The Represented Claimant Who Calls Directly
You have been handling a water-damage claim for a Honolulu condominium owner for 40 days. Counsel appeared three weeks ago and asked that all communications go through her office; you have complied and have documented that. Yesterday the insured called your direct line, said her attorney is 'dragging things out,' and offered to give a recorded statement about the remediation invoice right now. Separately, that invoice from a mitigation contractor lists 14 hours of work by two technicians on a date the insured told you she was on the mainland, and the handwriting on the invoice appears altered. Your supervisor wants the statement taken today to 'lock her in' and suggests mentioning that insurance fraud is a felony to see how she reacts. Counsel's demand letter gives ten days.
1. Can you take the recorded statement? Explain your handling of the call.
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No. You know the claimant is represented. Claim practice standards and Hawaii's unfair claim settlement provisions require that you deal with the claimant through counsel once representation is known. The claimant's decision to call you does not cure that; it creates a trap, not an opportunity.
On the call. Listen, but do not take a recorded statement, do not discuss settlement figures, and do not obtain any signature. Tell her plainly that because she has an attorney you are not able to take a statement or discuss the claim with her directly, and that she should raise the delay with her attorney. Keep the conversation short and end it politely.
After the call. Write a contemporaneous memo of what she said, the time, and your response. Then notify her attorney in writing that the contact occurred, that you did not take a statement, and that you will continue to communicate through her office. Taking the statement would taint the evidence, invite a bar complaint against you and a bad-faith allegation against the carrier, and give opposing counsel a reason to discount everything else in your file.
2. How do you investigate the invoice discrepancy without committing an unfair claim practice?
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Investigate, do not accuse. Suspicion of misrepresentation is resolved with records, not with threats. The supervisor's suggestion to raise criminal penalties is off the table: invoking criminal exposure to influence a settlement is coercive, creates extortion and bad-faith exposure, and would poison any later denial.
Steps. Obtain the contractor's underlying documentation independently of the insured - timesheets, dispatch and job logs, work orders, dated photographs, and a statement from the contractor's owner. Verify the insured's travel with her itinerary, boarding passes, or card statements. Issue a reservation-of-rights letter identifying the specific questions. If the discrepancy persists, schedule an examination under oath with counsel present. Refer to SIU and preserve the original invoice.
Payment discipline. Pay the clearly undisputed portion of the loss promptly - delay on an undisputed component is itself an unfair practice - while the questioned component stays under investigation. Document every step with dates. A misrepresentation defense requires proof that the statement was material and knowing; the burden is ours, and a single ambiguous invoice does not carry it.
3. How do you respond to the ten-day deadline without waiving anything?
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Respond in writing within the window, even if the answer is 'not yet.' A written response that acknowledges the demand, states the specific items still outstanding, gives a realistic evaluation date, and reserves all rights is the defensible course. Ignoring the deadline is the single most common source of bad-faith allegations in a file that is otherwise sound.
Content. Confirm the pending invoice verification and EUO scheduling as the reason for the timing; restate that you are communicating through counsel as she requested; restate the reservation of rights; and ask counsel to provide any documentation her client has that corroborates the work dates. Do not make an offer to 'buy peace' on a component you believe is misrepresented, and do not deny the whole claim on the strength of one suspect invoice.
Internal. Confirm the supervisor's instruction in writing with a short memo setting out why the statement will not be taken and why the fraud warning will not be used. Copy the file. If the supervisor insists, escalate to compliance - the exposure belongs to the carrier, and the file record is your protection.