In: Operations Management
claims handling process:
Assume that you are the claims adjuster for ABC Auto Insurance Company.
Describe what the text states that you should do in each step to settle the following claim.
Bob calls ABC and states that he is an insured. His car was struck from behind by another car driven by Frank. Frank tried to flee the scene in his car but he was drunk and crashed the car into a tree about 100 yards from where your car was damaged. Frank was arrested at the scene by the police.
Assuming that I am the claims adjuster for ABC Auto Insurance Company. The case is about the car accident of Bob by the Frank who was drunk.
The steps I would follow are as follows:
1. Gather the Insured Story: I will read any written police report or accident report that the insured may have sent to the insurer, and may talk to the insurer to hear the insurer’s story firsthand.
2. Investigate the Bob.
3. Request Documentation of the Claim- I will write the plaintiff or the plaintiff’s lawyer to introduce Bob and request that the Bob provide documentation relating to the Bob’s claim. The documents such as medical records, medical bills, proof of earnings, tax returns, and proof of property damage. If the initial medical records indicate that the plaintiff may have had prior injuries or complaints to the body part that was injured in the accident that led to the current claim.
If the bob is self-employed and claims lost earnings, I will usually request that to produce business records to document the lost income.
4. Review Documentation Meticulously-I will go through the documentation on the case with a fine-toothed comb. The adjuster will read every page on the medical records and bills to see if anything is missing, if anything suggests that the Bob has had prior conditions or that the Bob is malingering, or if the Bob’s lost earnings claim seems to have holes in it. I will not make settlement offer and will not respond to a settlement demand until I have every document that he needs in order to value the case.
5. Determine Settlement Value- Once I have all of bobs medical records and bills and all of the other information that needs to value the case, I will put a value on the case. And then I will decide what the plaintiff’s chances of winning are, I will think about the bob’s damage claim.
6. Determining the Value of a Pain and Suffering Claim- This is the real struggle for me. But for this I use formulas and specialized software to assign a value to pain and suffering claims.
7. The First Settlement Offer- Once the Bob has arrived at a settlement value, then I have to decide what to offer. The first offer is going to be a percentage of what the Bob thinks is the final value of the case, and, again, an insurer’s software may dictate precisely what the first offer should be. The important point here is whom I am dealing with. If I am dealing with an unrepresented plaintiff, the first offer will usually be lower than if the plaintiff has a lawyer. If I am dealing with a very high-quality lawyer, the offer might be higher than average.