Q&A: Can a claims adjuster recommend Small Claims Court?
Question by Rachel : Can a claims adjuster recommend Small Claims Court? Hi, I recently became a claims adjuster for a TPA. One of our clients has several claims from the same company, all for relatively small property damage ( <$ 2500 each). The claims all occurred about 2 years ago, and the information the claimant is giving us and what our insured is giving us is totally opposite and we're never going to reach an agreement--largely because nobody can remember what happened 2 years ago. The claimant is totally fed up with our insured, and I can kind of see his point. But our insured won't allow it and I don't think they want to pay a dime. Would it be wrong to call up the claimant sort of "off the record" and suggest he pursue action in Small Claims Court? Do I have to issue denials first? Would that be considered bad business? Thanks,
Best answer:
Answer by mbrcatz
Yes. It would be completely wrong and unethical for you to do this. YOUR duty of good faith, is to protect your client. If you do this, to screw your client over, you are violating your duty to protect your client.
You do NOT have to issue a denial to a third party. You have no duty of good faith towards that third party. Now, if company procedure is to issue that denial, feel free. But you CANNOT ethically give legal advice (without a law license!) to a third party who potentially will be suing YOUR CLIENT.
Yikes. You do that, your client can – and will, if they find out – sue you for breach of good faith, and they’ll win.
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Rachel,
Think about this a minute. You are going to call the claimant and suggest that he/she sue your client. As Donnie Brasco in the movie “Donnie Brasco” would say Forget About It!
http://www.hugesettlements.com/articles/Insurance_Law.htm
You could be setting yourself up for a bad faith lawsuit and believe me insurance companies cringe when they hear that name. Your 1st duty is to your insured period, since there is a contract with them and not the claimant. I have had many claims as a former auto adjuster of 10 years where the claimant was more believable then the insured, but unless it was proven that the insured was wrong, you must ALWAYS take the insured version over the claimant.
Anytime a claimant files against the insured, they want to get paid period. It’s not their policy that will be paying and if you pay these claims, your insured will be paying higher premiums so believe me they will get upset. If you owe for these claims, you must pay, but unless there is proof that the claimant is owed this money, you owe them nothing. Anytime there is a he said/she said situation, you always take the insureds version to be the truth unless otherwise proven differently. The claimant has the burden of proof, since he is filing these claims.
I suggest you sit down with your supervisor/manager on how to proceed in this. It sounds like you need to send a denial of liability/coverage to the claimant, but in some companies may not want to do this. Each company has their own rules/procedures on how to handle.
Let this claimant decide ON HIS OWN if he wants to file a small claims suit or not. Believe me, in this society, everyone wants to sue everyone, regardless if they are owed or not. Or he could file a claim on HIS own insurance policy and then HIS insurance policy could go after your insureds policy for reimbursement if they believe your insured is liable, since they will be protecting their insured like you should with yours.
good luck
Ask your supervisor if taking that course of action is a good idea. Be prepared to be fired.