Getting Claims in Control
Brokers shouldn't be afraid to get involved in the claims process and plead their client's case
Suzanne Sharma on March 1, 2011
Winter is upon us, and the snowy, slick roads can cause difficult driving conditions resulting in accidents. In fact, claims during the winter months increase by 47%, and weather-related incidents, slippery roadways and whiteout conditions accounted for over $37.8 million in auto claim payments between December 2009 and February 2010, according to Aviva Canada.
Each year, billions of dollars in claims payouts drive the insurance industry. Whether you’re a broker, insurer, adjuster, or forensic engineer, handling client claims efficiently can help retain business.
Canadian Insurance Top Broker spoke with three brokerages and asked about their philosophy on claims advocacy. All three talked about the importance of being a fair advisor for your clients by providing them with sound advice and explaining coverages.
Heritage Jones Foster Insurance
Locations: Moncton, NB, Miramichi, NB
Annual Premiums: over $6 million
Peter Johnson established what is today known as Heritage Jones Foster Insurance 13 years ago through several acquisitions and years of growth. While the brokerage is just over a decade old, the Jones-Foster brand dates back to 1906.
In early 2010, the company was sold to NSNB Insurance Group Inc. Johnson remains vice president of Heritage Jones Foster Insurance, which has offices in Moncton and Miramichi, NB (operating under Harding Insurance).
Effective claims advocacy
Johnson’s philosophy on claims advocacy is the same as selling an insurance policy–provide the type of service to clients that he would expect himself.
“You’re dealing with clients, many of which haven’t had a claim before, and don’t know what to expect. They don’t understand the procedures, so you have to do what you can to help them.”
Heritage Jones Foster Insurance divides clients alphabetically by Customer Service Representative (CSR). When a client calls during business hours to report a claim they always deal with the same CSR, which helps build a relationship and develop a level of comfort, says Johnson.
Clients that call after business hours are directed to an independent local adjuster, instead of a 1-800 number, so they can speak to someone who is familiar with the geographic area.
Johnson recalls a time when he helped handle a claim, and the client still mentions the positive experience to this day.
Sunny Corner Enterprises Ltd., a mechanical contractor, had a total loss fire in 1999 at their Miramichi, NB office. Luckily, Johnson had reviewed the commercial client’s coverage just two months before the fire, found the client was underinsured and suggested they increase their coverage. When the claim was made, Johnson personally went to the location to meet the client and the adjuster.
“They were happy with the claims service and with us following up, and had an adequate amount of insurance,” he says. “They were up and running faster than they’d expected.”
As an independent broker, you deal with a variety of insurers and they may limit your involvement during the claims process, according to Johnson. For example, insurers may want to use an adjuster they have a relationship with, or someone employed by the insurer, thus preventing the broker from using an independent local adjuster.
Despite this, brokers can still deliver solid customer service. He suggests walking the client through the process, and explaining their coverage (e.g. for an auto accident, tell them what their limit is for a car rental and how long the process could take).
“Also, follow up,” he says. “Call the insurer to make sure the client was contacted in a timely manner, and call the client to see if they have any additional questions.”
Johnson stresses that brokers shouldn’t be afraid to get involved, and if you feel your client has been mistreated and isn’t getting what they should, then call the insurer or claims manager directly.
He offers advice he once heard from a broker consultant. “People buy insurance from you for years and years, and don’t have any problems, and may think you’re just taking their money. But when they have a claim, that’s your chance to dance. Show them that everything they’ve paid over the years is worthwhile, and that’s why they’ve stayed with you.”
Locations: Shediac, NB, Saint-Antoine, NB, Bouctouche, NB
Annual Premiums: undisclosed
Established in 1948, Assurance Vienneau is a third-generation family-owned company that is primarily French-speaking. It is a P&C brokerage (95%), but has always maintained a small life insurance department.
Marc Leger assumed the role of general manager in 2005 when his father Jean-Claude partially retired. In 2009 he became president while his father still holds the title of CEO.
Effective claims advocacy
“Proper claims advocacy follows a thorough round of homework including listening to all sides of the story, double-checking all pertinent policy wordings, and calling upon an independent adjuster who is removed from the situation for their opinion,” says Leger.
The company aims to be the first call their clients make when faced with a loss because it is a chance to further solidify relationships, and provide sound advice.
“We want to lend a sympathetic ear to our clients following the unpleasant experience that leads up to the claim, all while collecting the information required to fill out a Notice of Loss,” he says.
Next, Assurance Vienneau prepares clients for the claims process, and goes over their policy, including limits and deductibles. This minimizes the chance of unpleasant surprises once the adjuster contacts them, according to Leger.
“We then let the adjuster and appraisers do their job, but follow up with the client a day or two later to see how things have gone.”
The growing trend of clients using the Internet for claims advice creates misinformation, confusion, and frustration, says Leger.
“Google will point you to all kinds of websites and discussion forums on insurance and claims where the information and advice provided is not always from expert sources, or isn’t relevant to our country.”
There’s no shortcut to deal with this obstacle. Instead, Leger suggests spending time going over policy wordings, and showing the client that what they’ve seen and heard doesn’t necessarily apply to their situation.
Being faced with a tenuous situation between a client and an adjuster is another challenge, and you must tread carefully because you want to maintain relationships with both, says Leger.
For example, the claims adjuster may be confident in their interpretation of the policy wording, while the client feels their written-off car is worth more than what is being offered.
“You’ve got to pick a side based on your homework, and someone’s ego is going to get bruised,” he says. “I’ve found that if you come in prepared and lay out your findings in a diplomatic and respectful manner, you generally get good results.”
“The challenge is not to get pulled into giving your opinion and setting expectations before the adjusters and appraisers get the opportunity to do their job,” advises Leger. “Our respective roles and duties should be complementary to one another, and not overlapping if we want to avoid problems.”
Directors Global Insurance Brokers Ltd.
Location: Toronto, ON
Licensed Staff: 3
Annual Premiums: under $5 million
Directors Global was formed in late 2007 and has strategic alliances with Hugh Wood Canada Ltd., SCM Risk Management Services Inc. and BPS Resolver. President Stephen Mallory has high hopes for the young company, focusing on commercial insurance and risk management services. Claims handling is also an important part of how he is shaping the business.
Effective claims advocacy
For Mallory, good claims handling means ensuring the policy language is clearly and fairly interpreted. Brokers must use their experience with policy wordings, previous claims, court appearances, and in relationships with insurers, adjusting, accounting and forensic firms, he adds.
“We ensure that proper documentation is reported to the insurer in a timely fashion. When the claim appears to have some complexity, we jump in to advocate for the client.”
One recent case the brokerage dealt with was a slip and fall loss at a condominium corporation. The claim had been denied due to late reporting by the previous broker. Directors Global employed a specialty adjusting firm, and resubmitted the case stating the client had responded appropriately and followed proper claims reporting guidelines. The insurer then determined that the client had acted reasonably, and denying the claim because of the previous broker’s actions would be unreasonable.
“We used our experience to piece together an argument that advocated in favour of the client, while staying within policy guidelines,” says Mallory.
Responding to claims requires different actions based on frequency and severity, says Mallory. Brokers must find the balance between overseeing the clients’ direct reporting to the insurer for smaller, high-frequency claims (e.g. a chipped tooth claim from cereal products), and getting involved in severe claims (such as food poisoning from contaminated products) to ensure the client is being properly served, he says.
“The broker needs to work side-by-side with the client to ensure proper claims procedures are followed, such as providing the adjuster with timely information, and ensuring the client hasn’t jeopardized the insurer’s rights, potentially impacting coverage. At the same time, the broker must cooperate with and assist the insurer to ensure that its rights are preserved.”
When it comes to grey areas in claims, which happen often according to Mallory, the broker has to remember they are appointed by the insured. However, the principle of utmost good faith requires that the broker represents all parties with honesty, integrity and transparency at all times, he adds.
“The broker’s duties require that they push hard to support their clients, even if it means constructively arguing contrary to an insurer’s position. In those cases, provided the broker has acted reasonably, the insurer should recognize good judgment and reward the broker by maintaining a long-term relationship. Sticking with an experienced broker with loyal clients means, in the long run, the insurer more than makes up for a loss which has been settled through constructive debate from all parties.”
“A lot of respect can be gained by being close to both the client and the insurer throughout the entire claims management process. It is the true mark of a seasoned broker to be able to bring both parties together to satisfy all interests in a large and complex claim.”
Seasonal Prevention Tips
Safe winter driving
- Drive slowly and keep a safe distance behind the vehicle in front of you.
- Invest in snow tires and new windshield wipers. Snow tires allow drivers to stop up to 40% faster than all-season tires.
- Pack an emergency kit and stow it in your trunk. It should include a flashlight, blanket, snow shovel, extra windshield washer fluid and anti-freeze, hazard flares and booster cables.
- Check road conditions before getting behind the wheel and allow for more time to reach your destination. If you don’t need to be on the road, stay at home.
- Program the number for a tow truck company into your cell phone.
Safeguard your home while away
- Make sure all doors and windows are locked.
- Store valuables in a safety deposit box.
- Use timers to automatically turn lights on and off.
- Leave curtains and shades open.
- Put a hold on newspaper subscriptions.
- Have a neighbour or friend pick up mail, cut the lawn and occasionally enter the home.
- Never indicate that you’re not home on your telephone answering machine, or on social networking sites. It may seem harmless, but it could alert would-be thieves to an empty house.
- Unplug everything and make sure appliances are turned off.
Source: Aviva Canada
Copyright 2011 Rogers Publishing Ltd. This article first appeared in the January 2011 edition of Canadian Insurance Top Broker magazine.