Welcome to Ravenna’s Monday Mumblings!
This is the start of a new series where I’m going to give an overview of some of the professions I’ve done over the past 42 years. Yes, that’s how long I’ve been working for a living.
Ever read a book where the hero or heroine does a specific profession you just happen to know something about, and wonder where on earth the author got her/his information about said profession? Yeah. Me, too. That’s why I’m doing this series.
To be fair, there is likely some (or much) variation between the same professions in different countries. Even in the USA, there is going to be variation between states or general locations around the country. But the basics are still same, or at least very similar. That’s my goal for this series – to give you the basics. if you need more specific information as an author, your best bet is to find someone who does what you want your hero/heroine to do, and who lives where your hero/heroine lives, and ask them a ton of questions.
For the past twelve years, I’ve worked for the largest insurance company in the USA. For four and a half of those years, I worked as a claim representative in fire casualty claims.
First, “Fire” claims is our company’s umbrella for all policies that are not auto and not life. Other companies may refer to these types of policies under a different term. Auto and Life have their own separate umbrellas in the company I work for. Although my direct experience is with fire claims, I’ve worked in a support role for auto claims so I can speak to those as well.
Life insurance and medical insurance are different animals, and I’ve never handled either, but handling a claim is still handling a claim. The basic procedures are still the same. And since I have never lived or worked in another country, I can only speak to the US insurance industry in this post.
A word or two of caution: the purpose of this post is NOT to give you a crash course on insurance, and I cannot, for obvious reasons, answer any questions about a claim you have, or specifics about your coverage. So please don’t ask.
A liability, or a casualty claim, is a third party claim. That means the policy holder, through their negligence, caused another person bodily harm or property damage. These types of claims are usually handled by specialized groups, but in some smaller insurance companies, claims adjusters may handle both first and third party claims. Auto claims often involve both first party and third party claims, as there is usually coverage for the driver and all passengers, regardless of whether those passengers are on the policy.
The difference between first and third party fire claims can be explained like this. If a tornado blows your roof off, you file a claim with your insurance company to have the roof replaced. It’s your policy. That’s a first party claim.
If the same tornado knocks over a dead tree in your yard and that tree falls on your neighbor’s roof and damages it, your neighbor can file a claim against YOUR insurance policy to pay for the roof damage the tree did. That’s a third party claim. Through your negligence (not having the dead tree removed from your yard) you caused property damage to your neighbor’s house. Your insurance company would pay for that damage from the liability coverage on your homeowner’s policy.
In an auto policy, at least in the company I work for, even if the driver is not negligent in their actions, meaning they are not at fault for the accident, there is medical coverage for the passengers in the car, as well as for the driver. The at-fault person’s policy would pay for additional expenses for injured persons in that instance. Auto claim representatives often work with other insurance companies under those circumstances to ensure everyone’s expenses are taken care of.
So, what does a claims adjuster do?
Whether a claims adjuster handles fire, auto, life, or medical insurance claims, whether the claim is a first or third party one, the first thing they do is contact the parties involved in the claim to find out what happened. That may include the policy holder, the injured person making the claim, witnesses, physicians, passengers in the car, neighbors, etc. They may also gather police reports or other documentation that is available to assist them in making claims decisions, and/or in reconstructing the accident.
The second thing they do is read the policy. Yep. We do read them and we do understand them. We have to, for obvious reasons. Next, they need to determine what coverage applies to your loss. And they need to determine if there are any exclusions to that policy that might take away coverage, or exclude certain parts of it.
No insurance policy will protect you against everything. It’s a common misconception that they do, but insurance is designed to protect you against LOSS FROM ACCIDENTS. Again, life insurance policies and medical insurance policies are a bit different, but they also have exclusions, because they have specific losses against which they are designed to protect.
Why don’t insurance policies cover everything? Because it’s such a huge risk that no company could stay in business if they tried to do it. Insurance spreads the risk over a large amount of policy holders. If they didn’t do that, the premiums the company would have to charge to be able to pay claims would be astronomical.
Also, it’s important to know that in the US, every state has a DOI – a Department of Insurance – that regulates not only how policies are written, but how claims are handled, when they need to be settled relative to the loss, etc. Yes, insurance companies have to follow the rules. If they didn’t, the company wouldn’t be in business for very long.
After the claims adjuster determines coverage and any exclusions, they have one or more additional conversations with the person filing the claim. They have as many as it takes, and they may go out and inspect the scene if needed, or send out another person to do that if they are strictly an in-office rep. Things are fixed if they are covered, payment is made if there are medical injuries that are covered, and the process continues until there is no coverage left, the person has stopped treating for their injuries, or the property damage is fixed.
Claims adjusters have to be familiar with case law in the states where they handle claims, as well as statutes for those states covering property damage, traffic laws, and bodily injury. They have to understand the legal concept of negligence and what is needed to prove it in court. They often work closely with attorneys to resolve a claim.
Claims adjusters may work out of their homes, only going into a local office when needed, or they may work from a desk in a busy office with other claims adjusters. The pay varies as well, depending on location and years of experience. It’s good pay, but no one becomes a millionaire as a claims adjuster.
It’s also a very busy job. They often work long hours at odd times, because auto accidents and fires don’t only happen between 9 to 5, Monday through Friday. They’re on the phone a lot, they have inspections to do, they have training to keep up with, and in some states, they need to be licensed. This requires additional training each year.
They have to justify what they paid, or what they intend to pay, with documentation, and usually with the approval of their supervisor. Supervisors, in turn, have to justly what was paid on claims to their boss, and sometimes it goes up a few levels, especially with a large loss which exceeds or nears policy limits.
Next week, we’ll talk about what a real registered nurse does in the USA.
Until then, Happy Writing!