Claims Handling Practices and Ethics
The duty of good faith
Every claim decision must rest on a reasonable investigation, a fair reading of the policy, and a documented rationale. The duty to defend is broader than the duty to indemnify: any possibility of coverage triggers a defense. When coverage is doubtful, send a reservation of rights letter identifying the specific policy provisions and the specific facts creating the doubt. A reservation is not a denial, and a denial must state its grounds.
Investigation practices
Take recorded statements with notice and consent, preserve evidence, photograph before anything is moved, and keep a claim log of every contact. Note the reported date and cause of loss and any inconsistency between them. Never alter, backdate, or 'improve' a document, and never sign as the insured.
Ethics and conflicts
An adjuster cannot represent both insurer and insured on the same claim. Do not accept referral fees from repairers, do not steer work to a vendor in which you have a personal interest, and do not share a claimant's medical information beyond those with a need to know. Suspected fraud should be documented, routed to the special investigation unit, and referred to the Insurance Division or police as appropriate. Hawaii's unfair claims practices statute makes unreasonable delay and low offers actionable.
Communication
Communicate with a represented claimant through counsel. Explain the process, the timing, and the reason for each request, and put the reason for any delay in writing.
Rule of thumb
If it is not in the file, it did not happen. Write each note as though a regulator and a jury will read it, because they may.