Claims Handling Practices, Investigation, and Ethics
Coverage before dollars
Every claim follows the same spine: first notice of loss → coverage analysis → investigation → damages evaluation → negotiation and settlement → payment and file closure. Answer three coverage questions before quantifying anything: was a policy in force on the date of loss; is the cause of loss covered; and does an exclusion, condition, or limit change the answer? When coverage is uncertain, issue a reservation of rights letter or obtain a non-waiver agreement - continuing to investigate without one can waive a defense.
Investigation discipline
Secure the proof of loss, recorded statements, scene photographs, police or fire reports, and medical authorizations. Use examinations under oath where the policy requires them. Document chain of custody for physical evidence and preserve salvage. Look for red flags that warrant an SIU referral: recent inception or limit increase, prior losses, inconsistent dates, unreported police involvement, staged-injury indicators, or claimant/repairer relationships. Note notice and prejudice: late notice only defeats a claim when the insurer is materially prejudiced.
Ethics in practice
Adjusters owe good faith, candor, and confidentiality. Do not alter, backdate, or destroy documents; do not accept gifts, referral fees, or ownership interests in a claimant's business; do not give legal advice or discourage a claimant from consulting counsel; do not settle outside granted authority.
Rule of thumb: “If it isn't in the file, it didn't happen.” Each material decision should show the facts relied on, the policy language applied, and who approved it.