During a recent interview with Claims Journal, Kevin Quinley, claims expert and principal of Quinley Risk Associates, provided the seven habits of highly effective coverage adjusters.
Policy analysis is the bedrock of claims handling, said Quinley during the second in a series of Claims Insights podcasts. Though liability and damages are often the focus of a claim, coverage analysis is necessary to evaluate both.
“Probably there’s more bad faith claims arising out of coverage issues than disputes over liability or damages,” said Quinley. “A skilled adjuster has to embrace best practices when handling insurance coverage.”
Habit 1: Touch Base With the Underwriter. While the two don’t always mingle, a discussion between an adjuster and an underwriter can help an adjuster evaluate coverage by offering the underwriter’s viewpoint. Quinley offered a worst case scenario where an adjuster takes a coverage stance that is in opposition to a note or decision contained within the underwriting file.
Habit 2: Use Internal Sounding Boards. “Superb coverage adjusters bounce ideas off of coworkers, supervisors, bosses,” Quinley said. He recommended that before making hasty coverage decisions adjusters seek others’ input, like during a roundtable discussion.
Habit 3: Be Objective. This is very important, he said, because there can be a disparity between conference room reality within the claims department and courtroom reality.
“They [effective coverage adjusters] ask themselves the following question, ‘What might a neutral trier of fact decide in interpreting the policy exclusion or condition?’”
Habit 4: Play Devil’s or Insured’s Advocate. Quinley said that effective coverage adjusters put themselves in the policyholder’s shoes. They ask themselves ‘what if’ questions, evaluate whether key policy terms are vague and consider the effect group think might have on a coverage stance.
“They try to think of holes that opposing counsel could poke in the adjuster’s coverage analysis and stance,” he said.
Quinley offered the following examples:
- Can a particular word or phrase in the policy be interpreted in different ways?
- Is there a key policy term that is the foundation of the coverage denial that may not be defined within the policy?
Habit 5: Getting Input From Coverage Counsel. While not necessary in every case, getting an objective assessment of the strength or weakness of a coverage stance can be beneficial. Effective coverage adjusters understand the urgency and need for early assignment.
Habit 6: Be Realistic and See the Big Picture. Quinley said that effective coverage adjusters evaluate coverage stances to consider the ramifications of reserving rights and denying coverage. He cited one example where a reservation of rights on late notice could lead to an independent counsel request in certain jurisdictions.
Habit 7: Operationalize Lessons Learned. When a coverage battle is lost, Quinley said highly effective coverage adjusters reassess the situation and make suggestions on policy revisions to underwriting. This helps insurers operationalize the reasons for the loss by providing underwriting information to evaluate pricing and coverage concerns.
Listen to the podcast to learn more about the habits of effective coverage adjusters.
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