Adjusters Should Holster ‘The Hammer’
by Carl Van
National Underwriter, Nov. 5, 2001

Here is an example of how a simple change in process can make the claims adjuster’s job easier, and increase the chances that a customer will stay.

Of all of the time an adjuster spends negotiating, about 10 percent is spent negotiating the dollar amount of something—either the actual cash value of some object, or the daily rate of pay of some coverage, etc. The other 90 percent is spent negotiating for something else.

Yet most adjusters receive no formal training whatsoever on how to effectively negotiate for what they will spend 90 percent of their time trying to obtain. What can this be, you ask?

Of all the time adjuster spend negotiating, 90 percent of that time will be spent negotiating for cooperation—either getting an insured to give a recorded statement, convincing a claimant to send in some estimates, having someone complete a medical authorization, even getting someone to agree to call back.

Gaining cooperation is a very time-intensive activity for most claims adjusters, yet the approach taken to gain that cooperation can greatly affect the final resolution of the claim, the amount needed to settle it and especially whether the company keeps a customer.

An example if I may: An adjuster asks a customer to complete a medical authorization, and return it to him. The customer replies, “No, I’m not going to do that.” What usually follows is what we lovingly call “The Hammer.” The adjuster pulls out the claims hammer, and gives the customer a good whack…”Well, if you don’t sign the form, we can’t pay you.” (WHACK!)

Sounds reasonable doesn’t it? The problem with this approach, although it will work, is that the adjuster is trying to gain cooperation by inflicting pain, instead of removing the barrier to cooperation. And keep in mind, if the first whack doesn’t work, there are more to come…”Well, you’re obligated under the policy to cooperate. (WHACK!) And besides, its state law (WHACK!)

The adjuster will keep whacking away until the customer, when they can’t take the pain anymore, finally says, “Okay, okay, I’ll sign your stupid form.”

Now let me ask you, what is going to be the attitude of that customer for the rest of the claim? Not good. Most people don’t like being pushed into something they don’t want to do. Now that the customer has been pushed into something he didn’t want to do, he will have a negative attitude on the rest of the claim.

It will be behind why the customer questions everything the adjuster asks him to do. It will be behind why the customer does not believe the adjuster’s figures. It will be behind almost every point of conflict throughout the claim.

I preach a saying to all claims adjusters in our classes: “It is much easier to convince someone you’re right, than it is to convince someone to give in if they think you’re wrong.” Notice that the reply the adjuster gave in the above example will not convince the customer that the adjuster is right. It will only convince the customer to give in because of the pain (lack of payment) that will be inflicted.

In the case above, instead of pulling out “The Hammer,” the adjuster could have pulled out the question: “Why don’t you want to sign the form?” The customer may have responded by saying: “I was told when I first reported this loss that I wouldn’t have to sign anything.”

Then, instead of pulling out “The Hammer” and responding with: “Who told you that?” (which basically says, “either you’re lying, or they were stupid, let’s go find out which,” either of which is not a good scenario).

The skilled, well-trained adjuster will respond with: “If someone told you that you wouldn’t have to sign anything, I apologize. Perhaps they were just trying to reassure you nothing would happen without your permission. I really don’t know. This form allows me to get your medical bills so I can pay you. If you will sign the form, I can get your bills and get busy processing your claim. But again, I am sorry someone gave you the wrong information. Will you sign it so I can get going on helping you with this claim?”

Telling someone how you will help if they cooperate, and telling someone what will happen if they don’t, are two different things.

Sometimes “The Hammer” is necessary, but most of the time is just leaves everyone, including the adjuster and the company, with a bad headache.

Carl Van is president and chief executive officer of International Insurance Institute, Inc., which specializes in delivering on-site claims training to insurance companies across the country. He can be reached at 1-888-414-8811. For more information, go to www.insuranceinstitute.com.