Several different types of people participate in claim handling, depending on the circumstances. They are: -
· Staff Claim Representatives (inside and outside)
· Independent Adjusters
· Agents
· Public Adjusters
Staff Claim Representatives
A Staff Claim Representative in an insurance company performs some or all of the insurance claim handling activities.
An inside claim representative is an employee who handles claims that can be settled, usually by telephone or letter, from inside the insurer’s office. They handle claims that are clearly either covered or not covered and that do not involve questions about the circumstances or validity of the claim. If a third party is involved the inside claim representative might use a tape recorder to take statements about the loss from the insured, the claimant and any witness after obtaining their permission to tape their statements.
An Outside claim representative (field claim representative) is an insurance company employee who handles claims that cannot be handled easily by phone or mail. They spend much of their time visiting the scene of loss, intervene witnesses, investigating damage and meeting with the insureds, claimants, attorneys, and other persons involved in the claim.
Independent Adjusters
They are independent claim representatives who offer claim handling services to insurance companies for a fee. These independent adjusters can be either self employed or work for an independent adjusting firm.
Agents
An agency usually receives the first notification of a claim. Depending upon the size of the office, the agency can have one person, several people or a department responsible for handling claims.
If an agent has a draft authority, he or she might actually settle claims.
Draft Authority is an authority expressly given to an agent by an insurer to settle or pay certain type of claims by writing a claim draft upto a specified limit.
A Draft is similar to a check, but it requires approval from insurance company before the bank will pay it.
Draft Authority is given to agents because insurance companies have found that allowing agents to handle small or routine claims results in both expense saving and increased goodwill. Since agent is a person who gets all the relevant information about the claim the delay and expenses involved in contacting the insurance claim staff are eliminated. This results in reduction in the claim handling expenses both by the agent and the insurer and it contributes to more competitively priced product.
Public Adjusters
A public adjuster is a person hired by the insured to represent the insured in handling a claim. Usually insured hires a public adjuster either because of claim is complex in nature or because of loss negotiation are not progressing satisfactorily.
CHAPTER: 6 CLAIMS
