181 CALIFORNIA CLAIMS ADJUSTING Ethics, Practices and Law, 4 Insurers and Adjusters, 72 The Nature of Claims, 77 Claims Evaluation and Investigation, 82 Claim Statements, 101 Subrogation and Salvage, 110 Personal Auto Claims, 125 Homeowner Claims, 165 Personal Umbrella Claims, 195 Business Claims, 197 Workers’ Compensation Claims, 235 Life and Health Claims, 242 Claim Trends, 253 iPad and Tablet Users See DEMO & Links Above Depreciation 85 CONTENTS Disability claim investigation 236 Disability, workers' comp policy 235 Accident responsibilities 127 Disaster, soliciting 34 Activity check investigation 237 Disposition of disability claims 238 Actual cash value 84 Disposition of health care claims 243 Adjuster code of ethics 8 Disposition of life insurance claims 247 Adjuster conduct litigation 47 Divisions of insurance companies 72 Adjuster contracts, shall not contain 30 E-code 20 Adjuster ethics 4 Elements of a valid claim 78 Adjuster ethics, practices and law 4 Emergency catastrophe, non-licensed Adjuster practices, better 12 adjuster 36 Appraisal 88 E-practices 20 Auto claim disposition 163 Ethics defined 5 Auto claim investigations 148 Extraordinary items, value 85 Auto claims 142 Fatal claims 98 Auto windshield damage 130 Financial responsibility laws 140 Best practices 15 First party claim 143 Better adjuster practices 12 First step, investigation of claim 77 Boiler and machinery, exclusions 232 Floater policy 167 Builder's risk coverage 198 Flood insurance 168 Business autos, lost income 231 Good claims investigation 92 Business claims 197 Harbison v. Norcal 51 Business insurance policies 197 Health care claims 242 Business liability 203 Health care insurance 240 California adjuster contract, rescind 30 High ethical standards 4 California adjuster law 29 Homeowner claim settlement 192 Claim investigation, purpose 149 Homeowner claims 165 Claim denial 88 Homeowner claims 187 Claim evaluation 83 Homeowner claims 165 Claim evaluation & investigation 82 Homeowner perils 174 Claim handling 102 Homeowners floater policy 167 Claim settlement 87 Hospital records 120 Claim statements 101 Independent adjusters 74 Claim trends 249 Independent medical examination 238 Claims adjuster statement, non-English Inland marine coverage 177 witness 107 Instilling ethics 5 Claims departments 72 Insurable interest 78 Claims investigations, good 92 Insurers and adjusters 72 Claims made & occurrence forms 209 Intentional wrongs 208 Claims process 79 Investigation of a claim 82 Code of ethics, ethics 8 Investigation of claims, first step 77 Commercial general liability forms 208 Joint and several liability 202 Common law, relies on 203 Knock for knock agreements 114 Communication 17 Last clear chance evaluation 162 Compulsory liability 136 Laws and auto claims 130 Concealment or fraud, void policy 82 Lien laws 118 Condition precedent 133 Life and health claims 240 Consent of the insured 214 Life insurance 244 Constructing a statement 105 Life insurance claim investigation 246 Damage to an auto windshield 130 Line supervisor 74 Death due to accident 86 Loan receipt 112 Deceptive or unfair practices 42 Locating witnesses 95 Defining occupation claim trends 253 Lost income, business autos 231 Medical examination 121 Workers' comp policy, disability 235 Medical forms 120 Workers' comp settlement 239 Medical information 116 Workers' compensation claims 234 Minor personal injury claims 86 Workers' compensation insurance 235 Misrepresentation 133 Wrongful death statutes 86 Moral distress 7 Nature of claims 77 No-fault insurance 126 Non-English witness 107 Non-licensed adjuster, emergency catastrophe 36 Omnibus clause 132 Online advertising 29 Ordinance and law endorsement 180 Pay on behalf clause 218 Permission to use vehicle 135 Personal auto claims 125 Personal auto policies 125 Personal injury protection 145 Personal property floaters 177 Personal umbrella claims 195 Personal umbrella policies 195 Personal vehicle liability insurance 164 Privacy 13 Professional ethics, not laws 8 Property paid, belongs to 115 Public adjusters 74 Public adjusters, surety bond 29 Release 87 Rental cars 128 Replacement cost 85 Replacement cost provision 189 Rescind, California adjuster contract 30 Right to recover 91 Risk report 99 Salvage 110 Settlement checks, payable to 135 Settlement negotiation 88 Signed statements 101 Soliciting after a disaster 34 Special business coverages 230 Special damages 97 Special item claims 191 Stakeholder 7 Stated value policy 85 Subrogation 91 Subrogation and salvage 110 Subrogation, alert 110 Subrogation, claims person 110 Surety bond, public adjusters 29 Tear out provision 185 Uninsured motorists 145 Valid claim 78 Witness locating 95 SECTION 1: ADJUSTER ETHICS, PRACTICES & LAW Ethics & Adjusters Do you think you’re an ethical adjuster? Could you prove it to a jury? What would your mother say about your practices? In the end, how will you judge your career? By how much money you made? By how many customers you helped? By what you accomplished for your family and your community? The answer lies within you. And, you are not alone if you are not 100% sure. There are many people and industries trying to grapple with the solution. The fact is, when large sums of money are involved, breaches in ethical and moral behavior are all too common and the industry of insurance claims adjusting is certainly no exception. There are many temptations for a claims adjuster since they have the ability to dictate the speed at which a claim is processed and the final settlement amount. That’s a lot of power! Insureds have been known to offer a sum of cash in exchange for a quick claim resolution or desired claim amount. And, of course if one is paid based on the amount of the settled claim the temptation is even greater, but so is the potential penalty. As a regulated “profession” a finding that an adjuster has violated a particular ethical provision may lead to a reprimand, suspension, or even revocation of the adjusting license. Second, it is not uncommon for insureds and their attorneys to contend that an adjuster's violation of his code of ethics is imputable evidence of the insurer's “bad-faith” claims handling. Third, not to be familiar with such codes of ethics may result in awkward and embarrassing moments for that adjuster at deposition and trial, which, in turn, may lead to negative consequences for both the adjuster and the insurer. Notwithstanding the above, prosecuting attorneys have been known to say it is dangerously common for adjusters and other claims professionals to be wholly ignorant, let alone conversant about, any adjuster's code of ethics. Do We Need A Moral Code? Possessing a moral code is not all that is needed to set a professional apart from a layman. However, maintaining a Code of Ethics can inspire us to do better — especially if the breach of the code means we will lose our membership or be scrutinized by our peers. Having high ethical standards, or more simply being honest, can be more important than being right because honesty reflects character while being right reflects a level of ability. Unfortunately, the insurance industry, for the most part, still rewards ability. There are, for example, plenty of "million dollar" production winners and "sales achievement awards"; but few, if any, "Ethics & Due Care" certificates. Being ethical is indeed professional but the gesture goes beyond the mere compliance with law. It means being completely honest concerning ALL FACTS. It means more than merely NOT 4 telling lies because an incomplete answer can be more deceptive than a lie. It means more than being silent when something needs to be said, because saying nothing can be the same as a lie. For example, is it the duty of an adjuster to warn a first party insured of mold contamination and possibility of health risks discovered in a building under claim. While the legal issue gained steam in a famous Melinda v. Fire Insurance Exchange Case ($32 million – later appealed and settled for an undisclosed amount) most adjusters are coming to the realization that the duty of good faith and fair dealing obligate warnings be given to the insured. And, the adjuster should also include covered mold remediation in the scope of damages, including Additional Living Expenses necessary. But, does the obligation stop at a simple warning? When handling water damage should the adjuster be pro-active concerning mold? What about third party claimants, e.g., other occupants near an infected unit? An adjusters responsibility is not only based on the sense of duty of one human being to another, it’s accepted claims practice, professional and ethical, to take action. And, not doing so could be a breach of the Unfair Claims Practice regulations or a possible tort/criminal liability. The story doesn’t end here either. Notification alone may not be enough because part of the training of an adjuster concerns the proper use of experts. An adjuster who may occasionally see or smell mold should know that it may also exist behind walls and other inaccessible locations. The presence of mold may also be indicated by unexplained illnesses, i.e., when the situation warrants, the adjuster has the obligation to seek out the liability exposures to properly evaluate the claim. Testing for mold by a professional could be required. Adjusters and insurers may feel uncomfortable in disclosing potential health dangers where their client / claimant may suffer the wrath of potential new claims. However, failure to disclose such dangers to first or third parties could result in the building owner / policyholder being sued for damages in excess of the available policy limits. If that happen, who do you think the property owner might be looking to make up the difference? Policyholders might also have a bad faith claim against the insurer for failing to protect the property. In essence, as a practical matter, full disclosure may be cheaper in the long run. Could lack of a health disclosure result in criminal charges? In the Melinda Case above, child endangerment criminal charges were filed against some insurance company personnel but later dropped in a settlement.