(An edited version of this article appeared in the December 1996 issue of Claims Magazine)

QUICK RESPONSE - THE BEST WAY

by Ronald J. Zaremba, CPCU,AIC,ARM

Nearly all insurers require 24 hour prompt contact with the insured and the claimant. There is a difference however as to when the clock starts to run. Its hard to believe in this age of consumerism, but there are still insurers whose response to a new claim is in this order:

1 receive claim

2 confirm coverage

3 set up claim

4 contact the insured and claimant

Thus the 24 hour clock does not start until after coverage has been confirmed and the claim has been set up. Most insurers now respond in this order:

1 receive claim

2 contact the insured and claimant

3 confirm coverage

4 set up claim

For most, the 24 hour clock starts upon receipt of the claim by the claims department. And it should. Everyone agrees that prompt contact with the insured and claimant saves money. Does it make a difference when the clock starts ? In a word, yes. You see, the policyholder's clock started running when he reported the claim and the claimants clock started running when he accidentally met your insured. Both of these important parties have had your meter running before you became aware of it. Thus your best response is a quick response instead of a prompt response.

Your number one daily priority is to make immediate contact with the people involved in the new claims you receive. In a natural catastrophe, this is not possible. In such situations, people realize that you are swamped and their expectations are tempered. However in normal times, there is no change in their expectations and you had better call ASAP.

Here are ten reasons why you, as the adjuster, should make a quick personal response on all your new claims :

1 Assure the policyholder/claimant that you are there

2 Listen, offer comfort and sympathy

3 Make a preliminary assessment of the scope of the loss

4 Make recommendations to reduce the loss

5 Recognize potential coverage limitations/problems

6 Start your investigation and documentation

7 Plan your future investigation and documentation

8 Preserve the perishable evidence

9 Locate/find witnesses

10 Identify salvage and subrogation potential

Do you need coverage confirmed or the claim set up to perform any of the above reasons for a quick response ? No, but you must be careful not to make any commitments. Independent adjusters, since they rarely have any authority are experienced at making no commitments. (Alas, that is not a joke. )

Note that arranging and starting clean up and repairs is not included in the ten reasons to make a quick response. Seriously, if you cannot make a quick response with your own staff, consider an independent adjuster as your next best bet instead of a contractor. An independent adjuster will better serve you in as much as his/her training will meet all ten of the reasons for a quick response.

However, here are two more good reasons why you should consider for sending an independent adjuster out ,instead of a contractor, for the first contact and inspection. The fact that you send a contractor or someone who can and is willing to do the repairs, may presuppose that you accept responsibility for any work estimated or completed by the contractors and his sub-contractors. Thus you may find you are committed to not only to what the contractor sees as the scope of work needed but you may also be held accountable for the quality of workmanship employed. The property owner is going to say "After all, your contractor said this has to be done and why would you send him out if you didn't plan on paying for it?" We have several clients that not only do not send any contractors out, they instruct us not to recommend or even suggest any contractors to the property owner. To do otherwise, they feel can compromise their position on coverage and liability.

What if the insured or claimant is less than honest? You may find it hard to believe, but some people want and demand more than what they have coming. Sad, but true. In such situations, the contractor may find himself in a real bind as he wants the work but he needs the insured or claimant to sign off the settlement check. The contractor may find he is not in a good position to say "no" to the "special requests" of the insured or claimant. If there is to be a dispute on what is covered or the extent of the benefits available, the contractor would generally prefer to have the dispute between the insurer and the property owner and not be in the middle of it. The contractor would like to know about the problem, but would generally like to keep it an "insurance" problem.

In many cases it is a good idea to get both an adjuster and a contractor out as soon as possible. The contractor likes to have the adjuster out to deal with the insured and claimant. It takes the pressure off him to respond to the "special requests" of the property owner. Working with the adjuster, the contractor can avoid some of the inherent problems.

And here is a final reason to call an independent adjuster instead of a contractor for your first quick response: The independent adjuster is in a position (even without authority) to estimate, resolve and compromise with the property owner on a "cash out" basis for the cost of repairs or less, all subject to your approval.

So if you can not make the first quick response yourself, call an independent adjuster. You will be better served.