Loss Adjusting companies

saintlee

Loss Adjusting Issues.
Over the last few years, it has become more noticeable that many Loss Adjusting companies have followed the trend of forming their own contracting networks, and In my opinion this is to the detriment of the Industry as a whole. The loss adjusters role should be to act as a referee when dealing with insurance claims, it should not be their job to pick the players as it were.


Some of these companies have pinned the contractors on their network down to a minimal profit and are reportedly taking cuts of up to 18% of all invoiced work. The collapse in the new housing market over the last two years has allowed adjusters to exploit these companies who have little choice than to accept such terms and conditions.

This is particularly bad news for the policy holders and homeowners who with little knowledge of how the industry works have companies such as these appointed to oversee repairs on their insurance claims. It is then understandable for the appointed contractor to look for short cuts and material savings as they try to make some profit out of their work.
In addition, the use of Networks often mean that an appointed contractor (based in Newcastle for example) may be allocated work in London or somewhere of equal distance from their home location. The sheer distance of travel and the need for fuel and accommodation ultimately makes the final invoice to the Insurance company far greater than it would be if a local contractor was used to complete the same work. This happens every day and remains unchallenged by both policy holders and indeed the Insurers who appoint the Loss adjusters. In the current financial climate where high street banks are being bailed out by governments, this is economic suicide, yet is allowed to persist. Ultimately it is the policy holder that suffers as premiums are inflated to allow the extra cost of this unnecessary practice.

This situation arises far more commonly and the whole system of the loss adjusting company making direct profit of the appointed contractor is in my humble opinion a total conflict of interest.

Another alarming aspect which is becoming all to familiar is that the employees who represent the loss adjusting companies and liaise with the policy holders are very rarely qualified to act in such a capacity, and are rarely (if ever) challenged to show their credentials by the policy holder. Policy holders have never been encouraged to do this, as (for example) they are more likely to ask a gas fitter to show his credentials due to the higher public awareness. However a loss adjuster’s ability to perform his job should be of a similar level of importance as a gas fitter or an electrician, as the important decisions as to whether certain trades (such as a structural engineer, or a surveyor) is actually required at all.

There is no doubt that there is a shortage of CILA approved adjusters available, and even more frightening is the fact that only a single Adjuster was qualified by CILA last year. The Loss Adjusting companies apparent apathy towards employing only CILA qualified personnel is undoubtedly influenced by the fees that such a person can expect. However, there clearly needs to be legislation regarding who can and cannot perform such an important task that can effect peoples properties and lives so extensively.

As with CORGI and the NIC, the initiative has usually been born from within the industry to meet a certain level of efficiency, and in both cases have become legislative after initially being voluntary organisations set up by the tradesmen themselves.
The vehicle for loss adjusters to do the same is there within CILA, but the attitude towards any form of legislation does not appear to come from within the industry as it has with the trades I have previously mentioned.

This is something that needs to be addressed, and a good starting point may be with informing users of message boards such as these that it is their right to ask for a CILA (Chartered Institute of Loss Adjusters) approved employee of the company to be their liaison just as they would naturally expect their gas fitter to be on the gas safety register.

A greater public awareness of these problems within the industry would surely accelerate the need and desire to make the necessary changes.

FlameCloud

An interesting article if I ever saw one, and coincidentally one that I read the day that the CII sent an 'improving professional development' email around.

I have worked hard to pass both CILA and CII exams, and very proud to have done so however I would question your belief that only qualified adjusters are good enough. I know exceptionally highly qualified and experienced adjusters that are not up to speed with modern practise or legislation whereas others who havent taken the CILA exams to be far better in reality than their lack of formal acknowledgement would suggest. Do they make me do my job better? Perhaps, but the vast majority of the training given is largely irrelevant to personal lines insurance (i.e. modules in Aviation underwriting, Marine underwriting and IT in insurance) I would not suggest that having ACII ACILA or similar at the end of your name is the be all and end all

The main article misses one vital point however; in that in the modern consumer world, customers demand the adjusters to do everything for them. It is hard enough getting a visit arranged without a complaint about taking time off work, let alone daring to broach the subjects of getting their own quotes for things. They expect to be able to pick up the phone to the insurer, pay their excess and do nothing else for the claim until it is all sorted.

You mention that consumers should be happy to pay for higher quality service, but in an age where people do not read the policy documents and buy solely on price alone this is nothing but a pipe dream.

saintlee

Thanks Flamecloud and Ban-ki-moon! (love the name!),


Flamecloud, I admire you for taking BOTH sets of qualifications and clearly
you speak with some authority on the subject.

I would take your point about policyholders wanting everything done for them, and agree that is absolutely true in some cases, but I feel there is a tendency for many loss adjusters (qualified or otherwise!) to "instruct" policy holders on their claims rather than advise or explain the options that are actually available to them. A part of the reason why I believe the larger companies do not actively encourage CILA or CII qualification (as highlighted above by Bankimoon) as the moral conduct of both respective codes is at odds with the employees strategy when it comes to contractors and supply chains.

Also regarding your point about policy holders complaining about having to take time of work let alone put a quote together....

Do you remember a time when we used to visit customers at their convenience? Loss adjusters used to make early morning, evening and weekend calls not so many moons ago... However I accept that is an indictment on the service sector in general where it is now common place to give nothing more than a date to a customer, and I cannot charge that point at loss adjusters alone, but a more flexible approach to home visits and greater consideration of policyholders own circumstances would clearly improve the problems you describe ..

Finally, to come back to the qualification issue, again the gas safety register (formally Corgi) is an example which should be followed as I have already stated previously.

You say that there are adjusters that are not qualified who are perfectly capable of carrying out there work. That is true, but which ones? How do the public know they have a competent one or not? Just like gas and electricity installers, the loss adjuster needs to be compliant with latest regulations, procedures and methods.

The only way this can happen is to have a standard method of qualification which all need to meet and to kept updated regularly, this includes your point about some qualified adjusters being out of touch, they should complete refresher courses every x amount of years, same as other trades have to.

For your point that much of the CII and CILA qualifications are not relevant to the domestic sector I agree completely, but then there should be a domestic and a commercial qualification, again as done in other sectors such as gas, electricity and the newly formed energy assessment qualification.

Loss adjusting is a vital job and decisions they make are critical for those unfortunate enough to suffer a serious claim. Is it too much to ask for some kind of legislative standard for such an important role?