LOSS ADJUSTER’S ROLE

Loss adjusters are used by shortterm insurers to investigate both commercial and personal lines claims. An insurance company may have its own internal team or it will use the services of a specialist firm.

Jan Schubart, the president of the Institute of Loss Adjusters, says the role of a loss adjuster in assessing a claim includes verifying the circumstances of the loss, confirming that an insured peril (what the policy covers) has, in fact occurred, and ensuring that there has been no breach of policy conditions and/or exclusions.

He says the information a loss adjuster needs depends largely on the type of claim, but generally it is to establish the ownership and value of the lost or damaged property. To do this, a loss adjuster will ask you for invoices or other proof of payment or ownership.

Although the adjuster is appointed and paid by the insurer, Schubart says, he (or she) should remain “independent in thinking and the work he performs”. The adjuster is there to check that the loss is covered by the policy and is dealt with accordingly, he says.

“The adjuster receives no benefit in cutting or inflating a claim. If he is caught doing this he may be placed on an insurer’s ‘do not use’ list, not to mention being seen as unfit. This could lose him his membership of the institute and any professional status he may hold.

“Red flags alerting an adjuster to a possible fraudulent or inflated claim include invoices, or other purchase documentation, not tallying with the supplier’s or issuer’s records, patent overstatement of values, theft via a window that is too small to allow the passage of the goods allegedly stolen, clothing stolen that exceeds the storage space available, and photographs taken inside a dwelling prior to a theft showing items that differ from what is being claimed,” Schubart says. and your claims history (see below), among other factors, to assess your risk, which will determine your premium. •

Industry- related i nfor mation that insurers share among themselves.

Long-ter m insurers share statistics, which alert them to trends. Short-ter m insurers, through a database established by the South African Insurance Association and administered by data agency TransUnion, have access to your claims over the past seven years (see “The Insurance Data System”). •

Assessment of physical evidence related to the loss.

Philippides says insurers will typically appoint a loss adjuster (there are firms specialising in this – see “The roll of the loss adjuster”) to assess the claim.

In the event of a burglary at your home, for example, the loss adjuster will assess the house and the crime scene, check on your security arrangements (such as burglar bars and alarm), and come up with an idea of the value of the loss. In certain cases, an expert might be brought in – for example, if there has been a fire, an expert might be used to investigate how the fire started. The loss adjuster will also look at police reports or fire department reports.

Most claims routinely involve some sort of investigation, Philippides says. The higher the value of the claim and the more complex it is, the more thorough that investigation is likely to be.

A big red flag for your insurer is if there are inconsistencies between, for example, the answers you provided on the claim questionnaire and the facts established by the loss adjuster. Another red flag might be if there is a strong financial motive behind the claim.

INFORMATION PROTECTION LAW

With the recent appointment of Advocate Pansy Tlakula as chairman of the office of the Information Regulator, the full implementation of the Protection of Private Infor mation Act is likely to be rolled out shortly, and all entities that use or process your personal information will have to comply fully with the Act within a year of implementation.

Insurers will be required to have sound reasons for requesting your private information – such as your medical records or your claims history with past insurers. These reasons are known in the Act as “bases for justification”. Philippides says they include:

• Consent (in this case by you, the policyholder); • Contractual conditions; and • Legitimate interests, which for insurers would, for example, be the prevention of fraud.

Philippides advises that you read your insurance policy document carefully to find out the consent you may be required to provide for your insurer to access your personal information. Too often, people just take out insurance without realising they are agreeing to provide such information to their insurers, she says.