We all know that blind spots are dangerous for drivers, with more than 800,000 accidents per year related to them. But there’s a different kind of “blind spot” affecting your adjusting team—namely, when claims representatives proceed with settlement before viewing all essential facts.
Missing details can be critical
When an adjuster reviews a new claim and works to rebuild the loss, details can be sparse. Insureds may not remember all the facts, or they simply may not know how many details to provide when they report claims. Phone reps may not be trained to dig for more, and automated claim reporting systems can only elicit so much information. But those missing details can be key to settling claims, making this a time when what we don’t know can definitely hurt us—and hinder our ability to serve insureds.
Here are four critical areas where blind spots often occur:
- Does the event qualify as a covered loss? First, adjusters must dig into the policy contract terms to identify the coverage trigger that allows a loss to qualify as a claim. In many cases, these triggers are self-evident, as in the case of a first-party collision loss. Other cases are more complex: for example, permissive use, potential coverage for third parties, professional liability, and more. These require more adjuster time to determine whether a claim should move forward.
- Are all the facts present? After claims reps establish that losses are covered, they need to review all the facts at hand and figure out what’s missing. Many times, additional information can be obtained through a call to interested parties. But sometimes the facts don’t add up, either due to unintentionally or intentionally misleading statements or omissions. That’s when adjusters need to take deep dives and perhaps obtain supporting documentation from external resources, such as weather reports, social media checks, time-stamped car location photos, and more.
- Are the parties who they say they are? It may not be too difficult to confirm the identity of your company’s insureds, but what about third-party claimants who may have been hurt in a vehicular accident, for example? Is there enough information to verify they are who they say they are? Using entity resolution techniques, we can make sure Brad Smith isn’t also suing another company as Bernard Jones. Entity resolution techniques can be used to link two or more records and identify them as being associated with or representing the same individual. Personally identifiable information is very helpful in this effort. Because they’re unique, Social Security numbers can confirm individuals’ identity but are many times missing from third parties’ information in claims. In fact, customers of Verisk’s Append-DSSM service—which supplies missing Social Security numbers—had more than 877,000 claims that lacked SSNs over the course of just two months. Append-DS found SSNs for 63 percent of those claims, strengthening insurers’ identity resolution efforts.
- Is anything suspicious? With fraud present in an estimated 10 percent of claims, seasoned adjusters have experienced plenty of times when something seems off, whether it’s opportunistic padding of a loss or full-scale organized fraud. If the facts aren’t adding up, it’s time to involve the SIU.
Benefits of looking beyond the blind spots
Adjusters who look beyond the surface of a claim’s details produce the best SIU referrals. But they also better serve customers because of their ability to expedite meritorious claims and coverage analyses. They get the “good claims” (representing 92 to 98 percent of all claims based on industry studies) paid quickly. By filling in the missing pieces, these adjusters contribute to their companies’ impressive KPIs (key performance indicators)—including improved customer service and lower ALAEs (allocated loss adjustment expenses).