Homeowners' Claims

Tom Matthews is a seasoned property adjuster who has worked for Allstate for over 15 years. He specializes in handling large-loss homeowners' claims, usually those associated with total-loss fires.

Like many in the industry, Matthews ended up in claims by accident. During high school and college he worked in construction, but after earning his degree he decided the field wasn't for him. One job referral later from his college, he found himself working and adjusting auto and small-property claims at Allstate.

Dealing with large-scale residential losses from fire means Matthews is interacting with policyholders who are struggling to make sense of their new reality. They are literally homeless and are quite often in a stage of shock. Handling such an emotionally devastating situation requires a deftness not many deal with on a regular basis. What are his secrets? Matthews explains.

“You don't want to dump a lot of information on them at first,” he said. “It's more about making sure everybody is okay. I just want to take care of them in those early moments and do whatever I can for their immediate needs. I always tell people the primary thing is to try and get back into the normal swing of things.”

Empathy like this helps build trust and understanding. Though we may not like it, the insurance industry's reputation is often filtered by its failures. Matthews acknowledged this reality, saying that “fear of the big insurance company” is a policyholder emotion he has to actively work to assuage at times, especially during the early stages of a claim. To accomplish this, he makes every loss and claimant a priority.

“First and foremost, you are dealing with a customer, so whatever is happening in the background, whatever you are doing for your job, should not be conveyed to them,” said Matthews. “If I am at someone's house, they are my main concern. If my phone is ringing, I don't answer because each claimant gets my full attention.”

That kind of treatment is especially worth noting when it comes to explaining coverage. Given the technical nature of the document and the fact that most consumers lack an understanding of their policies, going over the terms of coverage can prove to be a powder keg. Here's how Matthews avoids being the match.

“When you have to deny coverage for something, the phrase you always hear in response is, 'Why do I have insurance?'” he said. “So you try to give them examples of all of the other events or items that are covered, things about which many people do not generally think. Again, you have to be empathetic. You have to explain the policy, but you have to be friendly about it. It's not always easy, and different people take it different ways. Some people cannot understand, and some people just don't want to understand.”

To wrap up, here are some valuable tips Matthews offered up to others handling large-loss residential property claims.

Public adjusters are a fact of life. “Almost every fire loss that I go to, public adjusters are there, have been there, or are going to be there. You have to be very careful with what you do and what you say. Anything you say can and will be used against you. Document everything.”

Be situationally aware. “Be careful going into boarded-up houses. I like to go in and make sure no one is in the house before I begin. I may even lock myself inside the house. Also, consider hiring an off-duty police officer for security if you think it's necessary.”

Bad-faith concerns. “If you have to really think about whether you are doing something wrong or doing something right, it's usually the wrong thing to do. So don't do it.”

Auto Claims

Michael Banda is a senior claim adjuster for MetLife Home & Auto, where he mainly handles auto-related claims. He is a second-generation adjuster who grew up listening to stories his father told about working in the industry, and got hooked. After college, he went searching for jobs in insurance and ended up in claims.

While dollar severity per claim is usually lower in auto losses, for those involved in an accident it remains a major ordeal. Many policyholders fear increased premiums, loss of transportation, and lingering injuries. All of that anxiety means a good first impression goes a long way toward creating a successful resolution. Here is how Banda engages a policyholder at the outset.

“You have to be understanding when you talk to them,” he said. “I start by apologizing right upfront, saying something like 'I'm sorry to hear about the accident.' Additionally, you really want to make sure that they are okay. A lot of times, simple things like that will calm the customer down right away, which helps build rapport with them.”

Telling policyholders what to expect during the claim process is the next step, and continues the process of easing claimant concerns and anxiety.

“In the initial conversation, you want to tell them how you are going to go about adjusting the claim and when you are going to follow up,” said Banda. “This will help you as far as phone calls because the customer is already going to know what is going on and what you are doing when you are not communicating with them. It really helps the customer understand a process with which they may not be familiar.”

Banda is careful about setting expectations until an investigation is complete, though. He explained that if you tell the customer upfront that you suspect he is not at fault for an accident, but it comes to light after speaking with witnesses that he is, you are setting yourself up for failure.

“You need to watch what you say to the policyholder so there are no miscommunications,” he said. “You really want to look at all the evidence that is presented to you first. You want to talk to the other driver, get a police report, look at damage photos, and talk to witnesses.”

Banda avoids other opportunities for miscommunication by using the best advice he says he ever received: Listen to the policyholder. By listening, adjusters put themselves in a better position to adjust the claim effectively while also ferreting out fraudulent claims.

“It all starts with a solid recorded statement,” he said. “You really want to listen to the customer because they are going to tell you the facts of the accident. Be sure to ask open-ended questions and let them provide the information. They are going to tell you in one way or another if there are any red flags present into which you need to do a further investigation.”

Banda offered up additional advice to auto adjusters looking to develop their street skills.

Be prepared. “A lot of times, the initial claim report will have brief facts that let you know what kind of accident you are going to be looking at. Prepare beforehand by coming up with questions that are necessary for that type of loss.”

Have eyes in the field. “You really want to have a close relationship with appraisers and keep them informed. If you identify something in the claim that may need further investigation, you need to explain that to the appraiser. That way they know what they are looking for.”

Trust your gut. “If you get that feeling that there's something wrong with a claim or something does not feel right and fraud is suspected, make sure to ask additional questions. Consider going to a supervisor or coworker for their input.”

Commercial Claims

Rich Lafayette is an executive general adjuster with Crawford & Company and has been working in claims since 1974. The majority of losses he handles involve high-end, complex manufacturing, or commercial industrial claims. Whether it is a power plant or a manufacturing facility, the loss is generally in excess of $1 million.

Commercial claimants differ from auto and homeowners' claimants because they tend to look at the loss strictly from a business perspective. Items of emotional or sentimental value are rare. However, handling a commercial claimant involves using many of the same techniques used by auto and homeowners' adjusters, such as articulating the claim process as clearly and simply as possible.

“A large manufacturing facility owner's main purpose is to run that business and make a profit,” said Lafayette. “So a lot of commercial policyholders get nervous when the adjuster shows up because it's something outside their daily routine. They can get frustrated because they do not understand the process. That means you have to convince them that you are there to help them work through it.”

Lafayette said mapping out the claim process helps in other ways, too.

“Putting together a business plan with tentative timelines goes a long way toward preventing a potential bad-faith claim because you are working on this process together,” he said. “Everything in terms of necessary timetables is upfront, and the insured is in agreement with it.”

Actively engaging the policyholder to aid in problem-solving aspects of the claim will yield positive results, especially since adjusters cannot be expected to know how every type of facility operates. Teamwork is the name of the game, and asking questions can yield valuable answers.

“Let's say a manufacturing facility has three out of five assembly lines down,” said Lafayette. “Ask the policyholder if there is a place in his facility that something temporary can be set up to get them back up to full production, or close to it. Perhaps there is an offsite location they have researched in the past. You have to engage them to help you, and put together the plan of restoring the facility as soon as possible to get it up and operational again.”

Once a plan is established, Lafayette recommends that competent adjusters take on the role of quarterback when managing the details of a large commercial loss.

“Loss adjusters not only adjust the claim, but also they manage a panel of experts, such as outside building consultants, engineers, and forensic accountants,” he said. “Depending on the size of the loss, you may want to have more than one adjuster working the loss with you. The goal is to ensure that there are as many people on the ground as possible to get the insured back to pre-loss as soon as possible.”

Lafayette also had advice about how to handle those heated moments that adjusters know all too well, the ones in which policyholders can get overwhelmed by the stress of the situation.

“The best way to avoid a difficult policyholder is to not be confrontational, but rather keep the process moving forward in a positive fashion,” he said. “If that doesn't work, then just let the insured vent and get the problems off his chest. Most of the time that decreases the stress level and then we can get back on track and moving forward.”

Despite the challenges he faces in his day-to-day work, Lafayette said adjusters should not be expected to know how to handle every encounter right away. In fact, the learning process never ends.

“Every day brings something new,” he said. “You could be working on a $50 million gas turbine loss in the jungles of Mexico, or you could be in the Midwest handling hundreds of millions of dollars of damage from a fire or explosion. I never thought that after 36 years I would still be learning new things, but I am.”

Here are some additional tips that Lafayette says will help commercial claim adjusters.

Find the decider. “If you identify who the decision makers are and have them become part of the process, you generally end up with a good result at the end.”

Know your strengths. “When a loss involves a substantial business interruption or loss-of-sales claim, I recommend retaining an outside forensic accountant to keep the analysis independent from the adjustment process, in case there is a dispute.”

Remember the Golden Rule. “One of my previous managers said that if you treat everybody throughout your career the way that you would want to be treated, you will be a great adjuster. I still believe in that philosophy.”