5 Things Insurers Need to Know About Avoiding Bad Faith

Posted on

August 19th, 2019


No legitimate insurance adjuster sets out to commit misconduct that could constitute bad faith. However, the expenses associated with bad faith lawsuits and the upswing in legal action are strong indicators that insurers need to reconsider the economic implications of bad faith for their company. Knowing what constitutes bad faith and how to avoid it can save legal headaches and a significant amount of money.

Understanding Bad Faith

Every state has its own set of laws governing the minutia of bad faith lawsuits. However, the majority of states define bad faith as a combination of negligence and deliberate misconduct. Most states determine if negligence occurred using a simple and objective analysis to determine if the insurance provider behaved in a way that was unreasonable toward the customer.

The second element of bad faith is establishing whether the company behaved unreasonably on purpose. It’s important to note that negligence alone is not enough to establish bad faith. Accidents happen and employees can make mistakes unwittingly.

5 Practices that Can Result in Bad Faith Claims

The following are examples of behaviors that can result in bad faith lawsuits. Insurance providers need to take all possible steps to ensure these behaviors do not occur to avoid costly litigation:

  1. Delaying, disregarding, or denying payment without a reasonable basis for doing so
  2. Failing to reply within a reasonable time frame to a notice regarding a new covered claim
  3. Neglecting to perform a swift, unbiased, and realistic assessment of damages and rightful settlements to insured within a reasonable period, especially when liability is clear
  4. Attempting to offer a settlement far less than what a reasonable person would believe is acceptable or attempting to undercut a claim’s severity, forcing the insured to file a lawsuit
  5. Requiring the insured to provide a burdensome amount of documentation that their policy doesn’t require

Again, none of the above can constitute bath faith on their own basis without the insurer intentionally doing so. However, the behaviors are enough to initiate a lawsuit regardless, and it’s better to avoid going to court whenever possible.

Acting in good faith should be a guiding principle for all insurers and having a solid claims management system in place can help achieve that goal. Contact the experts at Actec to learn how we can simplify and improve your claims management processes.

Enhancing Claim Intake, Management, and Closing Efficiency

Posted on

July 8th, 2019


Closing a claim is an insurance adjuster’s primary goal for any file that crosses his or her desk. The insurance industry expects no less, either. Insurers and policyholders alike want a claim assigned, investigated, and closed as fast as possible. When claims linger, customers grow frustrated and retention rates decline.

Owner vs. Employee Mentality

However, many adjusters seem to struggle with closing claims rapidly. One reason is that some adjusters have an employee mentality over an ownership mentality. There are several legitimate reasons that can stall a claim such as an insured client not providing information or an outside service such as an auto repair facility not communicating well. Adjusters with an employee mentality will wait for the information to come to them. Adjusters that take ownership of their claims will seek out that information for faster claims resolution.

Give up the Myth of Multitasking

A common trend on job applications is to include “excellent multitasking skills.” However, multitasking as an adjuster can lead to errors as well as bring workflow to a halt. For example, when adjusters try to gather data following first notice of loss (FNOL) for multiple claims at once, they run the risk of mixing up claims or recording incorrect information. This will require more time later on to undo the mistakes in order to close the claim.

Instead, adjusters should give single-tasking a try, which is focusing on bringing one task to completion before moving onto the next without distractions. This means:

  • Turning off message notifications on computers and on cellphones
  • Avoiding checking emails while working on a claim
  • Turning off podcasts, webinars, and anything else that requires the adjuster to be an active listener
  • Putting up Do Not Disturb signs around workspaces to ensure no interruptions

Making these two changes can do wonders for improving insurance adjusters’ workflow and time to resolution for claims. Of course, a vital aspect of ensuring that claims process in a timely manner is excellent FNOL intake. FNOL represents the single greatest opportunity to secure a customer’s satisfaction as well give the claim a favorable start. Contact the experts at Actec to learn how we can improve your claims process.

4 Soft Skills Insurance Representatives Need to Succeed

Posted on

February 18th, 2019


Insurance customer service representatives have to familiarize themselves with the entire claim cycle from first notice of loss to claims resolution. However, knowing the ins and outs of the industry doesn’t mean an agent will automatically do well at his or her job. Insurance representatives need to possess a number of soft skills to succeed. Some of the more desirable soft skills include:

  1. Internal communication and teamwork. Representatives need to be able to communicate effectively with internal staff as well including coworkers and management. This allows them to express needs or challenges that are preventing customers from receiving the best possible care. In addition, good communication skills means being a good listener as well to fully understand the customers’ needs. Similarly, teamwork is vital for successful customer service. When representatives work together, they can find creative solutions for common problems as well as develop strategies that play to each other’s strengths.
  2. Conflict resolution. Customers approach insurance representatives with a multitude of problems. Many situations require creative solutions so insurance representatives need to be able to think outside of the box to solve their issues. If representatives are unable to provide a workable solution, they need to let the customer know they will reach out to management and get back to them.
  3. Efficient empathy. Customers calling in with a problem aren’t looking to hear similar stories. Trying to associate with customers by sharing a personal related anecdote is unnecessary and takes up valuable time. Representatives should be empathetic, but a simple “I know how you feel” will suffice.
  4. Remaining calm. Customers usually call their insurance provider when they need to make a claim. This means they are likely upset and will require delicate handling. Representatives need to remember the customer isn’t angry with them personally. Staying positive and optimistic can help the customer calm down and bring about a better experience for both parties.

No amount of skill can overcome a limited claims management system. If your claims processing is slow or irritating customers, Actec can help. Contact us to learn how we can help transform your claims handling processes.