Claims Adjusting Practices and Procedures
The life of a claim
Every claim follows the same arc: acknowledge and make contact promptly, investigate (scene, photographs, recorded statements, police and fire reports, medical records, wage records, ISO and prior-loss history), establish coverage by reading the policy against the facts, evaluate damages, negotiate and settle, then subrogate, salvage, and close. Documentation must support every decision: who was contacted, when, what was said, and why the reserve changed. Reserves should reflect the adjuster's best current estimate of ultimate exposure.
Good-faith handling means a thorough investigation, timely communication, a clear explanation of any delay or denial, and payment of undisputed amounts. A reservation of rights letter identifies coverage questions and continues the defense without waiver; a denial letter must state the specific policy provisions and facts relied on. Special investigation unit referrals apply to arson indicators, staged accidents, inflated medical billing, and premium fraud. Subrogation demands must be timely and supported by proof of payment and negligence.
Traps
- Making a payment or defending without a reservation of rights and later arguing waiver or estoppel.
- Speaking with a represented claimant about the accident.
- Assuming a release covers only the property damage when it also bars the bodily injury claim.
- Failing to document a coverage decision contemporaneously.
Rule of thumb
Before any coverage opinion, answer three questions in writing: what does the policy say, what do the facts show, and what is the gap between them? Document the answer before you negotiate.