happened. They will work those people heavy before any of us are called by them. This year is not the year for cat adjusting so far. It has been pocket storms and not many people have been called. I passed up one gig for about 50 – 60 files as one carrier called and said that they would have about 20 – 30 for me at home. Since this carrier had kept us eating at the end of last year and gave us files as overload this year, we declined the out of town run to be loyal to the carrier. Well, that did not pan out. Got 16 and 5 of those had already been inspected by staff, 2 withdrew their claims and the other will not call back or respond to letters out of the first 8 they gave me. And nothing else has come in. That is how this game is played. You have to have other plans of action to make a living until the major hail storms (50k homes hit) or a class 3 or above hurricane hits a major city.

It has been said in Claims Mentor & CADO by experienced adjusters, you have to have something to fall back on during slow times. If you sit back and wait for that call up, it may be a very long wait. This is very true since 2006 and through right now as I am writing this. 

Being a cat adjuster is like being a gambler. You buy your tickets and take your chances. The reason that my wife and I got into this was not to get rich. We had been staff for more years than we want to think of. We got out because we were tired of the everyday grind. We wanted to work a few months, make money to live on and hope to put a little away. Well, we are working like plow horses doing day claims to stay slightly ahead of the game. It feels like we are on cat. These files do not pay the greatest but we are fortunate enough to have them. I’m writing this while taking a break. 

So many people have been trapped by these “adjuster schools”, being told you have to take this or that to get on a vendor list etc, it is sad. All this has done is make money for firms and have taken money from the folks who can least afford it. As was said in CADO a few days ago, it seems like some of the vendors call up a few under 4 year adjusters for a storm. Maybe they think that if they give them a few files and make some money, they will take more and more “training” classes. More money for the “training” division of that vendor.

Remember, keep the forum comments constructive be it critical or complimentary. Companies read these comments as well and remember who is saying what and when. 

Rocke Baker  305-781-1691, Rocke Baker is a long term adjuster. He had worked for years as a staff adjuster and currently serves the claims industry in the capacity of daily and catastrophe loss adjusting.

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Let’s take a look at this from the adjusting firm standpoint. What do they have to say? This excellent article discusses the challenges, resources, and investments in activating adjusters from the independent adjusting firm standpoint when reporter Mathew Brodsky interviewed Crawford and Company on activations during 2005. It reflects the expenses adjusting firms also face which often leads to disappointments for them as well as the adjusters they deployed. There are also interesting comments in this article about the former “Indiana-Jones type senior adjuster versus training new adjusters in today’s environment. While the article is long, it is worth the time to read. You can see from this article, the independent adjusting firms receive a request for a given number of adjusters which may not pan out once the carrier’s determine the actual number of claims versus the projected number of loss assignments and face the same cancellations of their requested services.

Watch for tomorrow’s blog with an explanation on these commonly used terms such as standby, deployment, activation and a good discussion on adjuster ethics on handling the many standby calls received once there is potential for landfall due to hurricanes or sudden damage from hailstorms, tornados, and other weather events triggering the need for independents.


Hurricane Felix-Category 5- Info about working claims in the Honduras

September 3, 2007

We had discussed the need for claims adjusters to be flexible in accepting assignments in our “Who Moved my Claims Cheese Blog” and our blog on  “Are  Independent adjusters Fungible Billing Units” due to the ever changing work environment in the insurance claims industry. If adjusters aren’t being flexible in considering new assignments, they are going without work in 06 and 07.

Adjusters are presently considering such options as working in Mexico for Hurricane Dean and now with Hurricane Felix as a Category 5, there will be others considering working in the Honduras and other Central American locations with damages. We previously supplied information on working in Mexico in this blog and had our blog on Billingual translation services here. Below is information needed to consider working in Honduras is provided. It is very interesting exploring some of these rare opportunities to work overseas as adjusters consider doing so due to the lack of claim assignments in the US.  

Here is the latest 8 am report on the projected path of Hurricane Felix- now a Category 5 heading towards the Honduras. I’ve also included many facts and figures an adjuster would need to know before agreeing to accept assignments from an adjusting firm to work claims.

http://www.foxnews.com/wires/2007Sep03/0,4670,TropicalWeather,00.html

Honduras has a population of approximately 6.8 million people. Reports linked to below indicates that about 2/3rds of the population there lives in poverty. Please be sure to read the safety warnings for women and others working there as well as the health and safety warnings on water and other food issues linked to below. The last major hurricane in Honduras in 1998, Hurricane Mitch, caused 11,000 deaths and damaged major roads, bridges, and infrastructure as show in this report:

http://www.utexas.edu/opa/news/00newsreleases/nr_200005/nr_mapping000503.html

Here is another report on the damages caused by Hurricane Mitch in 98 with different damage figures showing less deaths, more injuries, and states almost 1/4th of the population suffered damage (1.5 million damaged of 6 million or so in population):

http://www.iadb.org/regions/re2/consultative_group/backgrounder2.htm

Here is also a Honduras blog that shows some flooding there after Dean which will be interesting to watch after Felix goes through to see reports of damage:

http://lagringasblogicito.blogspot.com/2007/08/hurricane-dean-damagenot.html

9/3/07: Hurricane Felix approaching Honduras:

http://www.wunderground.com/tropical/at200706.public.html

Info on working in Honduras:

Honduras Facts-Population,Language,etc-Population 6.8 million people

http://www.internationalliving.com/honduras/fact_file.html

US State Dept-Honduras Info:

http://www.state.gov/r/pa/ei/bgn/1922.htm

US Embassy in Honduras:

http://honduras.usembassy.gov/english/index_e1.htm

Security warnings for travel in Honduras from US Embassy:

http://honduras.usembassy.gov/english/mission/sections/RSO/index.htm

US Services through Honduras US Embassy:

http://honduras.usembassy.gov/english/mission/sections/con_cit_serv.htm

US Passport info from Honduras:

http://honduras.usembassy.gov/english/mission/sections/con_pass_eng.htm

Travel Document System-US-Honduras relationships and info:

http://www.traveldocs.com/hn/foreign.htm

Minimum wage and Welfare of Workers in Honduras:

http://ftp.iza.org/dp2892.pdf

Info on filing US taxes on info there:

http://honduras.usembassy.gov/english/mission/sections/con_11.htm

Honduras this Week News link:

http://www.marrder.com/htw/

Emergency Financial Services to an American overseas:

http://honduras.usembassy.gov/english/mission/sections/con_08.htm

Two Insurance Law firms in Honduras:

http://www.hierosgamos.org/hg/db_lawfirms.asp?action=page&pcomp=14046&page=1&country=Honduras&SubCategory=Insurance

http://www.hierosgamos.org/hg/db_lawfirms.asp?action=page&pcomp=38394&page=1&country=Honduras&SubCategory=Insurance

Warning to US Buyers about buying real estate in Honduras:

http://honduras.usembassy.gov/english/mission/sections/eco_real_state.htm

MIT Flood Safe Project in Honduras:

http://web.mit.edu/lem/honduras/

Maps of Honduras:

http://hondurastips.honduras.com/index.htm

The People of Honduras:

http://hondurastips.honduras.com/index.htm

Best Airfares to Honduras:

http://sidewalkmystic.com/bestairfare.htm

Honduras currency and discussion on use of ATM’s there:

http://sidewalkmystic.com/honduras_vacation_tips_2.htm

Renting a car/ Car insurance in Honduras:

http://sidewalkmystic.com/Driving.htm

Food/Water/Airlines within Honduras/ Hotels in Honduras:

http://sidewalkmystic.com/honduras_vacation_tips_suggestions_1_travelogue.htm

More Hotel info on islands there:

http://www.tropicalrez.com/

Honduras Bay Island Hotel info:

http://www.roatan.com/catalog/honduras/hframeset.htm

Safety advice for women traveling in Honduras/medical treatment/gang violence

http://sidewalkmystic.com/honduras_vacation_tips_3.htm

2007 Crime and Safety report in the Honduras:

https://www.osac.gov/Reports/report.cfm?contentID=63539

Visas and Shots recommended for going to Honduras:

http://www.internationalliving.com/honduras/visas.html

High Speed Internet Services in Honduras:

http://www.netsys.hn/

Internet and phone service in Honduras:

http://www.aboututila.com/Directory/Listings/Tropico.htm

Info on Cellphone coverage in Honduras:

http://www.howardforums.com/archive/topic/727432-1.html

More info on the GSM 850 MHz phones:

http://www.thetravelinsider.info/roadwarriorcontent/quadbandphones.htm

Here’s an updated report from 9/4/07 5am. Reports on many weather stations say it may regain Cat 5 status just prior to landfall:

http://www.cnn.com/2007/WORLD/weather/09/04/storm.felix/


Have you thanked your adjusters as we enter Labor day weekend?

August 30, 2007

As we enter labor day weekend the next 3 days, we hope that many catastrophe adjusters share time with their families and friends with what may be the last of long weekends for sometime should hurricane season activity actually pick up in September. Here is one of the latest pictures from our new favorite weather site, Ralph’s Tropical Weather,  showing atleast 5 new lows being investigated as we speak!

This week we’ve learned of friends deployed to Midwest flooding, CO storms, and other locations finally getting assignments after the very slow storm season for 2006 for many independent adjusters so they will be unable to share the holiday with their families. We hope the insurance consumers will come to appreciate the many sacrifices adjusters do make to choose the life of a catastrophe adjuster.

How interesting to read here  that the 12 hour/7 days a week American work schedule as we entered the Industrial revolution lead to unions to help the deplorable conditions American employees suffered in the late 1800′s ! Did someone forget to share that with insurers who still require those very hours today for storm adjusters?

Today is a great day for carriers and adjusting firms to take a moment out to thank adjusters who service their claims before labor day weekend begins. We used to recognize adjusters committing to work disasters with storm banquets to thank them for their service as they rotated in and out of assignments back to their regular offices every 30 days. That practice today has basically become extinct now that carriers have dedicated catastrophe operations initially created so an insured would not have to deal with an ever changing group of adjusters for consistent handling of their claim. That was a great concept in it’s time and still is but the beauty of the program is eroded over the past few years due to the current practice of in office claim central units requiring insureds again  to deal with “team” adjusters  who are not familiar with their file. It  also became unpopular for banquet facilities to post signs with a carrier name for such gala events and even for conferences due to a large number of consumer complaints on carriers wasting “premium dollars” on such wasteful spending. Other issues arose regarding the serving of liquor or hosting cash bars as well as sexual harassment issues for jokes in today’s ever increasing world of litigation. It still amazes me today the number of insureds that will call in to a carrier office to complain of adjusters taking a long lunch or telling jokes in a restaurant “when they should be out handling my claim”. Listen folks, adjusters are human also and field adjusters commonly work 15-18 hours 7 days a week. They return from 10-12 hours in the field to their rooms at night to enter claim estimates to meet stringent carrier quotas on inspected and closed files due each and every day while out on assignment. They need a break and they need recognition for their hard work. It’s fighting an uphill battle to even mention things like this with the negative impression of “adjusters” out there. New adjusters need to be most careful in following carrier guidelines not to wear storm clothing after hours and to always be cognizant of the public when out in groups for dinner. You can be over heard discussing private cases and this is not a very good thing in the eyes of the public. Instructions from most carriers require you wear “civilian” clothing when going out to dinner on your way back to your room to work files.

Hmmmm……..I guess we don’t learn from history very well in the claims industry. Our work hours meet time frames from the 1800′s and we have totally done a major turnaround in the current “claim central” operations circumventing the very reason we created catastrophe claim field operations to begin with. An in office adjuster who has never experienced the trenches of disaster does not share the same empathy as they have no understanding of the trauma experienced by insureds during a storm. They have never walked up to a home that looks reasonably repairable from the street only to walk to the back of the structure and see it torn in half. Nor have they marched down the street with a ladder in 100 degree heat to measure roofs when you’ve been dropped off  from a carrier bus on a street corner during an “Andrew”. I have managed in office adjusters, field adjusters, and catastrophe adjusters and there is a major difference in the understanding of urgency and the empathy of these different groups of adjusters if they have never worked in the field on a catastrophe operation- especially during the initial phases of cat operations.

I hope we will all take a few minutes to thank our adjusters in some form or fashion over labor day weekend.

We at Dimechimes Corporation thank the many dedicated adjusters servicing the property insurance industry! We look forward to working with members of our rosters as new staffing requests are received this season. Please be safe on your way to your new assignments.

We’ll see you back on the blog next Tuesday!


Billingual Adjusters in Big Demand! Please update your resume if applicable! Translation services for others listed

August 17, 2007

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Billingual Adjusters in Big Demand

While I haven’t had time for a blog entry today, I wanted to remind adjusters that their Billingual skills are very important to carrier and adjusting firms. We have approximately 100 adjusters who have commented on it on their resume.

If you have billingual skills and that is not on your resume, please resend your resume asap to Debbie@Dimechimes.com and put Billingual in the subject field with your last name and state then make sure your resume includes your billingual information. Please make sure you have read our blog entry on adjusters resumes here before submitting information required for consideration.

You’d be amazed at how much that can increase your odds of deploying in some territories not only with our firm but with adjusting firms and carriers.We received a staffing request in 2005 that requested we deploy all licensed adjusters whether experienced or not that were billingual. The inexperienced were used in the adjusting firm and carriers offices as interpreters.

Should you not have billingual skills, you might find some of these services helpful if your adjusting firm does not have services available when communicating with an insured that does not speak English .Many experienced adjusters also advise they will hire local temps to travel with them to appointments to act as interpreters. Trainee adjusters- this may be the perfect opportunity for you to train with an experienced field adjuster by offering your billingual translation services as you ride along with them for training.

http://babelfish.altavista.com/

Translate text to spanish /other languages

Translate entire web page to other languages

*This was most interesting- try entering a web address in and watch it turn the site into another language!

Adjusting firms can add a link to Babel Fish that a customer can click on to interpret their website in many languages

http://www.wordreference.com/es/translation.asp?tranword=transfer+desk

English to Spanish translation dictionary

http://www.courtreportersnet.com/transcription.html

To transcribe a recorded statement spanish/english/others

http://www.cbsnews.com/stories/2006/10/18/tech/main2100781.shtml

Dial an Interpreter Service through AT and T

*I’ve used this before on claims

http://www.claimspages.com/documents/

Claimspages.com has many commonly used forms  and pattern letters in Spanish

http://www.languageline.com/page/welcome/

If you look on the Products and Services tab- this can be used by individuals who have infrequent needs (listed as personal service) and also another plan for businesses such as independent adjusting firms under the business plan.

We’ll add others next week. We hope everyone has a great weekend! See you Monday!

Please add comments in reply if you have other advice or contacts for billingual services to share..thanks!


Crisis Intervention while Catastrophe Adjusting by guest blogger Steve Ebner

August 16, 2007

We welcome our first guest blogger, Steve Ebner, to our Dimechimes Corporation Adjuster Information Blog. Steve and I share a common background in both staff, independent, and catastrophe adjusting. Steve is also a valued member of ClaimSmentor and CADO.

Steve Ebner has a Master of Divinity degree and is a former United Methodist minister and chaplain at Methodist hospital in Philadelphia.  His second career as a claim adjuster began in 1990, when a claim superintendent at State Farm had the foresight to realize that someone with training in crisis counseling may have skills that would be valuable in claim adjusting.  Steve has been an independent catadjuster since 1998.  He has worked large and small commercial, homeowners, mobile home, and occasional auto claims.  He has worked both the property and casualty claims.  His home base is near Scranton, PA.

Here is Steve’s outstanding blog entry contribution on Catastrophe Adjusting and Crisis Intervention. We felt this article was timely with the peak of hurricane season approaching and the difficulties adjusters face personally as well as while dealing with insureds suffering many personal tragedies caused by storm damage:

Cat Adjusting and Crisis Intervention by Steve Ebner (Medulus@aol.com)  

As cat adjusters we fill a certain niche in the insurance industry in that we are often called to serve those who have experienced some level of crisis.  While this is in some measure true of any adjuster, it may be more intense and widespread during a cat event.

We are not counselors, nor should we attempt to be.  However, it would be helpful for us to have some understanding of crisis intervention to inform our claim handling.  This will only serve to help us settle claims more fairly and finally, and to add another dimension to our ultimate goal of indemnification – returning the insured to a position of wholeness.  More often than we realize, the policyholders we encounter expect us to be agents to assist them in recovering from the crisis they have experienced.  A savvy adjuster will look beyond the surface and see some of the factors that make settlement of claims more difficult in a crisis situation.  Further, they will attempt to address those factors and concerns to the extent it is appropriate for us to do so.  I would like to try to address the concepts of crisis intervention in a somewhat simplistic manner, and relate these concepts to catadjusting.  In this article I will only be scratching the surface.

Let me explain some of the emotional/psychological scenarios we could face by way of an example from my own life.  I was living in Santa Monica, CA, when the Northridge Earthquake struck.  Santa Monica, because it is near the ocean and built on sandy soil, experienced liquefaction more than any other city located more than ten miles from the epicenter.  At about four o’clock in the morning of Martin Luther King Day 1994, my ten year old daughter shook me awake and said, “Dad! Hurry! Get in the doorway!  It’s an earthquake!”  I woke to see my two children and the two children who were staying overnight huddling in the doorway.  The house continued to shake for another very long minute.  The electricity was out.  When the shaking stopped I went into my bedroom. My floor to ceiling bookshelves were all tipped over.  Every one of my over four hundred books was on the floor in a jumble we had to crawl over.  I then tried to put the children back to bed.  But every couple minutes the earth shook again – over and over and over.  No one was going to get any more sleep that morning in the apartment.  About an hour later the panicked mother of the two visiting children arrived to pick them up.  She had been unable to open her garage to get her car out.  There were no phones or electricity working.  Then my children and I went out to the car to sleep because it seemed the safest place to be. 

My workplace had all the windows broken out.  The building was off limits for some time.  There was a curfew in affect the first night.  But that was not a problem because most people were in shock, and didn’t want to go out anywhere anyway.  By the second night, most of the bars were open and packed to capacity.  In the first week many new couples were formed because no one wanted to sleep or live alone anymore.  And the ground kept shaking again and again for months afterward.  Every time it did, people would exit the buildings they were in.  People started talking about moving elsewhere, about how they didn’t like living in Los Angeles anymore.  Every time I closed my eyes and started to drift off to sleep, I would get a sensation that the ground was shaking and it would wake me up.  Every street became as congested as the freeways had been before the earthquake.

As you can imagine, people living in this type of environment are not going to have the same expectations as people living under normal circumstances.  Some may very well make demands beyond the norm of their claim adjuster.

What constitutes a crisis?

I should begin by defining what a crisis is.  The term “catastrophe” as defined by the insurance industry is not synonymous with “crisis” as defined in psychological terms.  “Crisis” has a personal component.  As another adjuster pointed out to me this week, a crisis has more to do with the person experiencing the loss than the size of the loss itself or, for that matter, the number of people affected.  We might find that some people react to almost any severe weather event as a crisis.  However, certain events – for example a hailstorm – are generally not a crisis.  In most cases, no one is injured or killed.  For some it may lead to a personal crisis, but this will be the rare individual.  The hailstorm, however, could be declared a catastrophe because a cat is declared based on the expected dollar cost to the insurance industry. 

Crisis has been defined as “an acute response to an event wherein homeostasis is disrupted, one’s usual coping mechanisms have failed, and there is evidence of significant distress or functional impairment” (Critical Incident Stress Management, Everly & Mitchell, 1999)  We often find insureds who are in this situation after a hurricane such as Katrina or Ivan.  People who, for instance, might normally be rather even-keeled and unflappable may very well be in some level of panic after their roof is blown off or after they have been living in a motel for a month.  Instead they are wondering when they can return to their home or their job.  The “Big Easy” was not taking life so easy by September and October of 2005. 

A Simple Discussion On Working With Someone In Crisis

As catadjusters we are in a position to be of significant assistance to those who are experiencing crisis.  Crisis Intervention, as a counseling discipline, focuses on very practical considerations.  It focuses on identifying resources for recovery.  We are one of those resources.  As adjusters we can be of great assistance in helping policyholders recover a sense of normalcy – the ultimate goal of any type of crisis intervention.  As I have mentioned in my previous article on CADO, I was an ordained minister for more than a decade.  I have sometimes described catadjusting as “ministry with a checkbook.”  More than any other type of emotional intervention, crisis intervention focuses on the practical.

By examining the definition of “crisis” above we can extrapolate what must happen in order to bring some sort of wholeness to the lives of those we serve.  The first element of the definition is that crisis is an acute response.  It is intense but not permanent.  Though it may seem to the insureds that their lives have been permanently changed in a dramatic manner, the fact is that the precipitating catastrophe has created a temporary situation.  While it would be ill-advised for any of us to flippantly tell someone whose house has been destroyed that this is just a temporary situation, there are nonetheless ways to assure someone that they will recover.  Without overstating the case, it is appropriate to explain to the insured that the insurance carrier exists to help the insured return to a normal life after such a crisis.  The fostering of hope is very important when things seem hopeless to those in crisis.  It can also be appropriate to remind the insured of other resources such as FEMA, The Salvation Army, and The Red Cross.  It is inappropriate, however, for us to tell them specifically what these other agencies can do for them.  We do not speak on behalf of any of these other agencies.  We represent the insurance carrier solely.  We must especially never send them to another agency for anything covered by the insurance policy.  Our first responsibility is to include all covered or potentially covered loss elements in our claim reports with our best analysis of coverage.

The second element of the definition is that homeostasis is disrupted.  Even the most creative or disorganized among us tend to follow certain routines that help us structure our lives.  There is some element of similarity in what we do each day.  The precipitating crisis event disrupts this.  If water supplies have been disrupted, the insureds may not even be able to brush their teeth easily upon waking up.  Their routine of watching a television program or reading the paper in the evening may be impossible due to an electrical outage.  They may have no workplace, no mail delivery, no open markets, no open restaurants.  The corner bar where they meet and talk to their neighbors may be closed.  They may be staying in a shelter, sleeping among hundreds of strangers with whom they share facilities.  They may temporarily have no privacy.  This will be particularly difficult for the introverts among them. 

To the best of our ability, we are in the business of helping people restore normalcy to their lives.  Those in crisis are looking to us for answers about when and how life will ever be the same again.  For some, it never will be the same.  There will only be different routines that will create a new normalcy.  We can help, once again, by focusing on the practical processes that will help to create some semblance of order in their lives.

The third element of the definition is that, for someone in crisis, normal coping mechanisms have failed.  What usually works for people to deal with stress in their environment no longer works.  This is particularly true in a major catastrophe.  When someone’s workplace is not accessible, the normal cash flow for a family is disrupted.  The home that provided shelter and comfort is no longer a place of guaranteed safety.  The goal of crisis intervention then, for us as catastrophic claim adjusters, is to help the insured identify means of coping with their new reality.  This may be in the form of assisting them to locate and pay for alternative housing, to rebuild what was destroyed, and replace what was lost.  It has often been expressed on CADO that our job as adjusters is to find coverage wherever it exists and allow for all that we can under the terms of the policy.  Some of the coverage afforded by the insurance policy may not be familiar to the policyholder.  It is our job to know what can be afforded to them in order to help them recover.  In this way we become part of the solution, and fulfill the contractual promise the insurance carrier makes when the insured buys a policy.

The fourth element of the definition is that the person in crisis is exhibiting severe distress or functional impairment.  Though this is the final element of the definition, it is often the first with which we must deal.  This means that when we encounter that policyholder who seems stressed out, unfocused, and scattered we may not be dealing with that policyholder operating in their normal mode of behavior.  This insured may not simply be a “crazy person”.  He or she may be a perfectly sane and rational person who in the midst of a crisis.  The very nature of a crisis is that it disrupts someone’s life and emotional state.  We have all had the experience where we greet the insured at the front door and suddenly it is as if we have entered a vortex.  The insured starts leading us around the house pointing to this and that area of damage faster than any human being could write down the scope of damage, let alone measure it.  Or the insured may continue to tell us all the horrible things that occurred on the day of the storm, or insist on talking continually so we cannot even concentrate on our work.  Then they call each day with some new damage they located or something else they forgot to tell us.  They may exhibit unusual behavior like walking through their house with a flashlight looking for fresh plaster cracks each night.  This is not their typical mode of behavior.  This is likely to be a result of the very catastrophe we are there to help them work through.  This may be because their world no longer feels safe, and they feel powerless to make it safe again.

It is not our job to help them through the emotional component of the crisis, but we need to at least defuse the anxiety long enough to do our job and to obtain the insured’s assistance in scoping the damage.  The first tip I have is that it will benefit us greatly to practice some empathic listening.  The ceramic outlet covers may seem unimportant to us in the whole scheme of the loss, but if they are important to the insured (because the insured keeps mentioning them) then they should be considered important.  We may discover – as one of our colleagues did – that the tattered old phonograph is the only thing the insured cares about because she used to sit and listen to it with her deceased husband.  The claim may not be settling because you want to take it as salvage.  She may settle the claim if you let her keep it, even though it no longer works.  A bit of empathic listening can reveal important details such as that. 

When working re-opened claims the number one complaint I hear is, “That first adjuster didn’t even listen to me.”  Sometimes I am able to review the estimate with the insured and show them that the concerns they have really are addressed in the estimate.  Therefore, the adjuster really did listen.  But it did not seem to the insured that the adjuster was listening, and that was what re-opened the claim.  The claim adjuster exhibited no empathy.  These people were in crisis and it seemed that no one cared.

The second tip I have here is that it is important not to buy into the panic or the manic behavior.  Speak in a calm and authoritative voice.  Invite the insured to sit down, perhaps, long enough to listen to what is important to them and take control of the situation.  We can accomplish little while being led from room to room frantically by the insured.  We may want to say something like, “Let me explain how the claim process works.”  A colleague explained to me that she spends 10 to 15 minutes with each insured simply listening to them and explaining how the claim process works before moving on to the inspection.  She believes these ten to fifteen minutes saves hours later on.  I believe she is correct.  Apparently, so do the people for whom she works.  She and her husband regularly work even in slow times when others are waiting for the phone to ring.  Most people have never had a claim before and do not know what to expect.  Take a few minutes to explain how you would like to take one room at a time, check that room thoroughly, measure it, and then move on to the next room.  Then explain what will happen with their claim after you leave their house.  This will often save you a time-consuming game of phone tag later.  All this may serve to put the insured at ease and move them gently out of panic mode.  Even if you have ten other inspections that day, it will benefit your scheduling to take a couple extra minutes to help the insured focus on the task at hand.  It may mean the difference between scoping all the damage on the first trip and having to return to this insured’s home to scope something that was missed the first time.  Though you are really not offering any long term emotional help for the insured (because you are not there as a counselor, pastor, or psychiatrist), you are focusing on one of the tasks that will help ultimately resolve the crisis. 

This has been a mere skimming of the surface of the issues involved in working with people in crisis.  I suspect the most important goal I have tried to achieve is simply fostering awareness that we are not dealing with people in a normal situation or normal frame of mind.  Therefore, we may need to be in a state of heightened awareness ourselves, and not simply write people off because of some exhibited bizarre behavior after a major catastrophe.  We are generally paid very well to handle a catastrophe, but we are not really hired to benefit ourselves.  We are hired as a benefit to the insured.  Our problems should be left at the motel so we can focus on the insured’s problems.  A brief study of crisis intervention techniques would serve many of us well.  This should go without saying as we prepare to go into a hurricane zone, but it may not occur to many of us that the emotional result of a storm may have a significant impact on the interaction between the insureds and ourselves – or, ultimately, of the claim settlement process.

  I would like to express my gratitude to those who reviewed this article before publication, and in many cases, contributed something of value which I incorporated into the article.  These people are Pastor Lee Carlton, Peter Burch, Mike Kunze, Deb Moroy, Meg Watts, Steve Beaumont, and Janice Toll. 


Splish Splash don’t go takin’ a bath- Understanding independent firm contracts

August 12, 2007

 I love the way music so aptly expresses so many things going on in life and love to use songs that help express issues much better than words ever can.  It’s a light hearted way to remember a principle we’re trying to drive home for  adjusters. Last week, our claim song of the week was Peter, Paul, and Mary’s song “Where have all the flowers gone” as our theme song for adjusters on “where have all the claim files gone ” here in this blog. This week we’ll talk about splishin’ and a splashin’ out on your new assignments and delving through the terms in many independent contracts. Here’s the link to the Splishin’ and a Splashin’ lyrics so you can follow along!

Every storm season brings out some of the best and the worst of adjusting firms and  contracts. We hear of adjusters “takin’ a bath” on their fee payments over some of the contract issues and non payment issues going on with hopefully a small number of unscrupulous firms.

Here are links to two very good commentaries on contracts. The first  here  comes from a blog entry over on CADO made by a senior adjuster and this article  by Donny Greer of Gulf States Training at the University of North Texas who shared this article with us over at ClaimSmentor with permission to post it in our blog :

Selection of a CAT Firm or CAT Claims Company

by:  Donny Greer of GulfStates Insurance Training at University of North Texas

http://www.adjustereducation.org

CAT Firms or CAT Claims Companies come in all shapes, sizes and flavors.   Not to mention their expertise levels and experience in running a real business.  
This type of business model structure brings out the best of  people and unfortunately the worst.  

Here’s what I am saying:  

These types of firms are generally started and run by professionals who are truly educated and experienced in both business and the insurance field with an emphasis on claims processing.  By and large, these firms are honest, forth-coming, and are personally chartered to “do-the-right-thing”.   But as you know, each and every field has its wolves!

Firms that process claims for insurance carriers earn their keep by accepting under agreement a claims assignment report containing many claims, from ten to five hundred, maybe even into the thousands as is the case during a major storm.   These claims could be auto, home, business and even in some cases casualty claims.  These homeowner types of claims are then farmed out (contracted) to Independent Adjusters whom are then sent out on the adjustment path to glory.  At least that is how it starts out.   

When I/As (independent adjusters) take on these claims, they likewise do so under the control of a contract offered to them by the CAT Firm (firm).   This is where things can first start to erode.   First, you receive a call from some firm with whom you have earlier registered with.  Next they ask you to go to the distant site.   With all your excitement, you’re off and running.  Now all seems well.   

Soon on the site, you are usually required to attend a Storm Meeting held by the firm with the goal of orientating new adjusters.  This meeting is quite beneficial as this is the place where all information is conveyed to the adjusters now on-site.   Miss this meeting and you miss the boat on policies, procedures, introduction to storm support personnel and so on.  Sometimes unscrupulous CAT firms purposely wait until you are at the storm site, and have incurred expenses before they present you with a contract to sign.  Don’t sign, and you must go home.   Could this be a contract signed under duress?  

What? you Say! 

Any contract is necessary for you and the firm you are working for, as it is the sole document that list out your agreement to provide services and spells out expectations of both parties.   This is a good thing as Martha Stewart has Said a few times.   The problem is not all firms are looking out for the adjuster’s best interest.  Read on… 

Most of the better firms out there are good, honest and looking out for the adjuster, and ask the adjuster to sign the agreement prior to deployment and before you the IA incur expense, but some, want you to bring in money for them, and under a very strict agreement written with mainly their interest in mind.  These firms however, are only concerned with a fast buck, and a BIG BUCK at that.   

Be aware of any contract wording BEFORE you leave your home for a storm.   Do yourself a favor and read the contract they are asking you to sign, before you invest in doing business with a firm you don’t really know.   Never wait until you have arrived in Ft. Lauderdale, entrenched in a hotel, in debt. for a new laptop computer, and then review a contract!  Know before you GO! 

In reading the contract, look for clauses where you are waiving your right to sue in court.  Read carefully the section that covers the adjuster’s hold back portion (portion normally held back by the CAT firm until all claims have been paid and settled).   Know this percentage BEFORE you travel and begin working.  Holdback is normal and there is nothing wrong with this type of arrangement.   Just be aware of how a contract might address such an issue.    

Again:  KNOW WHAT YOU ARE SIGNING  AS BEST YOU CAN. 

CAT firms bill the carrier based on the gross amount of say one of your claims.   They publish to you a fee schedule showing how you earn a percent of the billing amount.   The billing figure being an arbitrary figure listed on the fee schedule.  Shown as a split, in some cases 40/60 with 40% for the firm and 60% for the adjuster.   One question that comes to mind is what is this percent actually a percent of?  It is a percent of what the firm says they are billing the carrier for the claim.  Fact is, you don’t really know the true amount of the billing from the CAT company to the carrier, only what you are shown on the fee schedule. Your fee schedule only reflects your percentage of some listed amount published for the sake of the fee schedule’s completeness.  You are only allowed to see and know what some limited number of these firms want you to see.   

Keep this in mind when shopping for a firm to work for.  A 40/60 split sounds good, but your 60% is 60% of what?  You should know this answer  before you get engaged with a firm and way before you travel on your dime to a storm site.  You just might be working for pennies, not knowing it, and lining the pockets of some unworthy CAT Firm.   Be wise to Check-It-Out.  And beware of ads that solicit adjusters with talk of 70/30 and 80-20 etc., etc., etc.   Without you knowing what this percentage works against, you might be actually working for less that other adjusters with splits of 40/60. 

Speak with other adjusters on adjuster web sites that post experiences from other more experienced adjusters.   Join some web site forums and ask other adjusters who the good companies are.   Check with the Secretary of State’s office in the state the CAT firm resides to see if they are in good standing as a corporation.    

The best way to check out a CAT firm is to ask seasoned adjusters on portal website forums.   Trust what they tell you,  its better information than no information at all. 

Watch out for CAT firms!  Most are good, but try not to get so absorbed in deployment, that you forget to tend to the basics of being a good business professional.   

Any truly good company would have no problem at all allowing you time to review a contract prior to deployment, and any truly good company would invite any questions you may have about their structure, their officers, and how long they have been in business.  

One more time:  MOST ARE GOOD AND HONEST. 

Donny Greer
Donny Greer of GulfStates Insurance Training at University of North Texas 

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Our Blog continued below:

Don’t go out their “reelin’ with the feelin’ and a movin’ and a groovin’ with your excitement at obtaining placement on a roster or receiving new assignments without getting this most important document finalized.

Already this year we are hearing from adjusters receiving independent contracts faxed or emailed to them that contain “blanks” in the contract forms for important things such as fee splits, holdbacks, etc.  We have reports from one group of adjusters attending recent seminars for carrier certifications that could not find one person in the adjusting firm office or at the conference that even knew who signed contracts for their firm nor could the adjusters get copies back signed by an AUTHORIZED person with the adjusting firm. The firm had no idea where they were filed and they were not with the adjuster’s personnel records they sent in.  We have other adjusters being told ” that’s ok on the blanks- we’ll fill those in later”.    Now what does that tell you? Hello????????

One of the concerning contract terms in many of this year’s contracts concerns fines assessed back to the adjuster. We haven’t seen any yet that spelled out what exactly those fines were or the dollar amounts involved although I’ve heard there are some out there with specifics. The Citizens FL RFP manual for the adjusting firms does outline the many $1,000 fines to be assessed to adjusting firms yet the companion independent contracts the selected vendors have that we have viewed only indicated “any fines assessed will be passed on to the adjuster” type clauses. You need to have specifics in writing.

How about the non compete clauses? We saw one firm’s contract last year that didn’t allow adjusters to work for any other adjusting firm in the Southeast USA for 2 years! You need to check with your attorney regarding the validity of such non compete clauses in your state. I see many postings from adjusters giving advice about those “not holding up” in court. We’ll see. I’m monitoring the development of a suit file right now over in Alabama that was recently filed in June and we’ll link to it as things develop beyond the initial complaint and answers as well as searching for other cases involving adjusters and adjusting firms. We welcome any links if you are aware of any others.Don’t believe that the firms won’t enforce them! They are there for a reason and you need to abide by these contract agreements you sign.

We are looking for a good employment contract attorney willing to volunteer some time to look at a few of the examples of contracts we have to provide some general advice to adjusters if you know of anyone interested.  We’ll post their advice and links to their services both here on our blog and in the ClaimSmentor forums.  We are seeing simple contracts about 2 pages long to hearing reports of some in excess of 18 pages long. BE CAREFUL about what you are signing.

We recommend you seriously consider these terms in contracts and consider running all contracts by your attorney. I am not an advocate of “forum advice” posts being your sole venue of information on something so important as an independent contract. In my never ceasing quest to get insurance carriers and state insurance departments to help protect adjusters, I’d like to suggest if they aren’t doing so that carriers exam the independent contracts that adjusting firms give to their adjusters. It is not enough that the carrier sign a contract with the adjusting firm outlining their expectations but they should get involved in making sure that independents are not being taken advantage of in the independent contracts with the adjusters. Is it the “employee” versus “independent issue” keeping them from doing so? If so, state Insurance Departments need to establish acceptable standards for acceptable terms adjusting firms can use and have a published area on all state insurance department sites that list adjusting firms and their complaint ratios just as they do for consumers to determine what a carrier’s complaint ratio is before buying an insurance policy. I have a real problem with the fact a carrier has first hand knowledge of firms they have fired for poor claim service yet where do they publish that information for other carriers to avoid using them or for adjusters protection in accepting assignments for such a firm? They would fear being sued I’m sure but if the Department of Insurance required this they’d have to report it. I cannot stress enough we need to improve the communication gaps in the independent adjusting community for the protection and preservation of our careers.

Effective dates, Hold Harmless terms, Fee Schedules, Fee Splits, Payment terms (before or after carrier pays?), Witholding provisions(how much they withhold as well as how long), Non Compete Clauses, Venue (City/State/Court?)for where any disputes are handled, Other provisions such as Arbitration of Disputes, Fines to be assessed to you, information on who provides the Errors and Omissions Coverage, and many other important terms.. Seek your attorney’s advice BEFORE signing such provisions if you are in doubt.

We have many adjusters who sign contracts but then do not ask for a copy of the contract back after an AUTHORIZED person with the firm has signed it. We had a large group of over 30 adjusters working for one firm in 05 who could not pursue legal action for non payment on over 90 days of work as they had never gotten back a signed copy of their contracts showing any agreements between them and the adjusting firm. ASK for a copy of the Independent contract up front before you leave home as Donny points out above. If the vendor tells you they will sign them at the induction center, make sure you have two original copies with you and sign both and request they sign both and take one with you and keep it in a safe place in case you need it later. This will help you  avoid running into those situations where the “gathering” place has no facilities or staff to give you a copy on the spot.

Don’t assume because it is a large well established adjusting firm that you are safe signing their contracts. We have reports from several adjusters that contracts they assigned with a large vendor signed for Katrina duty contained 60% fee split agreements yet the payments received were 40% and they were then told that the 60% only applied to experienced adjusters. I’m curious if this would hold up in court since the fill in the blank could be twisted on the 60/40..is that 60 to you or 60 to the adjusting firm….we don’t know if it’s not specified in the contract right? Folks, that is not what their contract said. Make sure the fee split does apply to YOU and not termed “in general fee splits are….”.

Go movin’ and a groovin’ this storm season with the comfort of knowing you are protected if you encounter one of the tough situations with a non paying adjusting firm. Splishin’ and a Splashin’ just isn’t the way to handle business contracts professionally! Put those “dancin’ shoes on” AFTER you have properly prepared for accepting new assignments! We hope you will pass the word on to other new adjusters so they don’t go “takin’ a bath” this season!


Disaster Communication Issues and Expenses ….throw away phones you say?

August 6, 2007

Communication issues for adjusters are major during the initial stages of a catastrophe when insureds need us the most. There are some interesting articles and both good and poor advice on dealing with both issues.

Here’s a great article on phoning home during an emergency and the problems with cellphone coverage when there is widespread usage such as during the MN bridge collapse.We are all aware of the major problems adjusters faced during the first few weeks dealing with Katrina claims. This article mentions the number of people having to revert to phone booth usage which prompts us to remind you to purchase a long distance phone usage card prior to leaving home in the event you too will have to be using them. During the aftermath of hurricanes Ivan and Dennis, it was impossible to find them at Walmart and Sam’s so don’t leave home without one if your heading to a major catastrophe. Read the card information terms before purchasing it as many of the cards you find at the local gas stations charge unreasonable usage fees even if you do not connect with the call. My favorite are the cards from Sam’s Club and Walmart as the rates are most reasonable and you can refill them as necessary. Here’s a link to the Sam’s cards you can purchase on line.

Catastrophe adjusters are familiar with the many communication problems experienced while dealing with  cellphone coverage outages and finding available temporary housing at hotels with rooms left with high speed internet services needed to upload large file documents to close out your files. During Katrina, we had adjusters sitting in their cars in parking lots where they could pick up “hot spots” or in internet cafes with large numbers of adjusters trying to log in to download CMS (claim management system) new file assignments, upload inspection documents, and  to check their email for important instructions from their adjusting firms and carriers. It is quite challenging to meet deadlines for first contact calls and file closure quotas given the communication problems during the  the initial stages of a storm.

Cellphone expenses for independent adjusters are major. You can reduce your  long distance expenses through the use of internet phone services by using internet based phone services sponsored by such firms as Packet8 or Vonage. We couldn’t live without ours! They charge a monthly flat rate for long distance charges without regard to time of day in the US and Canada.  Packet8 allows us to take our wireless box and Packet8 box with us and use it with any high speed cable box nationwide  while out of town for meetings. Folks calling you don’t have to keep up with ever changing phone numbers and don’t even realize your not at your home/business location. It allows us to stay in communication constantly with customers. A great function of these services is receipt of your voice mail messages via email to maintain records of calls received and to listen to the messages right over your computer. These services generally run less than $40.00 per month for unlimited 24/7 phone coverage with some plans for residential service as low as $14.99 per month.

While viewing these sites, be sure to look at the virtual number options which also allow you to set up a virtual number in your hometown so your family members can reach you on storm by calling a local number saving on their cellphone minutes and long distance charges as well. They also allow you to set up a virtual number in the city where you are assigned on a catastrophe so your insureds are not incurring long distance charges to your out of state cellphone if your coming in from another area. The calls forward directly to your primary number so you aren’t giving out a phone number that won’t be in service once you depart from duty.

These programs are outstanding for adjusting firms such as the Packet8 Business plan allowing you to continue to add phones to your virtual office numbers as your staff increases during peak storm periods. They allow you to transfer calls between office members as if you were still working in the same office even though members may be spread apart nationwide at different storm locations. We just can’t say enough good things about considering these services to reduce your phone expenses.

This interesting article about “My First Storm” should help prepare new adjusters for what to expect as far as call volume  during phase one of storm duty and is very realistic. The National Association of Insurance Commissioners (NAIC) reports in this study that delays are the top reason for Department of Insurance Complaints. As a former claims manager, I can assure you that delays and  failure to return phone calls, failure to promptly call insureds within the first 48 hours of assignment receipt, and failure to call insureds and keep them up to date on their file status leads to poor performance evaluations, Department of Insurance complaints, and often involve your claim manager and executives in the home office. Complaints such as these should be avoided by disaster preparedness plans that include planning for these expected communication problems. If the article linked to above is news to you as a new adjuster about phone call volume, we highly recommend our  40 hour Fundamentals of Claims class  at ClaimSmentor where we hold a mock disaster zoning and assignment session teaching you how to deal with a large influx of claims and managing them wisely to meet  customer services deadlines, carrier goals, and to plan for carrier quotas for inspections and closings based on severity while at the same time dealing with the realities that hamper your efforts such as communication issues. This article by Mariposa LTD also provides excellent time management advice regarding appointments and calls.

Postings on many adjuster forum websites tell other adjusters to use disposable phones such as a Tracphone while out on cat then dispose of it when they depart the cat. First of all, the minutes for those disposable phones are too costly. More importantly,we strongly discourage such use. It’s important you check with your carrier to see if they allow this. I cannot imagine one carrier who would agree with this proposal just as they do not want you having mail sent to your hotel room. The insured needs contact information that is valid for the adjusting firm and/or carrier long after you have finished your assignment. Most carriers expect you to have calls come through their 1-800 service. This avoids communication complaints when adjusters depart the cat site and the insured is getting a disconnected number because you gave out a temporary number. Many of these 1-800 services will produce electronic phone messages that will be delivered to your email service or dropped in your basket each day along with other carrier or adjusting firm messages, files assignments and the like.

Carrier managers are alerted to complaint  messages regarding adjusters not returning phone calls. That is considered unacceptable and you won’t find a claims manager  able to support you for a volume of these types of complaints. Over the years, we’ve witnessed adjusters great at estimating but with poor customer service skills sent home.

 You can also check with your adjusting firm as many firms are becoming much more proactive setting up adjuster voice mail services. In either case, be sure you are checking in regularly for your messages so important calls are handled promptly. All carriers expect that calls will be returned within 24 hours. You can just imagine a bad faith attorney deposing you on a claim to find out you’ve been using a temporary “throw away” phone number…..definitely not a good idea.

While the forums are fun and informative, there is often information dispensed that would not meet the most basic of carrier guidelines. It’s most important you get your instructions straight from your adjusting firm manager and the carrier, not from your field associates or forum buddies. Find out directly from your managers what phone number you should be giving out and not only the number but the mailing address you should be using on all communication such as estimate headers.

Carriers prefer you not give out your business cards from home which many adjusters do because they have their cellphone number on them. We’ve had adjusters give out contruction company and other private business cards from home as it was the only card they had with their cellphone number. The carriers have temporary business cards for your use (fill in the correct contact info on these temporary cards) to provide information if you just check upon arrival at your assignment. You should not be providing your personal business cards but carrier professional business cards only.

Safety is a very important reason for using your firms phone contact information.  Adjusters should never be giving out  their hotel number with their room as the extension to insureds or contractors. Stories abound of angry insureds showing up at adjusters hotel rooms late in the evening as they could easily locate them when the hotel phone service identifies the name of the hotel when the customer calls back for you unless your room has direct incoming phone service.

We’ll address additional NAIC complaint issues mentioned in the article above in the next few weeks to help you understand how to avoid such complaints. Managers understand you work in a complex field where complaints are going to happen as you have to handle claims  on coverage issues, policy limits and other contract settlement terms and policy conditions.They will  support you when dealing with calls they get from policyholders as long as you are properly doing your job. They cannot support you when they are valid consumer complaints caused by failure to return calls, delays in contacts and inspecteds, and delays in calling insureds on other customer service issues.

Be safe out there  and reduce your phone expenses this storm season by disaster planning for options available to reach insureds when the cell phone may not be the best option.


Are Adjusters Fungible Units? Are Independent adjusters a dying breed?

August 2, 2007

Hmmmmmmmmm an interesting concept!

First, let’s define fungible and fungibility for those who aren’t familiar with these words which have become quite  amusing  for some lawyers as shown by the tee shirts and mugs available here regarding their own affectionate term for themselves as Fungible Billing Units. Adjusters also often bill on time and expense billing keeping up with their billable hours on a claim file so this could apply to us too….or does it?

From Wikipedia, the free encyclopedia

Fungibility is the property of a good or a commodity, that its individual units are capable of mutual substitution: different instances / units of the same type of good, make no difference

http://www.thefreedictionary.com/fungible

Fungible, Fungibles fun·gi·ble play_w(“F0364400″)adj.

1. Law Returnable or negotiable in kind or by substitution, as a quantity of grain for an equal amount of the same kind of grain.

2. Interchangeable.

n.

Something that is exchangeable or substitutable. Often used in the plural.


[Medieval Latin fungibilis, from Latin fung (vice), to perform (in place of).]

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Rumsfeld referred to our American troops as being fungible units while discussing an extension of their deployments to Iraq. You can view an  interesting article here referring to that comment. I particularly refer you to  comments made in this 2004 article:

“His vocabulary seems to reveal the mindset of a corporate efficiency expert, focused in an era of “downsizing” on reducing the “head counts” of “full-time equivalents” and their pesky benefit packages.”

Does this properly describe the way staff adjusters are feeling in a world of corporate downsizing of field operations with movement to claim central operations? How about independent adjusters who are sorely missing personal relationships with some adjusting firms and carriers as they are replaced by the in office fungibles with little to no training by comparison to the months and years of  training experienced adjusters were formerly given?

More importantly, how is our most important commodity- the insured- feeling about the team adjuster concept as insurers require a homeowner discuss various components of their claims (building damage, personal property damage, additional living expenses, and more) with a multitude of adjusters versus the  experience of face to face personal field inspection by adjusters fully competent to handle ALL aspects of their claim? You say this is nothing new “we’ve been doing this for years on the auto side of claims”. This is NOT the same as the practice in auto claims where the property damage to the car was handled by a property adjuster and the bodily injury claims for the person they hit were handled by the BI unit. In those cases there were 2 entirely different parties involved in the claim-not just the insured as far as the “damages” were concerned.

Is 24/7/365 service really better serving our customers when the quality of the service is reduced? Ahhhhhhhh….. customer service that never sleeps but when will we wake up to the fact that  more is not always better and that 24/7/365 is harming  our independents and employees and the families who deal with poor health issues of their loved one as they suffer the many  negative implications of shift work. This article explains the aftermath of shift schedules on one’s health in the long run. Imagine if shift work can cause  such health issues what the consequences  must be for adjusters working 7 days a week for a minimum of 12 hours per day as required on storm assignments and the damage done to the quality of life for the members of our community. All adjusters  in this industry have shared the experience of a carrier requiring they work  Thanksgiving and Christmas and most major holidays with no time for rest or time with family during catastrophe operations although relationships and health suffer as a result. We have also experienced the cycles of change as we move back and forth between phone service and field service to our customers. We know your customer service findings may show satisfaction with this service but that is NOT what we hear in the field as the face of the insurance company.

Author Jonathan Stein, JD discusses the lack of training and experience in this excellent article shared by Roy Cupps in the Articles section on his site at www.catadjuster.org. Don’t you think this says it all? This article further points out it’s a myth that adjusters are leaving the industry which we further discussed  here in our blog earlier this week while talking about the number of emergency adjuster licenses issued in FL and independent licenses in TX. With these large numbers, are we getting the experience level we need or just adding to the quality service problems by not properly training new adjusters entering our industry? How could we be needing “warm bodies” as adjusters often comment with numbers such as these? When you require 3 years of experience to send in independents during a crisis, why are you handling a large portion of your losses with  claim central adjusters new in the field driving experienced adjusters out of this business?

Experienced field adjusters know they aren’t a fungible commodity and there is no fungibility or mutual substitution of services between claim central operations and field personal services. We would just like to know when the carriers will wake up to this reality. We’ve all experienced the “measure to the inch” mentality of carrier reinspection departments for field adjusters while at the next assignment  in claim central environments we hear the in office adjusters comment  ” let me round that up an extra few feet to be sure it covers your expenses”. What are they thinking? All insureds and all claims need to be handled equally by qualified experienced adjusters while also providing for training opportunities for trainee adjusters both in the independent and staff adjusting fields. You can’t treat insureds within the same carrier differently depending on whether it is a phone settlement or a physical inspection. You can’t replenish retiring independents your firms count on when you do not allow newer adjusters to train with field  independent personnel or cross train with your personnel.

This CPCU poll shows the number one concern CPCU’s have is that the  insurance industry will soon be facing massive retirements of the baby boomer generation leaving us with a shortfall of qualified personnel. If we want to be proactive we can’t just talk about this but should join our endeavors to replenish the field through mentoring programs like ours at ClaimSmentor  for online assistance or field programs like the National Association of Catastrophe Adjusters (NACA) apprentice program. It isn’t enough just to offer mentoring within your carrier offices although it is commendable and encouraging to see some of the many programs like this mentor effort by Gail Soja of Chubb Custom Insurance in NJ.This 2007 Women to Watch article can be found at www.BusinessInsurance.com .

What else can be done to help those newly licensed adjusters outside of your offices to open opportunities and encourage their development? As adjusters, our concerns are not with your community bike rodeos, basketball tournament sponsorships, and car race sponsorship ads. Our concerns are with development and treatment of both staff and independent adjusters. Invest in us. We are a major part of your customer service program. We study your summer intern programs for college students but why not include the adult changing career fields? There are independents out here who are licensed, have Xactimate and other software classes, have taken many carrier certification exams to work your cat losses as well as other valuable training yet you continue to hire trainees with no license while these folks with an interest in beginning carrier adjusting careers can’t get their foot in the door. Why do you not advertise to appeal to them when you need entry level adjusters instead of the campus career fairs?

Adjusters are worried they will be replaced by the use of technology like aerial photography discussed in these articles here  and here. While their experience tells them it takes an adjuster to count the hail hits and an adjuster to meet face to face to handle coverage issues versus an unlicensed estimator, they see the writing on the wall that tools such as this can be used by carriers with claim central operations, estimators, and preferred contractors.

Do  studies reflect the change from field operations to claim central operations is reducing the cost per premium dollar to handle claims further reducing premiums for policyholders nationwide? Not based on any news articles we are reading about rate increases due to the storm seasons of 2004 and 2005! If so, point us in the right direction to review the current studies so we understand your position. How do your yearly average settlement figures per cause of loss compare today under these claim central operations to average settlement figures per cause of loss with your former field operations? We’d like to know and we are sure the average insurance consumer would also.

It would be great to see improvement in the independent community as well. Independent adjusters we speak with no longer feel like “core” adjusters for many firms. They are tired of the fee based conference  circuits and expenses in the yearly spring rounds to get noticed only to be herded into rooms with massive numbers of adjusters and placed on rosters without the first personal conversation with some firms before being activated. They want to gain the education and dedicate themselves as core adjusters to your firms but no one is committing to them in reverse because you cannot. The carriers haven’t committed to you and in cases where there are established relationships between carriers and vendors, there are no guarantees on file assignments or which order they stand  among the many firms the carrier is contracted with. Is there any wonder why there is such a duplication of names on adjusting firm rosters? This leaves the adjusting firms in a quandry each  and every storm not knowing who they can rely on to actually deploy since adjusters are on multiple rosters because they have no personal relationship and open dialogue with you. As your HR personnel changes, so do the contacts the adjusters have with your offices so even core adjusters in many cases aren’t the ones getting “the call”. New adjusters are amazed to learn their resume listing their experience is not shared with the carrier and do not understand when they are sometimes told not to disclose those experience levels with anyone at the carrier. Adjusters are also forbidden by some firms to ask any questions of a carrier staff employee but rather to go to the adjusting firm for answers. There are great reasons to do so if there is someone available for help at your firm but other times it would  more efficiently serve the insured to get a prompt final answer rather than go through the levels of command via the adjusting firm to carrier when they could simply make one call to the carrier and resolve a pending issue.

Together… staff, independents, and carrier executives need to study these issues and help preserve the quality of  customer service in our industry.

Then again ….. we can sit back and just wait for the newly announced Senate Panel Cat Issues Commission to tell us what those of us with first hand experience can address better.  See the announcement here.  How about the new federal recommendations on the 2007 Multi Peril Act?

Are we all following the discussions about seperate adjusters being discussed to handle the NFIP and wind loss claims versus adjusters managed by carriers in the house committee meetings causing havoc again with insureds required to deal with 2 adjusters leading to miscommunication on coverages? What has history taught us about this?

We all are well aware of the the reasons the single adjuster concept was developed to avoid the confusion for an insured having to deal with multiple adjusters. In fact, you can read  an example, the FL Condo Statute Chapter 718. This Statute shows who bears responsibility for various building components and elements  which now eliminates the mass confusion which used to be experienced by the insured when the Master policy adjuster differed in opinion with the unitowner adjuster or the by laws for the Association were not clear? Are we going to let these committees make decisions requiring we return to those days of misunderstandings between two adjusters creating delays for insureds on wind/water issues to resolve these kind of differences or move forward?

Let’s return to the Johnathon Stein, JD article  where he comments he is not speaking out about training and industry issues to create conflict but to “recognize a problem, open dialogue, offer possible solutions to try to restore the professionalism to adjusters”. We too are attempting to open much needed dialogue between our independent operations and your carrier plans. It is not enough to share this with your selected vendors. Share your goals and plans with the adjusting community at large so we know and don’t leave the industry if you plan to use us. Be more independent adjuster user friendly.

A great example of communication gaps with independents is the Citizens FL initative with the 45 selected vendors. While an independent can locate the announcement of the selections in a list on your purchasing link should they search hard enough, the list contained several incorrect adjusting firm names. Many adjusters following up for website and email addresses to apply for these jobs were told Citizens did not maintain such a list for independents although their task force committee and board meeting notes clearly say their intention is to use over 6,000 independent adjusters to handle their claims. This could have been simply handled by posting on the Citizen’s job opportunities on your website that you were looking for 6,000 independents and how they could apply with the 45 listed adjusting firms by posting this website and email information for each HR department at the adjusting firms. How about the possibility that Citizens could have accepted resumes through your system and sent a copy of each Independent applicants resume through a resume “rabbit” system which would have notified each vendor who then could contact the adjusters inviting them to meetings and for deployment opportunities. It also would have avoided mass confusion problems regarding the required pre-orientation meetings as adjusters are getting conflicting messages out here. We hope this is not a sign of what the now largest carrier in FL with 1.3 million policies is to deliver by way of claim service during storm season should a hurricane strike our state. Talk about needing a wake up call! What private insurer in the United States would ever be allowed to have a ratio like 60-70 staff to 6,000 independents? Will this not be a bad dream for all Floridians this coming year? Just visit the task force site and Citizens report here  for  these figures showing their current staff employee numbers.

See-it’s simple! We know we are not your employees but if you want to use us, each carrier can simply post this information and which vendors are serving you. Don’t assume adjusters know. Many do not. It would be impossible at this point for an adjuster to know which adjusting firms serve which carriers so they know where to apply. It’s not that the industry has “run out” of experienced adjusters. You just are not communicating your needs effectively to us as these examples show. We are doing the best we can trying to keep up with the many seminars and adjusting firms on ClaimSmentor for you but this should never have been necessary if it was clearly posted on the carrier website. If you want to build a complete puzzle, you need all of the pieces to put it together.

Carriers….have you considered using your marketing departments to poll independents who service your claims to get their anonymous input as to vendor feedback, training they are getting,  timeliness of adjuster fee bill payments,etc to put a stop to some of the poor practices in the independent adjuster field? Who knows better than the independents working with these vendors for a true picture of which adjusting firms should be used? It’s not uncommon to hear adjusters say “I just cannot believe carrier X is using adjusting firm Y “because they know the positives and negatives of each firm they have worked for. Ask for their opinions, they will gladly give it should you protect their identity so that are not run out of the adjusting community. The same goes with polling them about their experience while adjusting claims for your carrier. They can provide valuable input into the quality of claim handling instructions they were given, the treatment by your claim managers, and insight into issues they hear with your insureds on customer service out in the field.

Independent adjusters have no clear avenue for recovery of adjusting fee bills when they are not paid. Why do state insurance departments not post complaint stats for adjusting firms working in your state so adjusters can avoid these issues by not working for an unscrupulous firm to begin with?

Let’s make this a priority to save our industry before independents leave so we service customers the way we know it should be done. We don’t want to be considered Fungible Units  any more than the families of  troops appreciated those comments. What we do want to do is restore adjusters to valued members of the insurance community along with considering work/ life issues to enhance relationships at home along the way. Let’s walk the talk and move forward before these new government programs destroy our profession and service to policyholders. We know they are not better for the customer but we must band together and take action. Let’s “Make Things Happen” in the adjusting community to improve opportunities for valued members.

Postscipt 8/3/07: This Bloomberg article  just issued is an outstanding example of how we are being perceived by the public. The article discusses loss ratios, carrier executive comments on claim processes, and technology changes in the industry. See our earlier  blog on 2nd quarter results here which spell out why the loss ratio and profits may be higher as the number of claims received in the 2nd quarter of 2007 are the 2nd lowest received in a 2nd quarter in 10 years. If you have the time, there are several good video links at the top right side of the Bloomberg article to include a video interview of Robert Hartwig explaining from the carrier side of things why this article is wrong. Great stuff in both the article and the interviews!


Fl requires HMO’s and Insurers to offer Health Insurance to self employed during August 2007

August 2, 2007

It is often difficult for Independent adjusters to secure much needed health insurance coverage.

Fl offers OPEN ENROLLMENT which requires insurers and HMO’s  offer coverage without regard to your health status during the month of August for small groups, self employed, and independent contractors as outlined in the articles below.

Here are two articles you can view from the Sun Sentinel news here and the Emerald Coast news article here. You can also locate a list of the carriers and HMO’s offering this open enrollment opportunity on this coverage  here.

We hope you will share this information with your fellow Florida adjusters and adjusting firms so they don’t miss this excellent opportunity.

Our hearts and prayers are with the victims of yesterday’s MN bridge accident. If any of you are selected to work the auto accident claims with your adjusting firms, please be safe in your travels while there. It is always gut wrenching to work  auto or property claims involving human tragedy such as this.


Where have all the claim files gone …long time passing?

August 1, 2007

How many of you remember Peter, Paul, and Mary’s song “Where  have all the flowers gone….long time passing”? Here are the lyrics if you are too young to remember it. We hear the adjusters version of this regularly after the almost non existent storm season of 2006 and the slow 2007 season in their version of “where have all the claim assignments gone…long time passing”. There are cycles in the claims business just as we have cycles in life shown in this song. The problem is, we as adjusters,  are used to the field versus in office cycles and not such drastic changes in file assignment numbers.

It’s not just your imagination. Here are some 2nd quarter report figures from some important organizations now that the statistics are coming along for the end of the past quarter. First, we have the National Association of Mutual Insurance Companies(NAMIC) reporting that ISO statistics show it’s the second lowest number of catastrophes in a 2nd quarter in the past 10 years in this report. You can also see the Crawford and Company 2nd quarter press release here also reporting a significant drop in 2007 US losses.

In our claim version of this tune, we hear of those gone on to the FL My Safe home Project as inspectors and some who attempted to work in the LA Road2LA program who didn’t fair as well as stories like this one shows they faced some of the same non payment issues that some adjusters have experienced. We have adjusters nationwide attending the 45 selected vendors pre-orientation meetings as the first 50% of their roster lists had to be in 7/31/07  to Citizens of FL while many others have taken their NFIP, CEA, and carrier certifications at the yearly conferences for so many adjusting firms. It’s always nice to hear from fellow adjusters on some great daily assignments they’ve picked up after being selected to stay for carrier clean up activities then given the opportunity to remain to work some daily claims for the carriers too. That alone goes to show it does serve you and your adjusting firm well when you do a professional job on assignments. Some of my favorite adjusters keep me up to date on their activities including travel to London to work flood assignments while I hear from another about working claims for banks and those doing underwriting inspections also.

Hopefully, we’ll all be singing a new tune..my favorite catastrophe adjuster song “On the Road Again” by Willie Nelson soon as claim activity picks back up with the approaching peak of hurricane season. We certainly don’t wish harm or damage to anyone but catastrophe adjusters are a dedicated group of individuals ready to serve the public when the inevitable does occur!

We hope any readers who are policyholders will come to appreciate their struggles, training preparation activities, and strengths as you follow our new blog! There has been entirely enough bad press about adjusters in the wake of Katrina and entirely too little press about the sacrifices these adjusters make in their personal lives to travel nationwide to handle claims for our US citizens. They do not create policies but are often shot as the messenger while delivering sometimes bad news on coverage issues such as the wind and water debates from hurricane damage. Let’s work with them this year and realize that just as a dentist or doctor must deliver bad news to us…so are adjusters required to. It is much easier for them to provide coverage than deny coverage but they must fulfill the terms and conditions of the insurance contract in force at the time of loss as well as follow carrier directives on loss handling guidelines.

See you soon… for now…..I’m on the road again……………or was I off to check to see where have all the flowers have gone?


NAIC Model Independent Adjusters Licensing Act Cancelled…and changes in NM, NC, and TX licensing

July 31, 2007

Wasn’t it just yesterday I mentioned that change is certain in the Insurance adjusting world?

In that blog, we reported we could not find an update to the April 2007 draft of the model act which lead to further research on this topic.

We were able to locate the Spring newsletter of the American Association of Independent Claims Professionals which announced in the Spring letter that the NAIC Model Independent Licensing Act will not be pursued due to legislation regarding NAIC new Model Acts in general.

This Spring news letter also has important updates regarding Independent Adjuster licensing regulations in New Mexico, North Carolina and Texas which you can read all about on page 4 of the Spring newsletter here.


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