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"This endorsement changes your [probability?]"

Let’s always be honest with one another.  Honestly, insurance policies are not ease to understand.  Most state regulators require insurance policies to achieve a certain score on the Flesch Reading Ease Test or equivalent.  One such state requires a score of 40 or higher.  Higher the score, easier to read.  A score range of 30-50 means that a college graduate should understand the document.  I’ve graduated college.  I’ve obtained several prestigious insurance designations.  I’ve worked with some of the most brilliant insurance professionals. I’ve provided expert witness testimony in litigation.  I’ve handled some really, really thought provoking claims.  What I’ve never done is met someone willing to say they completely, unequivocally, understand one coverage form and every instance in which coverage does or does not apply.  Why? So many factors can impact the application of coverage.  Real life is complicated, insurance contracts are complicated, and merging the two into a singular result is more of an art than a science. 

Unless you are really considering a hard pivot in your career to insurance, how can you be confident that what the insurance company is telling you about your claim is right?  To answer this question let us explore the parties and their interests, as well as just touch on one issue. 

The Parties And Their Interests:

Insurance Brokers:  To have insurance, you have to buy insurance.  Hopefully, a licensed insurance broker guided you through the buying process.  Broker’s serve an important purpose, they consolidate product knowledge, convert concerns into coverage options, and should know about the products they are placing.  Their product knowledge can be very helpful in a lot of situations, more importantly their clout with the insurance company can prove valuable.  Most commonly, an insurance broker is paid through a direct commission and a contingent commission by the insurance company.  Commission disclosures can be found in your insurance policy and this has the potential to feel like the start of a conflict of interest.  No matter the potential for a conflict of interest, I have not found an insurance brokerage large enough to convince insurance companies that COVID Business Interruption Claims should be paid.  Chances are your Broker is just as concerned as you are, or more so.

Adjusters:  Two types of adjusters exist, and they are defined by their employer (and license).  I happen to be licensed as both an Independent Adjuster and a Public Adjuster.  An independent adjuster is one that is retained by the insurance company to investigate a claim on behalf of the insurance company.  These Independent Adjusters always work on behalf of the insurance company and are employees or contractors.  Payment comes per file or as a salary, but it is never directly tied to the outcome of a claim (thank you insurance commissioners!). Said another way, the outcome of claim does not change what they are paid.

On the other hand, a Public Adjuster is retained by the policyholder (that’s you).  A Public Adjuster’s interests align directly with those of the policyholder because Public Adjuster’s fees can be contingent on the insurance company paying your claim.  Most Public Adjusters are great at resolving damage disputes (how much should be paid) because coverage is already determined to apply.  In those instances, if the insurance company does not pay, the Public Adjuster does not get paid.  This is the traditional business model for a Public Adjuster.  Additionally, States can regulate their contracts and cap the fees they can charge.

A smaller niche of Public Adjusters (like me) specialize in finding resolution to doubtful and disputed claims. Fees can be contingent but also hourly or flat rate.  This niche Public Adjuster should know how to read, analyze, interpret, and apply an insurance policy strategically.  Guiding the policyholder through the challenges that come with coverage being in question.  

In my opinion, a Public Adjuster must have high ethical standards, in most states a license, and they should never pressure you into signing a contract.  Always read the contract carefully to make sure you understand it all before you retain any Public Adjuster, they are not all created equal.  Also, its important to know that while a Public Adjuster can represent your interests to an insurance company under a claim, they cannot file a lawsuit on your behalf, at least to my knowledge.      

Lawyers:  Full disclosure, I am in law school, I have always dreamed of being a lawyer and will be one day, so if you are looking for a cute joke about lawyers you won’t find it here.  Just like adjusters you have two types of lawyers.  A Coverage Defense Attorney or a Policyholder Attorney.  In this instance a defense attorney is employed by the insurance company, they come up with the logical reasons that your claim should not be paid (A virus does not cause physical damage).  A policyholder attorney comes up with all the logical reasons why your claim should be paid (A virus does cause physical loss of covered property), which hopefully motivates the insurance company to find reasons to settle.  Finding a policyholder attorney can be as simple as using your favorite internet search tool. Common key words are “bad faith attorney”, “coverage counsel”, or “insurance coverage law.” Additionally, you can check with Best Lawyers to see who in your state has been deemed the best in insurance law.  

If you are looking for a more informed way to see different arguments or resources, then I would welcome you connect with me on Linkedin.  I follow a lot of coverage attorneys on both sides (Insurance Coverage Litigation is my passion).  I’ve seen some really cool arguments on both sides of the COVID business income issue and often like, tag, or share this content.

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