One of the most important duties that a public insurance adjuster has is the comprehensive documentation of the claim file. The file should include a detailed record of all communications with the insurance company, company representatives and company experts in addition to all communications with the insured. Pertinent communications include e-mails, regular and certified mailings, telephone conversations and meetings, estimates, inventories, claims, recapitulations, contracts, checks, deposits and disbursements and proofs of loss. In short anything relevant to the preparation, presentation and adjustment of the loss should be maintained.
New Jersey sets forth “Minimum recordkeeping requirements” in its regulation of public adjusters (11:1-37.12).
(a) Each licensee shall maintain accurate files, books and records reflecting all insurance-related transactions in which the licensee or his or her employees take part in accordance with the standards set forth in this subchapter. These records shall be maintained by either separate books of record or by one or more consolidated books of record for a period of five years from the date of closing of the claim.
The regulation details additional financial records that must be maintained and available for inspection including “a register of all monies received, deposited, disbursed or withdrawn in connection with an insured, including, but not limited to: fees, transfers and disbursements from a trust account; and all transactions concerning, including the balance of, all interest bearing accounts.”
Aside from the stipulated minimum requirements there are compelling reasons for you as a professional public adjuster to maintain thoroughly documented claim files. As you are undoubtedly aware, we practice in a litigious atmosphere where evidence of mishandling of claims, bad faith and violations of the Unfair Claims Practices Act are often keys to helping litigators prevail in securing favorable judgements for insureds. Without records documenting these indiscretions your insureds and their counsel may be unable to prove their respective cases.
Simple maintenance of a log for each client file is an effective way to demonstrate a “time line” for the activities that you have performed on behalf of the insured and the responses that the insurance company has made to your claims. You should consider noting events such as when the building take off took place, when the inventory was completed, when was the inventory reviewed by the insured and when each claim was sent to the carrier. Each meeting that you have with the company, their representatives or experts should be noted by date, topic and location. Any verbal agreements should be documented along with a follow up letter stating your understanding of what occurred at the meeting and what agreements were reached. The same goes for any telephone call that takes place between you and a company representative. Questions such as who, what, where, when, why and how are always good considerations when documenting meetings or telephone communications.
There are a number of software applications that are available to help you document the loss adjustment and maintain professional claim files. These have been specifically tailored to meet the needs of public adjusters and incorporate both financial record keeping and maintenance of all correspondence. They can be a cost effective means to help your adjusters save time and money and thoroughly document the claims file.
Another effective means of documenting the claim file is through the use of “transmittal letters”. A transmittal letter is a cover letter that should always accompany any demonstration of loss such as a building estimate, contents claim, business income claim or proof of loss. The letter should have a header that includes the named insured, date of loss, loss location, insurance company and claim number. The body of the letter should state what is attached or included in the package such as a building estimate, inventory or proof of loss. If it is subject to a policy requirement, such as a sixty day proof of loss requirement, the letter should stipulate that the proof is being filed subject to and in accordance with the requirement. Additionally, if you are requesting a specific response to the documents that are being transmitted, it is important that you request a response within a specific time period, such as ten business days ending on a specific date. This is important when you are requesting a response in accordance with the Unfair Claims practices Act which requires a ten day response to “pertinent communications” made by the insured or its agent.
This “Practice Perspective” is by no means a comprehensive examination of what should be documented in your claims file as we are limited in what we can provide in the form of a newsletter. It is a demonstration of the types of things that you can do to better document your file. We suggest that include as much information as possible in the file paying particular attention to your communications with the insurance company and its’ representatives and experts. The extra time and effort that you expend today to document the file could make all the difference when your insured is forced to litigate to be adequately indemnified for their losses.