A news report about a presentation at the Property Loss Research Bureau (PLRB) made this remarkable omission from a person teaching other property insurance adjusters, claims executives, and their attorneys:
Gallegos, who is chief executive officer of CCMS & Associates in Dunedin, Florida, said insurance adjusters also have ethical duties, which are sometimes spelled out in detail (such as in her home state of Florida) — and sometimes not (such as in North Carolina, which advises adjusters to ‘be good’) — by state statutes. Often, she said, any duty to report will create a conflict with the adjuster’s perceived duty to the insurer, which may not be interested in dealing with an even larger potential claim
‘How many times do we ask our engineers not to put that in the report?’ she asked the audience. ‘Lots of times, right?’1
“Lots of times?” I cannot get that out of my head. No wonder we are filing more lawsuits than ever before. It was not always this way.
Doug Quinn of the American Policyholders Association has been claiming that insurance company-retained engineering reports are often untrustworthy because they are written slanted to help the insurance company pay less on claims. This article should be another exhibit to show regulators and others why the property insurance industry is the party causing increased litigation and why consumers are forced to file lawsuits. Quinn claims it is a systemic problem causing policyholders to file lawsuits if they want to receive fair and full compensation.
It is important to note that this was an admission made in front of other property claims adjusters, claims executives, and their attorneys. This is a private meeting for insurance company personnel only, where secrets of property claim adjustments are discussed. I was surprised to learn somebody had the courage to call out their own wrongful behavior. I wonder if they will say and do anything more about this. It is a major problem.
For example, I was at a Georgia Association of Public Insurance Adjusters (GAPIA) meeting in Atlanta two weeks ago. Following my speech, a hygienist expert gave a presentation and told of the recurrent problem of some insurance companies hiding his findings and then hiring another expert, hoping to get a different conclusion. He cited one specific example with State Farm where the policyholder was never sent his report, which indicated how unsafe a structure was to live in following a fire. The State Farm adjuster told him that she would never pay the amount claimed by the policyholder and wanted a different report to get her desired result. His report only saw the light of day because of the litigation brought by the policyholder.
So why is there so much litigation? It is definitely caused in part because claims executives support this type of “hiding behind bought expert reports,” which now admittedly happens “lots of times.” Desk adjusters would not do this wrongful behavior if their bosses punished them. It is a problem of claims management and pressure on the claims departments to reach financial numbers and make incentives.
Where are our regulators? Are they going to follow up with this? My bet is that it would be covered up even if they did.
Nobody in Florida’s elected office or appointed regulators seems to care about the wrongfully delayed and denied policyholders. Instead, their focus is on the finances of the property insurance carriers whose lobbying money and propaganda pervades the news media.
There are more instances of this wrongful conduct—will the press report on it? Will the regulators regulate?
Thought For The Day
Knowledge is not a guarantee of good political behavior, but ignorance is a virtual guarantee of bad behavior.
—Martha Nussbaum
1PLRB Speakers Praise Appraisals, Remind Adjusters About Ethics. Available online at https://www.claimsjournal.com/news/national/2022/10/14/313226.htm
