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?


Who moved my “claims cheese”…dealing with change in the Insurance adjusting community

July 30, 2007

One thing that is certain in the insurance claims adjusting community is CHANGE!

Years ago, as staff claim managers, we were asked to read the book Who Moved my Cheese by Dr Spencer Johnson. What a great book with parables to help us understand change and the varying ways folks deal with change through the characters of Hem, Haw, Sniff, and Scurry. This book has developed into training programs and much more and is highly recommended for adjusting firm presentations and for adjusters experiencing change.

So what is changing in our insurance adjusting community? To name just a few things that we are experiencing which is creating havoc for independent adjusters income:

Carriers are moving to large in house claim central operations handling many claims over the phone by staff adjusters. Here is just one of many new announcements.

Carriers are withdrawing coverage in nationwide coastal communities. Are you prepared to work claims for the many state windpools by taking pre-orientation training seminars that they are requiring or are you one of the adjusters saying ” they’ll call me without it anyway-they will be desperate”?

Insureds are self insuring and increasing deductibles due to the rising cost of insurance reducing the number of claims to be worked by independent and staff adjusters.

We’ve had 2 major whistleblower suits in the wake of Katrina caused by independents leading to increased use of staff adjusters by carriers. If your not familiar with them read this and this interesting news article.

Carriers are announcing limited assignments versus full assignments to independents in many cases which will result in reduced fees adjusters can earn. Examples include carriers handling the additional living expense and contents claim while allowing the independent adjuster to handle the building estimate portion of the loss only.

We’ve had an unprecedented number of trainee adjusters enter the field due to heavy claim activity after the 2004 and 2005 storm season resulting in less assignments per adjuster. Look at these articles showing the numbers of emergency adjusters in FL in 04 and the number of independent licenses issued in Tx was discussed in this TDI article:

Agent Licensing: Matt Ray, Deputy Commissioner, Licensing, stated that the licensing statutes and TDI staff performed well during the disaster. The statute is designed to facilitate carriers’ ability to bring in adjusters. If an adjuster has a license in another state, then the adjuster does not need a Texas license in order to be a temporary adjuster. If a professional adjuster’s home state does not license adjusters, the adjuster can work in Texas under the company’s supervision and the company will be held accountable for the adjuster’s actions. TDI has issued 50,000 adjuster licenses, and 15,000 are non-residents. If an adjuster is licensed in another state, then TDI grants reciprocity without a test or application. TDI issues emergency adjuster licenses to individuals who are not adjusters, for example, other staff who work for the carrier, so they can get into the field quickly. Emergency adjuster applications are given priority for processing by TDI Licensing staff. TDI does not issue badges to agents or adjusters.

http://www.tdi.state.tx.us/commish/storms/tsdc52006.html   (this link is now moved so article is posted above).

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Carriers are increasing the number of staff field adjusters for line units and catastrophe operations further reducing assignments to independent adjusting firms.

Multitudes of new start up independent adjusting firms are decreasing the number of assignments to other  adjusting firms. This also results in less negotiation with carriers of adjuster fee schedules by the adjusting firm to avoid losing carrier contracts.

Large fines are being assessed to adjusting firms by carriers such as Citizens of FL causing some intimidating clauses to be added to independent adjusting firm contracts to pass these fines on to their adjusters. Look at page 5 of this RFP for just ONE of the fines to be assessed to adjusting firms. Several others can be found in the 103 page RFP the firms used when considering the requirements to work these claims. How about other fines in the news such as this  $3,500 fine in 2004 for adjusters discouraging insureds from filing a DOI complaint?

Our community has an increased influx of start up training firms for estimatic software training and Adjuster 101 classes. In many cases, new adjusters are being trained by barely more experienced adjusters turned training facility. The advice given ,we hear in several cases ,would not meet the minimim carrier expectations. Can you imagine being a new adjuster trying to decide which firm to train with?

National Assn of Insurance Commissioners is working on a Model Act for Independent Adjusters which will change the way independent adjusters are licensed when the act is adopted by State Insurance Departments. Right now they don’t have the latest draft up so here’s a link to the last one we could view.

Unprecedented numbers of independent adjusters are experiencing serious problems with receipt of fee bill payments after months of working out on catastrophe assignments. Here is a site started due to this problem during Katrina that was overwhelmed with the volume of adjusters reporting such problems. Adjusters have no clear cut answer on how they are to proceed to recover these fees reducing the number of adjusters in our community. It’s firms such as this one outlining just one example of some problems faced by adjusters working for this outfit. Here is also a link to many other articles on this firm.

There seems to be an ever increasing requirement to attend adjusting firm conferences and seminars to be placed or remain on their rosters. Stories abound of adjusters spending thousands of dollars annually at a time their income is greatly reduced after the slow storm season of 2006 with no hurricanes yet they have no choice if they choose to remain deployable with different adjusting firms.

Adjusters in great numbers are being named in suit files for bad faith when simply following carrier directives for claim handling. Here’s an example of a suit file naming many adjusters. Is this going to drive up the costs for Errors and Omissions coverage for adjusting firms and adjusters?

New carriers are entering the market requiring adjusters take more carrier certification classes. It’s important the carriers conduct these as shown here in this Merlin Law Firm list of actions that can bring rise to bad faith allegations.

It is important with our ever changing environment that you stay abreast of many important developments in our adjusting community. While your home on down time in between storms, enjoy your family and get that much needed rest but keep up with important issues by reading professional publications such as Claims Magazine  and subscribing to news reels such as the Insurance Journal  and National Underwriter’s breaking news articles . You’ll also see a list of my favorite Claims Blogs listed on the right column of my blog that you might find very interesting and help us keep up to date with claim issues.

You need to continue your education to increase your odds of being selected from among the thousands of adjusters seeking employment/deployment by participating in carrier certifications such as those put on by reputable firms such as Eberl’s and Worley and many other firms. One of the most important designations you can obtain as an adjuster is the Associates in Claims AIC designation which is recognized by both carriers and adjusting firms. It’s tough to find the time, I know! I’m still working on my last part for my CPCU designation and it’s hard work but it will be worth the effort. I remember a division manager telling me for every 5 who say they cannot do it since they are on cat, he could always seek out and find those who did which he promoted for their efforts.

Here’s a link to keep up with many states licensing changes on the left column of our website. CADO also has an excellent site for all states licensing requirements here.

You are welcome to participat at ClaimSmentor to help you keep up with many of these issues and links such as those provided in this article should you not have time to keep up with the many different issues facing us.

So who are you….Hem,Haw, Sniff, or Scurry? Read the book and you decide! I see examples of each of these characters daily in the claims adjusting community. There are those who find every reason not to follow the new trends, those that debate it in forums and tell others why they don’t need to pay attention to these new trends, those who explore the new information and consider the changes in our industy, and those that agree the changes are reducing their income and move with the new opportunities finding income generating opportunities in these new claim central operations, as staff adjusters, and with new carrier assignments through their favorite adjusting firms as they pick up new clients. We hope you will see the advantages of moving ahead to remain a member of the independent adjusting community!