Contents is another beast altogether. Take a moment right now to consider all the contents of your current residence: the appliances, furniture, electronics and computers, clothing and apparel, books, DVDs, CDs, exercise equipment, and so on. It's an avalanche of possessions. The more you think about what is stashed away in cabinets and closets, the basement, and the attic, the bigger the avalanche gets. As a claim adjuster, it's your job to achieve a fair settlement, which requires an accurate inventory of everything that has been lost or damaged.

Once you have the inventory, each item must be valued properly. This seemingly daunting and tedious task is made worse by the inevitable presence of specialty items. Whether you're talking about an Antiques Roadshow-worthy painting, or more commonly, Grandma's favorite porcelain teacup collection, a Mariano Rivera rookie baseball card, or a vintage rock concert poster from the 1970s, virtually every claim has specialty items or other items insureds believe are rare and valuable.

Whether a loss is large or small, specialty items may often be the culprit behind snags, delays, and points of contention. The good news is that innovations in contents claims processing are helping to speed fair and timely resolution of these claims.

A Fact of Life for Adjusters

Specialty item appraisals have traditionally been considered the domain of high-end carriers servicing high net worth individuals. It is true in that such carriers encounter trappings generally regarded as difficult to value more frequently. However, have you ever been tasked with valuing a chipped Hummel figurine, an antique rifle, a collection of Native American arrowheads, or an unbranded pocket watch? Regardless of what you call it, claim adjusters routinely come up against a few items of this type in nearly every contents claim.

Innovative carriers are now using the same expertise, best practices, and services initially built for high-end claims to handle the challenge presented by specialty items throughout all property claims. This is good news for claim adjusters who are regularly challenged with valuing unique items outside their scope of subject matter knowledge and experience.

Let's take a closer look at a few real-life challenges faced by adjusters and how specialty contents resources can improve valuation accuracy and customer satisfaction.

Hummel Makeover

A contents specialist received an assignment to consult on a claim involving an elderly insured, whose pride and joy was her 36-inch-tall jumbo Hummel. The insured was disheartened when her beloved Hummel suffered a chip. The contents specialist's research determined the now out-of-production Hummel was worth an upwards of $30,000. The adjuster had a choice between issuing payment for the full replacement value or using the content specialist's expertise to determine if the figurine could be repaired. The adjuster decided on the latter course and quickly learned both to the surprise and delight of the insured that the treasured Hummel could in fact be repaired and restored.

The specialist identified the best conservator for the task, and arranged the fine arts shipping of the item. The total cost for restoration, including transportation, was $3,476. At the carrier's request, the contents specialist evaluated diminution of value after conservation at 10 percent ($2,990), for a total payment to the insured of $6,466. The specialist provided counsel every step of the process. The insured appreciated the carrier's efforts in supplying the specialist, which she perceived as value-added treatment. The claim adjuster was able to achieve the claims world Holy Grail—enhanced customer satisfaction while mitigating the loss.

The Golden Spike

An adjuster needed to determine if a miniature “golden spike”—made as a commemorative rendition of the original used on May 10, 1869 to join the Union Pacific and Central Pacific tracks that created the first transcontinental railroad in the U.S.—could be worth the $3,000 claimed. The insured, a train enthusiast, claimed he acquired the spike in 1979 when he purchased a special edition “golden spike” rifle Winchester made in 1969 to commemorate the 100th anniversary of the historic joining.

Lacking the time and resources to research and authenticate the pedigree of the golden spike in question, the adjuster consulted with a contents specialist firm. At the time of the loss, gold bullion prices were around $950 per ounce for pure 24-karat gold. Because the item had been stolen from the owner, inspection of the spike was not possible. The insured, however, estimated that the spike weighed approximately three ounces; was about four inches long; and about a half-inch square, with a sharp tip and a broader top. It was essentially a smaller version of a real railroad spike.

The specialist knew it was extremely unlikely that 24-karat gold would ever have been used. Calculations determined that value based on three ounces of more common 14-karat gold would have an approximate value of $1,700. Based on the dimensions provided by the insured, and given the density of gold, the specialist quickly calculated that the resulting volume, if it were solid gold as claimed, would result in the spike weighing in excess of half a pound—almost three times the insured's estimate. The facts were not adding up. The insured's claimed value began to appear optimistic.

Through research, the specialist determined that Winchester did issue a commemorative rifle, though without any accompanying “golden spike.” Research further revealed that another manufacturer, Colt Industries, had also issued a golden spike commemorative pistol in 1969 that came in a presentation box along with a commemorative golden spike. After checking further with gun dealers and dealers in historic memorabilia, it was determined the Colt spike did match the size and description provided by the insured. Based on the details, the contents specialist concluded that the golden spike at issue was most likely one of the Colt spikes. That spike, however, was not solid gold as claimed. Instead, it was clearly identified as gold plated, and the value of the spike on its own was determined to be $35.

The Balancing Act

The Hummel makeover and golden spike cases show that, for most contents claims challenges, one-size-fits-all technologies won't cut it. Adjusters need quick and easy access to a variety of technology tools and specialty services every day to efficiently handle and adequately address the full range of contents claims challenges they encounter.

Gaining access to a comprehensive contents database can provide adjusters and carriers with a solid foundation for beginning the process. Adjusters need to be sure that such databases are updated continuously and are accessible on demand via the Internet. When, however, an adjuster comes upon a claim for a family heirloom—a Civil War officer's sword, for instance—he then requires easy access to contents claims specialists who can quickly assess the item's authenticity and value.

The sword thought to have been carried by an ancestral relative at Gettysburg might be the only unique item on the claim, but if an adjuster lacks access to specialty services, this one item could derail the entire settlement process. Even if such a sword could be found in a contents database, the database itself is incapable of performing the research that could determine if the sword is actually a World War I-era German naval sword of marginal value. The database will likely not provide the adjuster with the quality report to gently explain to the family that “Grandma was mistaken.”

Owners do have emotional attachments to their unique items. Insureds may question your adjusted replacement value of a toaster oven, but get the values wrong on the few items they are passionate about, and you may find you have unnecessarily complicated the entire settlement.

For this reason, it's crucial for claim adjusters and carriers seeking to improve the contents claims process to adopt strategies and solutions with the built-in flexibility, agility, and expertise to adapt to the unique challenges of each claim. Ultimately, your strategy should incorporate a number of different elements, including:

Self-service for small claims. For small claims of 20 items or less, offer the insured multiple means by which to submit his inventory. In addition to traditional paper submissions, provide phone and Internet access for submitting inventories. Not only does this empower insureds to choose the method they are most comfortable with, but it also allows them to work on their claim when convenient for them. This frees up adjusters to focus on more complex claim challenges and tends to decrease cycle times.

Field inventory specialists for larger losses. Instead of relying on insureds to produce an accurate inventory on larger losses or tying up adjusters with this task, assign inventory creation to inventory specialists. This allows adjusters to leverage their time while a specialist efficiently handles the avalanche of contents, entering inventory items into a database that quickly assesses value. Moreover, when field inventory specialists and adjusters come upon the inevitable hard-to-value item, it can be escalated to people with the requisite expertise while the entire process continues moving along efficiently.

Contents claims specialists for hard- to-value items. Contents claims specialists are needed when unique items are encountered. Having human resources on call who specialize in researching and assessing the value of unusual items can save everyone time, money, and headaches. Customer satisfaction can be further enhanced by having subject matter experts coordinate conservation and restoration services. Such services can have the added benefit of mitigating losses, as illustrated earlier.

Scalability and Customer Choice

By now you're wondering how you can afford to provide such a wide range of contents claims solutions and services. Building this entire infrastructure in-house would be very costly, even if the required expertise was available. The good news is that third-party providers that focus exclusively on contents claims challenges have developed such solutions.

These solutions can be adapted to meet the needs of adjusters, carriers, and their insureds in a way that is sustainable and scalable. More importantly, they can help carriers realize significant improvements in the accuracy of settlements while completing claims in days rather than months.

Such an approach will enable carriers to adapt to the era of customer choice. People today want and expect options. Carriers that implement more agile contents claims strategies will be able to accommodate everyone, from consumers seeking renters' insurance, to high net worth individuals seeking to protect rare valuables.