California Fair Claims

CFP EST 01 General Field Guidelines

The following sections will guide your understanding and application of FAIR Plan expectations for general estimating topics to ensure consistency and accuracy.


 

CFCP 09 – California Insurance Code §790.03

Note: You may watch the video or read the text below to complete this lesson.

 

 

California Insurance Code §790.03

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DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 – 1879.8]
PART 2. THE BUSINESS OF INSURANCE [680 – 1879.8]
CHAPTER 1. General Regulations [680 – 1113]
ARTICLE 6.5. Unfair Practices [790 – 790.15]

§790.03 (h) Knowingly committing or performing with such frequency as to indicate a general business practice any of the following unfair claims settlement practices:

(1) Misrepresenting to claimants pertinent facts or insurance policy provisions relating to any coverages at issue.

(2) Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies.

(3) Failing to adopt and implement reasonable standards for the prompt investigation and processing of claims arising under insurance policies.

(4) Failing to affirm or deny coverage of claims within a reasonable time after proof of loss requirements have been completed and submitted by the insured.

(5) Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear.

(6) Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by the insureds.

(7) Attempting to settle a claim by an insured for less than the amount to which a reasonable person would have believed he or she was entitled by reference to written or printed advertising material

(8) Attempting to settle claims on the basis of an application that was altered without notice to, or knowledge or consent of, the insured, his or her representative, agent, or broker.

(9) Failing, after payment of a claim, to inform insureds or beneficiaries, upon request by them, of the coverage under which payment has been made.

(10) Making known to claimants a practice of appealing from arbitration awards in favor claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration.

(11) Delaying the investigation or payment of claims by requiring a claimant or physician to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms which contain substantially the same information.

(12) Failing to settle claims promptly, where liability has become apparent, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.

CFCP 08 Additional Standards Applicable to First Party Residential & Commercial Property Insurance

Note: You may watch the video or read the text below to complete this lesson.

 

Additional Standards Applicable to First Party Residential & Commercial Property Insurance §2695.9.

 

Replacement Cost Coverage § 2695.10(a)

When a residential or commercial property insurance policy provides coverage on a replacement cost basis, the following standards apply:

When a loss requires repair or replacement of an item or part, any consequential physical damage incurred in making the repair or replacement not otherwise excluded must be included in the loss. The insured may not be required to pay for depreciation nor any cost except the applicable deductible.

When a loss requires replacement of items and the replaced items do not match in quality, color or size, the insurer shall replace all items in the damaged area so as to conform to a reasonably uniform appearance. “Damaged area” and “reasonably uniform appearance” are the key, not a “line of sight” rule.

Property Repairs § 2695.9(b)(c)

An insurer may not require that an insured have property repaired by a specific entity or individual.

An insurer may recommend a specific individual or entity for repairs if:

  • The referral is specifically requested by the claimant OR
  • The claimant has been informed in writing of their right to select a repair individual or entity

If the claimant accepts the recommendation, the insurer must see that the damaged property is restored to its pre-loss condition prior to the loss and repaired in a manner which meets accepted trade standards for workmanlike construction at no additional cost other than as stated in the policy or as otherwise allowed by these regulations.

Property Repairs § 2695.9(d)

If losses are settled on the basis of a written scope and/or estimate prepared by or for the insurer, the insurer shall supply the claimant with a copy of each document upon which the settlement is based. If the claimant subsequently contends, based upon a written estimate which he or she obtains, that necessary repairs will exceed the written estimate prepared by or for the insurer, the insurer shall:

  • Pay the difference between its written estimate and a higher estimate obtained by the claimant OR
  • If requested by the claimant, promptly provide the claimant with the name of at least one repair individual or entity that will make the repairs for the amount of the written estimate and will be obligated to restore the damaged property to its pre-loss OR
  • Reasonably adjust any written estimates prepared by the repair individual or entity of the insured’s choice and provide a copy of the adjusted estimate to the claimant.

 

Betterment & Depreciation § 2695.9(f)

All justification for any adjustments for betterment or depreciation must be documented in the file and be discernable, measurable, itemized, and specified as to dollar amount, accurately reflecting the value of the betterment or depreciation.

The basis for any adjustment shall be fully explained to the claimant in writing and shall:

  • Reflect a measurable difference in market value attributable to the condition and age of the property
  • Apply only to property normally subject to repair and replacement during the useful life of the property

Items to which depreciation does not apply include:

  • Drywall
  • Insulation
  • Rough plumbing
  • Framing and rough carpentry
  • Rough electrical and wiring
  • Labor necessary to repair, rebuild or replace covered property

CFCP 07 Additional Standards Applicable to Auto Insurance

Note: You may watch the video or read the text below to complete this lesson.

 

Additional Standards Applicable to Auto Insurance §2695.8.

 

Total Loss Settlement § 2695.8

An insurer may elect to offer a cash settlement based on the actual cost of a “comparable automobile” less any deductible provided in the policy. Cash settlement must include:

  • Applicable taxes
  • One-time transfer fees
  • An owner-retained settlement must also include the applicable pro-rated taxes and fees to transfer to salvage status offset by deduction for the salvage value.

 

Total Loss Settlement § 2695.8

In first-party automobile total loss claims, the insurer may elect to offer a replacement automobile which must be in as good or better overall condition than the insured vehicle and available for inspection.

Total Loss Settlement § 2695.8

Comparable Automobile means a vehicle of like kind and quality, made by the same manufacturer, of the same or newer model year, of the same model type, of a similar body type, with options and mileage similar to the insured vehicle. Any differences between the comparable automobile and the insured vehicle shall be permitted only if the insurer fairly adjusts for such differences. Insurer must take reasonable steps to verify that the determination of the cost of a comparable vehicle is accurate and representative of the local market area and explain in writing to the claimant once determined.

In first-party automobile total loss claims the insurer must provide notice to the insured at the time of payment or final settlement offer that the insurer will reopen the file if notified by the claimant within 35 days that they have been unable to locate a comparable vehicle based on the settlement made. The insurer must then either:

  • Locate a comparable automobile in the local market area for the gross settlement amount determined by the company at the time of settlement and shall provide the insured with the information required in (c)(4) or offer a replacement vehicle in accordance with section (b)(4) OR
  • Pay the insured the difference between the amount of the gross settlement and the cost of the comparable automobile which the insured has located, or negotiate and purchase this vehicle for the insured OR
  • Invoke the appraisal provisions in the policy.

The insurer is not required to take these actions if at the time of final settlement the insured was provided with written documentation identifying a specific comparable vehicle available for purchase at the time of final settlement offer for the gross settlement amount determined by the insurer.

Auto Body Repairs § 2695.8(e) & Ins. Code §758.5

An insurer may not require that an automobile be repaired at a specific repair shop.

An insurer may recommend that an automobile be repaired at a specific repair shop if:

  • The claimant specifically requests a referral to a repair shop
  • The claimant has been informed in writing of the right to select a repair shop of his or her choice

If an insurer’s recommendation of an automotive repair dealer is accepted by the claimant, the insurer shall cause the damaged vehicle to be restored to its condition prior to the loss at no additional cost to the claimant other than as stated in the policy or as is otherwise allowed by law. Ins. Code §758.5(b)(3)

Auto Body Repairs § 2695.8(f)

Insurer shall supply the claimant with a copy of its estimate, which must be of an amount that will allow for repairs to be made in accordance with accepted trade standards for good and workmanlike automotive repairs. If the claimant subsequently contends, based upon a written estimate that he or she obtains, that necessary repairs will exceed the written estimate prepared by or for the insurer, the insurer shall:

  • Pay the difference between the written estimate and a higher estimate obtained by the claimant OR
  • At the claimant’s request, promptly provide the name of at least one repair shop that will make the repairs for the amount of the insurer’s written estimate OR
  • Reasonably adjust any written estimates prepared by the repair shop of the claimant’s choice and provide a copy of the adjusted estimate to the claimant and the claimant’s repair shop

 

Replacement Parts § 2695.8(g)

Non-original replacement parts may be utilized by the insurer only when:

  • The parts are at least equal to the original equipment manufacturer (OEM) parts in terms of kind, quality, safety, fit, and performance
  • The insurer must disclose in writing, in any estimate prepared by or for the insurer, the fact that it warrants that such parts are at least equal to the OEM parts in terms of kind, quality, safety, fit, and performance
  • The use of OEM replacement crash parts is disclosed in accordance with section 9875.1 of the California Business and Professions Code

If an insurer specifying the use of OEM parts has knowledge that a part is not equal to the OEM part, or does not otherwise comply with this section, it shall immediately cease requiring the use of the part and shall, within thirty (30) calendar days, notify the distributor of the non-compliant aspect of the part

If a non-OEM part is specified by the insurer that is not equal to the original equipment manufacturer part in terms of kind, quality, safety, fit, and performance, or does not otherwise comply with this section, the insurer shall pay for the costs associated with returning the part and the cost to remove and part with a compliant part

An insurer may not require an insured or claimant to supply parts for replacement.

Betterment & Depreciation § 2695.8(i)

All justification for any adjustments for betterment or depreciation must be documented in the file and be discernable, measurable, itemized, and specified as to dollar amount, accurately reflecting the value of the betterment or depreciation.

The basis for any adjustment shall be fully explained to the claimant in writing and shall:

  • Reflect a measurable difference in market value attributable to the condition and age of the vehicle
  • Apply only to parts normally subject to repair and replacement during the useful life of the vehicle

This subsection shall not preclude deduction for prior and/or unrelated damage to the loss vehicle.

Parts that can depreciated under these guidelines include:

  • Batteries
  • Tires
  • Engines
  • Transmission
  • Major electronic components such as alternators
  • Stereo equipment
  • Belts, spark plugs, etc.

Labor expense not subject to depreciation on first party partial loss (unless clearly stated as such in the insurance policy).

Towing & Storage § 2695.8(k)

Where towing and storage are reasonably necessary to protect the vehicle from further loss, the insurer shall pay reasonable towing and storage charges incurred by the claimant and provide reasonable notice to the claimant before terminating payment for storage charges to permit the claimant sufficient time to remove the vehicle from storage.

Auto Body Repair Consumer Bill of Rights § 2695.85

1. SELECT THE AUTO BODY REPAIR SHOP TO REPAIR AUTO BODY DAMAGE COVERED BY THE INSURANCE COMPANY. AN INSURANCE COMPANY SHALL NOT REQUIRE THE REPAIRS TO BE DONE AT A SPECIFIC AUTO BODY REPAIR SHOP.

2. AN ITEMIZED WRITTEN ESTIMATE FOR AUTO BODY REPAIRS AND, UPON COMPLETION OF REPAIRS, A DETAILED INVOICE. THE ESTIMATE AND THE INVOICE MUST INCLUDE AN ITEMIZED LIST OF PARTS AND LABOR ALONG WITH THE TOTAL PRICE FOR THE WORK PERFORMED. THE ESTIMATE AND INVOICE MUST ALSO IDENTIFY ALL PARTS AS NEW, USED, AFTERMARKET, RECONDITIONED, OR REBUILT.

3. BE INFORMED ABOUT COVERAGE FOR TOWING AND STORAGE SERVICES.

4. BE INFORMED ABOUT THE EXTENT OF COVERAGE, IF ANY, FOR A REPLACEMENT RENTAL VEHICLE WHILE A DAMAGED VEHICLE IS BEING REPAIRED.

5. BE INFORMED OF WHERE TO REPORT SUSPECTED FRAUD OR OTHER COMPLAINTS AND CONCERNS ABOUT AUTO BODY REPAIRS.

6. [effective January 1, 2010, pursuant to AB 1179 (Jones, Chapter 141, 2009)] SEEK AND OBTAIN AN INDEPENDENT REPAIR ESTIMATE DIRECTLY FROM A REGISTERED AUTO BODY REPAIR SHOP FOR REPAIR OF A DAMAGED VEHICLE, EVEN WHEN PURSUING AN INSURANCE CLAIM FOR REPAIR OF THE VEHICLE.

CFCP 06 Standards for Prompt, Fair and Equitable Settlements

Note: You may watch the video below or read the text to complete this lesson.

 

Standards for Prompt, Fair and Equitable Settlements §2695.7.

The regulations set forth the standards under which settlements must be made.

Acceptance or Rejection of Claim § 2695.7(b).

An insurer must accept or deny a claim, in whole or in part, within 40 calendar days of receipt of the notice of loss.

The claim file must clearly document the amounts accepted or denied.

Denials § 2695.7(b).

When a claim is denied or rejected, notice must be given to the claimant in writing and include:

  • Explanation to first party claimant of the denial including all factual and legal bases for the denial
  • Explanation to third party claimant of the basis of a denial or dispute of liability or damages
  • Notice that review by the California Department of Insurance may be requested, including CDI’s address and phone number

 

Extension of Time § 2695.7(c).

If more time is required to complete an investigation as to whether a claim should be accepted and/or denied an insurer must provide written notice to the claimant of the need for additional time.

Written notice must specify any additional information required and state any continuing reasons for the insurer’s inability to make a determination. Thereafter, the written notice must be provided every 30 calendar days until a determination is made. If the determination cannot be made until some future event occurs, insurer must continue to send notice, advising the claimant of the situation and providing an estimate as to when the determination can be made.

Suspected Fraud § 2695.7(k).

Where there is a reasonable basis, supported by specific information available for review by the DOI, that the claim is fraudulent the time within which the insurer must act on the claim is increased to 80 calendar days OR suspended until otherwise ordered by the Commissioner, provided the insurer can demonstrate to the Commissioner that it has made a diligent attempt to determine whether the subject claim is false or fraudulent within the 80-day period

Unnecessary Delays § 2695.7(d).

Every insurer shall conduct and diligently pursue a thorough, fair and objective investigation and shall not persist in seeking information not reasonably required for or material to the resolution of a claim dispute.

Even if there’s additional information out there, if we have the necessary information to make a determination, we should proceed to do so. Unreasonable requests should not be made of a claimant for unnecessary information and requests for information not reasonably necessary should not be made in order to “buy time” to make a decision.

Other Insurance § 2695.7(e).

No insurer shall delay or deny settlement of a first party claim on the basis that responsibility for payment should be assumed by others, except as may otherwise be provided by policy provisions, statutes or regulations, including those pertaining to coordination of benefits.

Statute of Limitations § 2695.7(f).

Except when a claim is settled by payments, an insurer must provide notice in writing to a claimant not represented by counsel of a statute of limitations or other time requirement that could be used to deny the claim at least 60 days prior to expiration. If notice of the claim is made less than 60 days prior to expiration, notice of the expiration date must be given immediately.

An insured represented by a public adjuster is not represented by counsel and the notification requirement still applies. If the claimant is a first party claimant in a matter involving an uninsured motorist, the notice is required 30 days prior to the expiration date.

Lowball Settlements § 2695.7(g).

The regulations prohibit offering a settlement that is unreasonably low. Evidence the Commissioner may consider in determining if an offer is unreasonably low includes:

  • Extent to which the insurer considered evidence submitted by the claimant in support of the claim
  • Extent to which the insurer considered legal authority or evidence made known to it or reasonably available
  • Extent to which the insurer considered advice of its claim adjuster with respect to amount of damages
  • Extent to which the insurer considered the advice of its counsel that there was a substantial likelihood of recovery in excess of policy limits
  • Procedures used by the insurer in determining the dollar amount of property damage
  • Extent to which the insurer considered the probable liability of the insured and the likely jury verdict or other final determination of the matter
  • Any other credible evidence presented to the Commissioner that demonstrates that the amount offered is below that which a reasonable person with knowledge of the facts and circumstances would have offered in settlement of the claim

 

Claim Payments § 2695.7(h).

Once the claim has been accepted in whole or in part and, when applicable, once a properly executed release has been received, the insurer must issue payment or otherwise take action to meet its obligation immediately, but within 30 days of acceptance or receipt.

Prohibited Acts § 2695.7.

 

  • An insurer may not inform a claimant that his or her rights may be impaired if a form or release is not completed within a specified time period
  • An insurer may not require an insured to submit to a polygraph examination unless authorized under the applicable insurance contract and state law
  • An insurer may not deny a claim based upon information obtained in a telephone conversation or personal interview with any source unless the telephone conversation or personal interview is documented in the claim file pursuant to the provisions of Section 2695.3
  • An insurer may not request a medical examination in order to determine liability without a good faith belief such exam is reasonably necessary
  • An insurer may not require that a claimant withdraw, rescind or refrain from submitting any complaint to the California Department of Insurance as a pre-condition to settlement of a claim

 

Subrogation § 2695.7(p)(q).

An insurer must provide written notice to a first party claimant as to whether the insurer intends to pursue subrogation of the claim. Where an insurer elects not to pursue subrogation, or discontinues pursuit of subrogation, it shall include in its notification a statement that any recovery to be pursued is the responsibility of the first party claimant. This subsection does not require notification if

  • the deductible is waived, the coverage under which the claim is paid requires no deductible to be paid
  • the loss sustained does not exceed the applicable deductible OR
  • there is no legal basis for subrogation.

An insurer that pursues subrogation must include in the first party claimant’s deductible in the demand. Where a recovery is proportional to the whole loss, the insurer must share recoveries on a proportionate basis with the first party claimant. The insurer may not deduct expenses from the recovery of the deductible unless the insurer has retained an outside attorney or collection agency to collect.

CFCP 05 Duties Upon Receipt of Communications

Note: You may watch the video below or read the text to complete this lesson.

 

Duties Upon Receipt of Communications §2695.5.

Insurers are required by the regulations to respond to certain communications within established guidelines and timeframes.

Timelines § 2695.5.

Regardless of the type of communication, the regulations state that the insurer must respond immediately. The maximum time permitted to respond is as follows, depending on the communication involved:

  • Response to Department of Insurance inquiry: No more than 21 calendar days from receipt
  • Communication from claimant: No more than 15 calendar days from receipt
  • Notice of claim: No more than 15 calendar days from receipt

 

Department of Insurance Inquiry § 2695.5(a).

A licensee must immediately (no more than 21 calendar days of receipt) respond to any oral or written Department of Insurance inquiry. The licensee must provide a complete written response based on the facts as then known by the licensee which addresses all issues raised by the Department of Insurance in its inquiry. The response must include copies of any documentation and claim files requested.

Communication from Claimant § 2695.5(b).

A licensee is required to respond to any communication from a claimant that reasonably suggests a response is expected, within 15 calendar days from receipt. The claimant is due a complete response based on the facts as then known by the licensee.

Designated Person § 2695.5(b).

A person other than an attorney who is authorized to represent a claimant (§ 2695.2(c).) must be designated as such by written notice to the licensee signed and dated by the claimant.

  • Insurance Adjuster
  • Public Adjuster
  • Family Member

Designations are valid from the date executed until the claim is settled or the designation is revoked by the claimant

Notice of Claim § 2695.5(e).

Upon receiving notice of claim, every insurer shall immediately, but in no event more than 15 calendar days later, do the following unless the notice of claim received is a notice of legal action:

  • Acknowledge receipt to the claimant unless payment is made within that period of time. (If the acknowledgment is not in writing, a notation of acknowledgment shall be made in the insurer’s claim file and dated.)
  • Provide claimant with the necessary forms, instructions, and reasonable assistance.
  • Begin any necessary investigation of the claim.

Receipt of notice of a claim by an insurance agent or claims agent is the same as receipt of notice by the insurer.

Summary of Timelines

California Fair Claims Timeline Summary

Suspected Fraud

Written notices as indicated in the above references do not require an insurer to disclose any information that could reasonably be expected to alert a claimant to the fact that a claim is being investigated as a possible suspected fraudulent claim.

CFCP 04 Representation of Policy Provisions & Benefits

Note: You may watch the video below or read the text to complete this lesson.

 

 

Representation of Policy Provisions & Benefits §2695.4.

Insurers are required by the regulations to disclose all pertinent policy provisions to a first party claimant or beneficiary.

Required Disclosures § 2695.4(a).

An insurer must disclose to all first party claimants all benefits, coverage, time limits or other provisions of any insurance policy issued by that insurer that may apply to the claim presented. In addition to coverage for repairs to covered property, such coverages include but are not limited to:

  • Emergency services/board-up
  • Debris removal
  • Additional Living Expenses / Loss of Use
  • Extended replacement cost
  • Ordinance & Law
  • Additional coverages

 

Required Disclosures § 2695.4(a).

When it becomes apparent additional benefits may be reasonably payable under an insured’s policy upon receipt of additional proofs of claim, the insurer must immediately communicate this fact to the insured and cooperate with the insured in determining the amount of the extent of the insurer’s liability.

Required Disclosures § 2695.4(c).

An insurer may not deny a claim on the basis of the claimant’s refusal to exhibit the property unless the file is documented to show:

  • Reasonable demand by the insurer and unreasonable refusal by the claimant to exhibit the property OR
  • Breach of any policy provision providing for the exhibition of the property

 

Required Disclosures § 2695.4(d).

Except where a time limit is specified in the policy, an insurer may not require a first party claimant to give notice of a claim or proof of claim within a specified time in order for coverage to apply.

Releases § 2695.4(e).

With respect to releases, an insurer may not:

  • Request that a claimant sign a release that extends beyond the subject matter which gave rise to the claim payment
    • Unless prior to execution of the release the legal effect of the release is disclosed and fully explained to the claimant in writing
  • Include in a release any provision requiring the claimant to waive any portion of the California Civil Code Section 1542
    • Unless prior to execution of the release the legal effect of the release is disclosed and fully explained to the claimant in writing

 

Releases § 2695.4(f).

An insurer may not issue checks or draft in partial settlement of a loss or claim that contain or are accompanied by language releasing the insurer or the insured unless:

  • The policy limit has been paid OR
  • There has been a compromise settlement agreed to as to coverage and amount payable under the policy

 

Required Disclosures § 2695.4(a).

Time limits required to be disclosed include but are not limited to:

  • 1-year suit provision
  • Time required to collect RCV
  • Statute of Limitations

 

Duplicative Documentation § 2695.4(g).

An insurer may not require a first party claimant or beneficiary to submit duplicative proofs of claim where coverage may exist under more than one policy issued by that insurer.

Documentation

File notes should reflect that policy provisions were disclosed to the insured and in what manner.

  • Document the conversation in the file
  • Send a confirming email or letter
  • To prevent overlooked notifications, whenever possible, include notices in letters. For example:
    • Include notice of timeline to collect RCV in payment letters with settlement checks
    • Include notice of statute of limitations in payment or denial letters

CFCP 03 File Documentation

Note: You may watch the video below or read the text to complete this lesson.

File Documentation  §2695.3.

The regulations set forth various criteria for properly documenting claim files and records.

The DOI May Examine the Claim File

According to §2695.3(a), the Commissioner of Insurance or their representatives are entitled to examine the claim files. Claim files should contain the following:

  • Documents
  • Notes
  • Work papers
  • All correspondence

Contents of the claim file should be sufficiently detailed as to enable the DOI to reconstruct the pertinent events and dates and determine the licensee’s actions relative to the claim.

Contents of the Claim File

Pertinent documents, notes, work papers and correspondence could include (but are not limited to) any of the following:

  • Emails (and attachments)
  • Letters (including envelopes)
  • Voice messages
  • Text messages
  • Repair estimates
  • Xactanalysis activity log notes or similar
  • Adjuster reports
  • Scope notes
  • Photographs
  • Internal workpapers or worksheets

IMPORTANT:

  • All documents must be date stamped as to the date received or sent.
  • Documents must be retained for the current year and previous four years.

 

Communications with Third Parties

Pertinent documentation also includes any of the above material exchanged with:

  • The insurer and any third party hired to assist with the investigation and handling of the claim, such as an independent adjuster, expert, investigator or other vendor
  • The insured and any such third party hired by the insurer
  • Pertinent inter-office communications including emails and memos such as payment or authority requests

 

Electronic Documents

Documentation must be maintained in hard copy files or must be accessible, legible and capable of duplication to hard copy. Documentation maintained in electronic format should follow rules set forth in the Code of Civil Procedure Section 2016.020 (d) and (e):

  • “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
  • “Electronically stored information” means information that is stored in an electronic medium.

 

File Notes

The file notes should include a written record of any communication made by or to any individual working on the claim, whether that communication is oral, paper or electronic.

Tips for Proper File Documentation

 

  1. Document all pertinent events in the file. If it’s not documented in the claim file, it did not happen.
  2. Provide an accurate summary in the claim file of all conversations with an insured or their representative, other third parties or management.
  3. Send follow up letters or emails to memorialize conversations with the insured or other parties to remove all periods of uncertainty.
  4. Date-stamp all file material to confirm the date received or sent. File notes should reflect the date that communications, events or processing took place.
  5. Document the amount of the claim accepted or the denial along with the reason(s) for the decision and the date.

 

File Documentation: What NOT to Do

 

  1. Don’t delete email correspondence related to the claim, including attachments.
  2. Don’t use acronyms or abbreviations that may be misunderstood or misconstrued.
  3. Don’t state unsubstantiated opinions or make disparaging remarks about the insured or any other party involved.
  4. Don’t state unsubstantiated opinions or make disparaging remarks about the insured or any other party involved.
  5. Don’t permit vendors or other third parties representing the insurer include unsubstantiated opinions or disparaging remarks in their reports or correspondence.
  6. Don’t comment on the performance of any third party vendor or on the competence of attorneys, public adjusters, agents, experts, etc.