Claims Adjuster common mistakes
Claims Adjuster · Understand the traps and how to avoid them.
Answering a coverage question by citing the declarations-page limit ("the policy pays $250,000 because that is the limit shown") instead of first deciding whether the loss falls within the insuring agreement.
The declarations page is the most visually salient part of a policy, so candidates anchor on the dollar figure and skip the analytical sequence that coverage actually requires.
What to do instead
For every coverage question, write out the four-step sequence before choosing an answer: insuring agreement trigger, exclusions, conditions, then limits. State in one sentence which step the fact pattern is actually testing.
Applying the wrong trigger: using the policy in force on the date of injury for a claims-made form, or the date the claim was reported for an occurrence form.
Both triggers involve dates, and the distinction is taught abstractly, so candidates default to the date that appears most often in the fact pattern.
What to do instead
Build a two-column comparison (occurrence vs. claims-made) covering trigger event, retroactive date, reporting requirement, and extended reporting period; then date every fact pattern explicitly before selecting the policy year.
Recording the claimant's account as established fact, e.g. writing "loss occurred as reported" in the file after a single phone interview with no corroboration noted.
Rapport-building and time pressure combine with confirmation bias; the first coherent story tends to become the working assumption.
What to do instead
Maintain a fact matrix with columns for the fact asserted, its source, and the independent verification method used (photographs, fire report, recorded statement, inspection). No material fact closes without something in the verification column.
Omitting negative information from the claim file: no record of questions asked but not answered, documents requested but not received, or calls not returned.
Notes are written as a narrative summary of what was learned rather than as an investigation log of what was attempted.
What to do instead
Log every request with the date made, the follow-up date, and a status flag of received or outstanding. Close each entry with an explicit open-items list so gaps are visible on review.
Spending the initial contact on repair estimates and damage details while never asking about coverage-relevant facts such as business use, prior damage, occupancy, or residency.
Damage is the most concrete part of the loss, so the interview drifts toward it; there is no question plan tied to the policy language.
What to do instead
Draft the first-contact question list directly from the policy's definitions, exclusions, and conditions, and mark each question with the policy provision it tests before making the call.
Reading an exclusion in isolation and denying or granting coverage without accounting for its lead-in language and its exceptions, e.g. citing an exclusion that is restored by a listed exception or that applies only to specified perils.
Exclusion paragraphs are long and candidates skim to the keyword, missing that exclusions are structured as lead-in, exclusion, then exceptions.
What to do instead
Parse each exclusion into its three parts and rewrite it in plain English ("this excludes X, unless Y, and only when Z") before applying it to the facts.
Using everyday meanings for defined terms such as "resident," "business," "vacant," or "actual cash value" instead of the definitions in the policy's definitions section.
The terms feel self-explanatory, and the definitions section sits apart from the coverage forms where the analysis happens.
What to do instead
Treat every defined term as a flag: keep a definitions sheet drawn from the actual policy and check each defined term used in the analysis against it before finalizing the answer.
Mixing valuation methods, such as deducting depreciation from a replacement cost loss, or using original purchase price as actual cash value.
Replacement cost, ACV, and market value overlap in ordinary speech and vary by form and endorsement, so candidates apply whichever method they learned first.
What to do instead
Before computing anything, state in writing which valuation method the form selects and write the formula out. Show depreciation or betterment as its own line rather than folding it into the damage estimate.
Stopping the calculation at gross damage: ignoring depreciation or betterment, salvage recovery, sublimits, and the deductible before stating the payable amount.
Attention is consumed by the damage estimate itself, and the post-estimate adjustments feel like clerical steps.
What to do instead
Use a fixed reconciliation ladder every time: gross damage, then depreciation/betterment, then salvage, then sublimit, then deductible, then net payable. Each line is shown even when the value is zero.
Making a dollar offer, or agreeing to a figure on a recorded line, before confirming settlement authority and before coverage is resolved or a reservation of rights is issued.
The desire to resolve the claim and claimant pressure push toward an early number, and authority limits are not checked in the moment.
What to do instead
Run a pre-negotiation checklist: documented authority level, coverage position letter sent, reservation of rights or non-waiver in place, and a written settlement range with its rationale before any offer is communicated.