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Don't rush to judgment when listening to a claimant

THE CALL came in from two loyal readers whom I will call Mary Anne and Alex. “We’ve got a good one for you,” quoth Alex. “Let me put Mary Anne on the speaker phone, and she’ll fill you in.”

Don’t hold me to exact quotes, since—unlike certain Washington folk—I have never taped my calls, but as I recall, the tale went like this:

 “There is this lady who owns a home in Key West. And no, this isn’t a windstorm claim. Anyway, she owns the house with her boyfriend, who has lived with her for a bit over 30 years, and the policy is in both names. The homeowners policy, I mean. So recently she went out for a night with the girls, and he didn’t like it, and they got in a fight. He shot her twice. She ran out to the car to get away, and he chased her and shot her again in the car. Then he went back in the house and shot himself. She ended up in the hospital. Meanwhile, the police had been called, and they surrounded the house, not knowing he already was dead inside. They shot tear gas grenades through all the windows, then went in and found him. When she got out of the hospital, she called us about her insurance coverages.”

Let’s just stop for a moment. When you take down a claim, does the person, in the immortal words of Sgt. Joe Friday, give you “just the facts, ma’am”? Usually not. More likely, the person will “tell us the tale! Tell us the tale!”as the kings and queens of my wife’s favorite miniseries, “The Tenth Kingdom,” shout at Prince Rupert.

So the tale they will tell, and a colorful one it will be, full of plot, intrigue and details guaranteed to lead the sharpest claims person astray. Your mission, should you decide to stay in property-casualty insurance, is to separate the wheat from the chaff.

But the temptation is to listen to claims as if everything said is significant. And since some effective-listening courses actually suggest you listen to a problem while contemplating its most effective solution, it’s a challenge to be patient and not form any response until you have heard the entire story. But if you don’t, you may find, once the actual claim questions arise, that you have wasted a great deal of time considering possibilities that have nothing to do with the claim at hand.

In my experience, many claims mistakes arise from just such a tendency. One adjuster once told me, “I knew the claim wasn’t covered in a New York minute.” I won’t digress into why New York has developed a minute that’s different from the one used in the rest of the country, but for those unfamiliar with the expression, I’ll simply state he made up his mind in a hurry. Other adjusters and agents have said the same thing in various ways. Why this rush to judgment? Too often, the “quick answer” is wrong, and instead of saving time, we find ourselves once more in that quagmire of claims debate, appeal and painful resolution for which the industry is famous. And need I point out how many attorneys earn a good living off such errors?

By way of example, bear with me as I repeat the above story, with my approximate ongoing thoughts at the time in parentheses.

“There is this lady who owns a home in Key West. (Oh, no. Windstorm problems in the Keys again.) And no, this isn’t a windstorm claim. (Oh. Never mind.) Anyway, she owns the house with her boyfriend, who has lived with her for a bit over 30 years, and the policy is in both names. (Did I hear that right? Boyfriend? Thirty years? Let’s see, Florida doesn’t have common law marriage anymore, so I guess there is no spousal wording to help out with whatever this issue might be. And what policy are we talking about—home, auto? Hey, it’s the Keys. Could be a watercraft question coming.) The homeowners policy, I mean. (Oh OK, homeowners. Policy is in both names, though. What’s the problem here?) So recently she went out for a night with the girls, and he didn’t like it, and they got in a fight. He shot her twice. (He WHAT????) She ran out to the car to get away, and he chased her and shot her again in the car. (She can still run? And after 30 years he shot her over a night with the girls? What kind of people are we dealing with here? But I know that since we can argue he shot her to keep her from leaving in the car, Florida No-Fault is going to kick in for this one—assuming they can sort the medical bills from the first two shots from those for the third one.) Then he went back in the house and shot himself. (They have to be making this up.) She ended up in the hospital. (No kidding.) Meanwhile, the police had been called, and they surrounded the house, not knowing he already was dead inside. (He’s DEAD?? All right, I’m lost. What is the point of this claim anyway?) They shot tear gas grenades through all the windows, then went in and found him. (Better safe than sorry, I guess.) When she got out of the hospital (Oh good, she’s going to be OK after all this—other than losing her boyfriend of 30 years. That’s gotta be tough, even if he did shoot her.), she called us about her insurance coverages. (Not sure insurance would be the first thing I’d think of at that point, but, hey, she’s been through a lot. But what’s this got to do with homeowners insurance? Wonder if it’s a liability issue? Intentional acts won’t exclude the claim in Florida, of course, but there still is the exclusion for injury to an insured.)

You will note I haven’t even heard what the claim question is yet, and I’m already paying the No-Fault claim and denying the one for liability. The first words out of my mouth were, “Hey, what difference does her insurance make? She can sell the movie rights for enough to build a new house!”

It turned out most of my thoughts were off the mark. The insured wanted to know if her HO-3 would pay to clean up the blood stains on the floor and the tear gas powder that now covered the inside of the house and to replace the broken glass in the windows. Oh, and might there be any coverage under her car insurance for the hospital bills, since she was shot once while sitting in the car?

Well, it’s nice to know that in all my rambling thoughts I stumbled across one of the actual questions!

The actual claim questions seem anticlimactic, don’t they? They often are. Wouldn’t life be easier if the call simply had been, “Hi! We were wondering if glass breakage, blood stains and residue from tear gas canisters are covered under an HO-3?” And my answer would have been equally simple. Sure, the tear gas might have given me pause, but the answers are yes to Coverage A (damage to the dwelling) items and maybe yes to Coverage C (damages to personal property). I say “maybe” because although I think the woman has a great argument under the Coverage C perils for “explosion” or “smoke” damage from the tear gas residue, some adjusters will disagree, and the blood clearly was not caused by a named peril.

Since life in the claims world is rarely that simple and because we will continue to have to sort through myriad stories like this one, let us commit ourselves to giving each and every tale the full consideration it deserves, vowing to withhold answers until we know the questions. Perhaps I can sum it up with a modest rewrite of a verse from Simon and Garfunkel’s “59th Street Bridge Song” (or, as it is subtitled and more popularly known, “Feelin’ Groovy”): “Slow down, you think too fast. You’ve got to hear it to the last. Then you just might get it right—and one less claim to feed an attorney!” I don’t know about you, but that thought sure has me “feelin’ groovy”!

Copyright © 2001, 2002, 2003 Amrhein and Associates Inc.