types of claim specialists

Both insurers and insureds (policyholders) call on claims adjusters, accountants, and attorneys for help with claims. Generally speaking, however, the claims adjusters, accountants, and attorneys that offer their services to insurers are distinct from those that offer their services to policyholders. The majority of claims specialists offer their services exclusively to either insurers or insureds, rather than to both. The discussion that follows briefly describes these experts, outlines the services that they can provide, and identifies the situations in which insureds and insurers typically elect to use their services.

Specialists Used by the Insurer

Insurers virtually always use at least one type of claims specialist in the handling of every claim: claims adjusters. Depending on the particulars of each claim, the insurer may also elect to use insurance claims accountants and attorneys.

Staff and Independent Adjusters

Insurers use two different types of adjusters to investigate and settle claims: staff adjusters and independent adjusters. Staff adjusters are employees of the insurer; they adjust claims only for the insurer that employs them. Independent adjusters, on the other hand, are separate business firms that offer claims-adjusting services to insurers for a fee. Staff adjusters receive a salary from the insurer, whereas independent adjusters usually charge insurers for their services on a time-and-expense basis.

Insurers vary with respect to their use of staff versus independent adjusters. Some use staff adjusters exclusively, while others use independent adjusters exclusively. Still others use both, depending on such factors as the location of the loss and the type of claims expertise needed. An insurer may engage an independent adjuster on a case-by-case basis, to handle particular claims, or may designate an independent adjuster to settle all claims of a certain type or size or all claims under a particular policy. There are a number of large, well-known independent adjusting firms. There are also a number of small independent adjusting firms, many of which are operated by former employees of the very large firms.

Regardless of whether the insurer uses a staff adjuster or an independent adjuster to handle a given claim, the role of the insurer's adjuster is to determine the following.

• The cause of the loss
• Whether the policy provides coverage for the loss
• The extent of property damage
• Which items should be repaired, which items should be replaced, and what should be done with the damaged property
• The cost to repair or replace the property
• The amount that the insurer should pay the insured

The insurer's adjuster can also advise the insured on what steps to take to prevent further damage and to minimize the loss, and, if requested, direct the insured to firms that can provide the necessary cleanup and repair services. In performing all of these tasks, the adjuster involves experts from other fields, if necessary.

Insurance Claims Accountants (Forensic Accountants)

For large, complex claims, especially those involving business interruption and extra expense losses, insurers often hire accounting firms to calculate the estimated loss and to evaluate the insured's calculations. Typically, the accounting firms that insurers use are "boutique" accounting firms that are devoted entirely to insurance claims accounting for insurers. These firms, sometimes referred to as forensic accounting firms, do not do other types of accounting work, and they do not make their services available to insureds.

Attorneys

Of course, insurers sometimes also involve attorneys in property claims. Insurers typically involve attorneys in property claims when there is some question as to whether the loss is covered, to provide guidance as to whether the claim should be paid or denied, and to prepare for a court battle if one is expected. If arson or some other type of fraud is suspected, it is advantageous for the insurer to have the attorney direct the investigation, because the information gathered is then protected by attorney-client privilege. The same is true of property losses that may have been caused by a third party. In such cases, the insurer may involve an attorney in anticipation of a later subrogation action against the third party. The insurer may elect to use a staff attorney, particularly for coverage opinions. Often, however, an outside firm is engaged. Although there are exceptions, most attorneys that make their services available to insurers do not make them available to insureds (and vice versa). Attorneys usually charge insurers for their services on a time-and-expense basis, although graduated percentage-of-recovery fee schedules are sometimes used in connection with sizeable subrogation actions.

Specialists Used by Insureds

Public Adjusters

Public adjusting firms offer claims-adjusting services exclusively to insureds, rather than to insurers. Once engaged, public adjusters usually handle the insured's claim from start to finish. They investigate the cause and extent of damage, determine what repairs are needed, get estimates on the cost of repairs, assemble any documents needed to prepare a proof of loss, prepare the insured's proof of loss, and act as a conduit for negotiations with the insurer on the settlement. They often lead the recovery team for the insured, overseeing and directing the activities of other experts to make sure information is prepared accurately and presented to the carrier properly. Public adjusters usually receive a stipulated percentage of the insured's loss recovery (up to 10 percent) as compensation for their services. In marketing their services, public adjusters generally assert that the increased loss recovery that they can secure for the insured will more than cover their fees. Public adjusters are known for their diligent efforts to secure the most favorable loss settlement possible for the insured.

The insured may also elect to engage claims specialists to assist in settling property and business income claims. Reasons often cited for an insured's decision to hire a claims specialist include the following.

• In a claims situation, the insurer and the insured have naturally opposing interests. The insurer's interests are generally best served by making payment of the least possible amount, whereas the insured's interests are generally best served by receiving payment of the greatest possible amount.
• Since the insurer has a claims specialist representing its interests, the insured needs a claims specialist representing its interests to be on equal footing with the insurer.
• Hiring a claims specialist allows the insured's personnel to continue to focus on business operations, rather than spending their time on achieving a satisfactory insurance settlement.

Agents and Brokers

Agencies and brokerage firms of all sizes usually can be counted on for help to their clients, since they specialize in sales and arranging coverage.  Note, however, that even when the agent or broker can provide claims assistance, the responsibility for actually preparing the documentation required for loss payment rests with the insured.

Many agencies simply are not large enough to have an experienced claims specialist on staff. In that case, the agent's usual role is to notify the insurer of the loss, put the insured in touch with the insurer's claims representatives, stay in touch with both the insurer and the insured and help to ensure a smooth process. As a rule, there is no separate, identifiable charge for claims assistance that the agent or broker provides. It is considered a normal account service and is contemplated in the agent's fee or commission.

Insurance Claims Accountants (Forensic Accountants)

Sometimes insureds and public adjusters turn to accounting experts for assistance with a claim, just as insurers do. Some Public Adjusters have in-house accountants while others prefer to retain the services of outside firms. JUSTCLAIMS is affiliated with several firms of which we select the best one suited to the circumstances of the loss and client. Some insurance claims accounting firms offer a full range of claims adjusting services, as follows.

• Preparation of Business Income losses
• Inventory reporting
• Extra expense documentation and application
• Property damage compilation

In practice, however, these specialists are seldom involved in straightforward, direct-damage-only losses. Their specialty is handling very complex claims, particularly those that involve business interruption and extra expense losses, because of the need to quantify and document the financial loss suffered by the insured. Accordingly, insureds and public adjusters often elect to use an insurance claims accountant to handle the business interruption and extra expense portion of the loss only. In these instances, there often are other claims specialists involved in the other aspects of the claim.

Whether the involvement of an insurance claims accountant is warranted depends on several factors.

• The complexity of the claim and the degree of difficulty in quantifying the insured's loss
• The qualifications of the insured's accounting staff
• The amount of time the insured is willing to have these individuals spend on preparing the insurance claim
• The need for a professional presentation 
• Professional and justification to substantiate and support certain accounting methods and valuations .

Whereas insurers use "boutique" insurance claims accounting firms that provide services only to insurers, insureds use either the business insurance division of a public accounting firm or a "boutique" insurance claims accounting firm that provides services exclusively to insureds. Insurance claims accountants typically charge for their services on a time-and-expense basis. Sometimes these fees are absorbed into the claim and other times they may be a necessary but additional expense. Regardless, the value and recovery derived from a well researched and prepared claim from a forensic accountant on your side is well worth the expense.

Attorneys

In connection with property claims, insureds typically hire attorneys to contest the denial of a claim or a settlement offer that is deemed unacceptable. There are situations, where third parties may be liable for an insured's loss or damage and portions of a claim may not be recoverable from the insurance company. In these instances attorneys may be retained to seek supplemental recoveries from the liable party. Attorneys may also be involved when there are injuries in connection with the property damage or when there is damage to property of others. In such situations, it may be advantageous to have the attorney hire investigators to gather the facts, because the information is then protected by attorney-client privilege. Frequently, public adjusters and attorney's work together in pursuit of recovery for the insured. The value of having both an insurance and legal specialist working on your behalf cannot be overstated.

As previously mentioned, most attorneys that make their services available to insurers do not make them available to insureds (and vice versa). Contingent fee arrangements like those of the Public Adjuster are usually utilized but often a percentages starting at 25% and above. These amount varies depending on if suit is filed and if the attorney is able to make a pretrial settlement vs. trying the case.