A good rule of thumb for all adjusters is to never underestimate the importance of liability as a critical element of the claims investigation. Beyond the potential accuracy improvement in indemnity payments, there is a dramatic rise in subrogation potential. It is estimated that 15% of all claims are closed with a missed subrogation opportunity at a cost to the industry of $15 billion dollars annually.

When it comes to the actual bodily injury evaluation, there are also key elements that adjusters need to focus on when completing their investigation. First is the relationship between the accident and the injury. For example, an adjuster may need to ask, “Just how did the sideswipe accident cause a disk herniation at L4-5?” or “How did the $500 dollar bumper ding result in the need for a spinal fusion?” These may seem like basic questions, but they are often not asked during the course of the claim.

This aspect of the investigation requires an insatiable curiosity by all adjusters. There are cases where some adjusters will accept what is presented by the attorney and take the path of least resistance by simply trying to negotiate down from the attorney demand rather than arguing the facts.

When an injury is identified in an auto claim, the first course of action should be to examine the vehicles. Telltale signs such as principle direction of force, metal deformation or striations can provide key clues to the veracity of the injuries being alleged. In any auto claim it is important to get detailed photographs of all vehicles, from all angles, with photos that depict all damage. A good photograph will show the damage in relation to the other parts of the car. Pictures should be taken from angles, front to rear and rear to front, and then straight on. Photos should never be close up, unless there is some key piece of evidence, such as hair in a windshield crack.

Attorneys don't like to argue causation because that is often the Achilles heel of many claimants. In a country where the AMA estimates that 80% of Americans will suffer back pain in their lives, causation is a very legitimate concern in virtually any claim where back problems are being alleged.

The next consideration is the veracity of the claimant. Certainly there are many claims in which accidents do occur and injuries are legitimate, but this is not always the case. According to the Insurance Research Council, insurance fraud and buildup accounts for 13% to 18% in excess auto claim payments annually. Just turn on your TV to see advertisements from a multitude of attorneys promising lucrative settlements if you have been “injured” in an accident.

Critical to quality of investigation is the building of a profile on the claimant. Has the claimant had prior claims? If so, when? How many? Was he at fault? Did he receive payment? What were the prior injuries? It often amazes me how many claimants have prior serious accidents in which they were at fault, but claimed no injuries. But when they aren't at fault, even in low impact claims, they suddenly have a myriad of problems that are all related to this once incident. It is this type of detail that will sour a jury on a claimant. It is also this type of information that will inspire adjusters to dig for more information.

It is critical to look at criminal records. Does that claimant have prior felonies? But don't limit that to the claimant, as having an insured with a criminal record can pose just as many problems for the insurance company as a felonious claimant does for a trial lawyer. I recall a claim years ago during deposition where the defense attorney asked the claimant about his prior sexual battery conviction. After a quick kick under the table, I reminded the attorney that it was our insured who had the conviction and it was for a very good reason we were trying to settle this prior to trial. Of course, some information may not always be admissible. But then again, it may. Just like a good poker player effectively plays the cards he was dealt, so too, does the highly effective adjuster.

Consider the claimant's financial profile. After all, if this case heads to trial you may very well be put in a position of filing a Proposal for Settlement, Offer of Judgment or whatever your jurisdiction will allow. In essence, this can act as a loser pay law entitling the carrier to defense attorney costs with the right outcome. If the claimant is judgment proof, this becomes a far less powerful tool than if your claimant is collectible. While most claims don't go to trial, it is a very effective tool to leverage in negotiations with the attorney, who is duty bound to take all offers to the claimant.

Look at the claimant's professional licensure. In many states, such as Florida, licenses are required for many occupations. I recall a claim in which the claimant was an exotic dancer, and yes, a city occupational license was required. With this knowledge, surveillance was ordered, exotic dancing was observed and the case went away almost instantaneously. This can be powerful information when professions involving physical activity are known.

Request a 20-year medical history. During my tenure as an adjuster, this was one of the first items requested in response to a letter of representation. Always provide a medical authorization, and the offer to do the search, as well. While attorneys won't likely take you up on it, the proactive approach reflects an exercise in aggressive good faith claims handling. The reality is that if there is a history, it will be discoverable should litigation ensue.

Never forget to check on the status of the both the plaintiff attorney and treating providers. This can usually be done through the Secretary of State or appropriate governing body in your jurisdiction. Look for prior disciplinary action and make sure that licenses are in good standing.

Research neighbors and known associates who can provide powerful testimony. Arguably, some of my best character witnesses over the years were ex-spouses who are often open to sharing a multitude of details, including pre-existing conditions and their causes. Neighbors can also be a great source of information such as if the injured party routinely does yard work.

Once the veracity of the claimant has been established, there will be a need to evaluate the claim for special and general damages. Again, the complexity of the investigation will vary based upon the type of claim being presented. Some key aspects of the medical bills will be to identify what is reasonably related to the accident.

There is no shortage of “games” that can occur, such as upcoding, unbundling, modifier abuse or improper use of global surgical edits. Medical coding is very complex and requires significant training to become a certified coder. Certainly basic information is available to adjusters, such as benchmark pricing, but that does little good if the provider has manipulated the bills in other ways. Arguably, the best tool for the adjuster is software, such as Decision Point or Smart Advisor, which can provide significant insight into what billings are allowable and what treatment and duration were reasonable.

Beyond the medical specials will be claims for lost wages, transportation or household replacement services. Again, it will take a lot of investigation to determine what the real damages were, especially among the self-employed. Always request a copy of the most recent Schedule C from the claimant's income tax return. In some instances, there will be resistance to releasing this information, which can be a red flag. The same goes for replacement services and transportation. Just because your son drives you to the doctor does not mean that you are entitled to reimbursement. To understand what is owed requires digging into case law in your particular jurisdiction. The insatiably curious may go so far as to ask the claimant for the route traveled to a description of the clinic, the nurses and the doctors.

Once the specials are evaluated, the generals will need to be considered. This is an area that is very subjective and often inconsistencies arise even within workgroups. Let's face it, if you give the same claim to 100 adjusters, you will likely get 100 different outcomes. Some will be accurate, some low, some excessive. Herein lies the need for carriers to arm their adjusters will tools such as ClaimIQ. This tool is developed as a knowledgebase, derived from the best practices of the best claims personnel in an organization. When utilized, the tool will replicate this behavior of best practices enterprise-wide, resulting in more consistent and accurate evaluations, negotiations and settlements.

While this provides just a short overview for dissecting, investigating and evaluating BI claims, it should be noted that no two claims are alike. As a fiduciary, adjusters are responsible for evaluating each claim based upon its own individual merits.