Listen, Learn, and Be Ethical

A claims professional settles an auto liability claim with an unrepresented claimant for an unbelievably low amount, and the crowd goes wild. He is the envy of his fellow claims professionals and high-fives are spread around the office. How on earth did he get the claimant to accept such a number? The claims professional is on cloud nine—until his supervisor sits him down to discuss the situation further. Doubt enters his mind as he hears, “Wow, that was a really low number to settle this case. Did we pay what we owe?”

An Ethical Line in the Sand

The phrase “All that glitters is not gold,” popularized by Shakespeare, speaks to this type of settlement that claims professionals undertake directly with a claimant—a situation that just doesn’t feel right inside. How do we balance paying the lowest number possible with making the claimant whole and paying a settlement that is fair for both sides? Taking advantage of a claimant’s lack of knowledge, unfamiliarity with negotiations, and need for money is not ethical in the adjusting world, and while this isn’t an overly common occurrence, it is something we need to be mindful of as claims professionals.

Some claims personnel would say that they prefer an attorney-represented claimant over dealing with one who is not represented. It’s true that a lot of time is spent on explanations, education about the process, building trust, and knowing that it may all be for naught—months of time and effort can go down the drain as an attorney promptly ends your previous negotiations and is less motivated to work quickly on his new case. However, there are steps claims professionals can take with claimants to avoid this scenario and work toward an amicable settlement for both sides.

First, it is important to be prompt and courteous from the start. Establish timely contact and explain the process clearly and with set expectations. Empathy goes a long way, and letting the claimant know the lines of communication will always be open builds trust.

Next, consider the situation from the claimant’s perspective. Each morning, they walk out to the car and see the damage; it’s a constant reminder of the loss and the accompanying frustration. The anger may be directed at the insurance carrier when calls are not returned immediately or at all. Placing yourself in claimants’ shoes will help you understand where they are coming from, and you can show them you are there to try and put this event behind them. A personal rapport will go a long way when you are asking for cooperation (for example, when you request a medical authorization to order records, or to move the car from a storage facility).

To get a better handle on your claimant’s status, check in continually and don’t let too much time pass while she is actively treating. If you’re going to take longer to reach out to her, let her know when she can expect a call. Always start by asking how she feels and show empathy, which will more likely lead to a substantive update from the claimant.

When the situation calls for it (and claimants have revealed that their treatment has ended or is limited), you can consider a settlement in light of the expenses. However, if they indicate that they are still in pain or have questions about treatment, it is best to reiterate that they should fully seek any medical care they need because once a release and a check are issued, the process is over.

Strategy for Success

To achieve success, claims professionals should focus on the “three Ts”: trust, transparency, and time.

The trust factor is crucial when dealing with an unrepresented claimant. Did you call her back when you said you would? Did you provide appropriate customer service and order her records in a timely manner? Have you updated her throughout the claims process, and have you delivered on promises?

The next “T” is transparency. Have you articulated everything she needs to know? Are you hiding any key details? Did you withhold the fact that she is welcome to seek medical attention, or that she has the option to get a rental car while hers is in the shop? Are you fully explaining how you came up with your settlement offer and why it applies to this case, given the specifics?

Make sure to use words that are generally understood. Reporting that the claimant’s MRI notes degeneration and disc desiccation may not be fully comprehended. Perhaps this is a pre-existing condition that was made worse by the accident. There is still pain and suffering, inconvenience, and the time it will take to get back to how she was feeling prior to the accident to discuss.

Be transparent on how you package your settlement offer and encourage the claimant to ask questions. Her first instinct may be that the insurance carrier is trying to pull a fast one, so show that you are an open book and your evaluation is well thought out with numerous considerations. Remember to actively listen to her concerns.

Finally, the release closes out the claim, so be sure that the claimant knows that once the release takes place, she gives up consideration to pursue anything further against the carrier or insured.

The last “T” is time. There is a lot of time involved in a claim, and you must treat the claimant with kid gloves. Perform to the best of your abilities, and you can settle the claim for a fair amount for both sides. If the claimant runs to an attorney, then you may not necessarily pay more to settle the case, but the process will drag out. Ultimately, that leads to more expense dollars and a file that you will likely be working on for two years with an attorney when you could have settled quickly with the claimant.

When They Say….

Following are some claimant statements that you may run into, along with tips on how to respond.

“The settlement number is too low, I know I can get more if I have an attorney.”

The worst response would be telling her, “Get a lawyer and risk losing a third of your settlement.” That response is confrontational and insinuates that the claimant is inept and does not understand she will lose money if she obtains an attorney. It can turn into a direct challenge for her to go out and get one just to prove you were wrong.

The truth is that, in some venues, the attorney may be able to get more, but usually the injury value remains the same and the additional expenses will cost the insurance carrier moving forward. Defense costs, experts, surveillance, and medical record reviews will rack up costs, and those are real dollars to the carrier.

A less confrontational approach would be to advise that your offer was based on an evaluation of the claimant’s medical records with many factors considered that you can explain further. Let her know that she can consult with an attorney if she wishes regarding the value, but that if she does obtain one, you would no longer be able to communicate with her directly.

Additionally, you can gently remind her that most attorneys will take a percentage of the settlement and often the process takes longer to resolve. However, note that it is her absolute right and that she should take time to think about how she wants to proceed. If she wants to consider the offer and then set a date to speak again about her concerns, that is an option that can provide clarity.

“You said that your offer took into consideration the amount of treatment I had. I think I may need more treatment, so can we discuss a new offer?”

The claimant is hearing that you are only basing your offer on the number of visits she had. Advise her that there are many factors involved, but if she feels the need for more treatment, then that is what she should do to feel better because that is the number one concern. Show empathy that the injury and healing is at the forefront and the settlement is secondary. Advise her that you can diary the file for a few months and then she can check back in once she has received the treatment she needs to feel better. Set a time when you can speak again in the next few months.

Typically, a claimant who is just out for more money will end that right away and say she does not need more treatment but would like a higher number to settle. Again, it is paramount to show that you are not trying to rush her through a settlement. She may just want you to understand that she had more pain and suffering than she believes you are giving her credit for.

“I had to take a day off from work to go pick up the police report [or an associated inconvenience] and I want to be reimbursed for my time.”

Whether you want to consider additional costs to lock down a settlement is dependent upon your standard work. The claimant can submit further documents to validate her new demand, and you can add onto your offer as you see fit as more facts come to light through discussions. Just remember that an open claim becomes more expensive each day that it drags on.

As claims professionals we all feel the need to settle a claim for the most competitive number possible. But we need to remember to always use honor and fair dealing with unrepresented claimants.

Ethical claims settlements come from experience in negotiations and values as well as open communication. If it doesn’t feel right, then it probably isn’t. Conversely, if it seems too good to be true, it probably is. If, as a claims professional, you feel something is off, then take a second look and remember not to waiver from your ethical responsibilities