How Insurance Companies Value  Claims 

 

 

 

Chapter 5 How Insurance Companies Value Claims

Overview

 

 

[A] Claim Organization - Insurance Carriers and other

Insurance company Classifications

    1. Commercial Carriers

    2. Personal Lines Carriers

[B] Organization Retaining Claims Exposure

a) Self- Insured, Self Administers Entities

 

 

 

b) Uninsured Defendants

 

[C] Non Carrier Claim Organization

a) Third Party Administrators ( TPAs)

b) Independent Insurance Adjusters

[D] Flexibility in Settlement Evaluation

    1. Settlement Ranges
    2. Effect of Plaintiff's Demands
    3. Effects of policy Limits Demands

[E] Economic Factors Affecting Case Evaluation

Estimate of liability

    1. Probability of Liability
    2. Comparative Negligence
    3. Contributions and other factor
    4. Claims Committees

[F] Insurance matters

    1. Insured's attitude and control
    2. Amount of Insurance
    3. Excess Carrier Involvement
    4. Coverage disputes
    5. Insurance Policy Provision Regarding Valuation of Claims

[G] Effects of Elaborate Settlement Proposals

[H] Jurisdictions

[I] Codefendant Factors

    1. Opportunity for indemnity
    2. Self- Insured or Uninsured Codefendant
    3. Treats of Bad Faith
    4. Horror factors
    5. Plaintiff Attorney Experience and Reputation
    6. Reference to Jury Verdict Reports

[J] COMMON EVALUATION TECHNIQUES

    1. The X Times Specials Formula
    2. The Modified X Times ( Boston) Method
    3. Earnings as Index to Special Damages
    4. Judgment / Experience Methods
    1. Units of Disability
    2. Hourly Unit of time

[K] Case Evaluation Examples Based upon Case Severity

    1. Assigning Unit Values
    2. Minor Injury Cases
    3. Significant Injury Cases
    4. Catastrophic Injury Cases
    1. Loss of Earnings and Earnings capacity
    2. Future Medical care
    3. Wrongful Death Claims

[L] Alternative Resolution Methods

    1. Pretrial Settlement
    2. Arbitration , Mock Trial , etc.
    3. Mary Carter Agreements
    4. Separate Settlement

Conclusion

*****Lecture seminar  for this course is 2.5 hours for Continuing Education (CE)  This is a general introduction  of how claims are evaluated. There is no set rule that insurance companies follow  however this course will give the adjuster the basic build blocks to value a claim.     

Course study for Professional Designation  requires 5 hours study time.

Oval: Insurance claims consultants

 

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