Claimplus Contents Claim article as published in PropertyCasualty360.com

Property Adjusters: How to accurately value Contents Claims, fast.

7 steps for improving claims payment accuracy

Author: Jane Nelson

Assessing and determining the value of items involved can require the expertise of contents valuators and other experts.

The pandemic has led to a loss of legacy knowledge in the insurance industry, as many senior leaders with vast property claims experience have taken early retirement. This has created a skills shortage of experienced claims adjusters, who play a vital role in helping policyholders recover from losses. It is certainly a talent that doesn’t grow on trees.

As with all successful businesses, there is a core of knowledge worth learning, retaining and passing along. New adjusters entering the field can benefit from knowing more about the working process of contents inventory and valuation behind property claims.

Property claims adjusters help policyholders recover from losses due to accidents, wildfires, storms, or other events. They work with a range of vendors including inventory specialists and contents valuators to assess the damage and determine the amount of compensation owed,  whether to deny the claim or conduct further investigation.

Here are seven tips for working with vendor partners and a review of some of the basics to follow for a claim:

• Review the policy.
• Understand the coverage.
• Understand who is covered.
• Understand the limits and sub-limit categories and deductibles.
• Decide to allow the insured to create their own contents list or
• Dispatch an experienced contents valuation company to the loss site to assist the insured with their contents inventory creation.

1. Contents inventory creation — how it helps expedite the claim

Contents inventory creation is the process of assisting the insured with a list of the contents that were lost or damaged in a property loss. It can be performed at the loss site or over the phone. Contents inventory dispatch can help push the claim forward more quickly by providing the adjuster with a detailed loss inventory report, which aids in assessing the amount of compensation owed, if any.

2. Use a workflow that delegates tasks to your vendor partners

Apply a property claim workflow consistently. With every claim, delegate certain tasks to your vendor partners.  Whether it be water mitigation dispatch, a property inspection, contents inventory, independent adjuster structure repair estimating, or structural rebuild, these tasks usually follow a required workflow order.

Always expect your vendor partners to provide professional service, dedicated support and thorough reporting. Never hesitate to consult your vendor partners for advice on a particular problem or event. If they are experienced, they’ll provide a solution for consideration.  

3. Continue to follow a tried-and-true workflow

After a site visit by the contents valuation company, expect to receive a valuation report listing the lost contents, the replacement costs and cleaning costs. The valuation of contents is based on the current replacement cost of Like, Kind and Quality (LKQ) features, usually not the claimed amount.

The valuation report document is considered an estimate for review and adjustment.

Contents partners can provide trust and confidence to the claimant, supporting the adjuster with known facts pertaining to the contents and helping the adjuster make better settlement decisions.

The contents valuation company should be responsive to the adjuster’s questions and available to take the claimant’s questions. This collaboration will go a long way to providing settlement accuracy.

4. Convey the gathered policy information to the contents valuation company

Let the contents vendor initially apply all limits, deductibles and depreciation to the valuation report. Review their work for limit and deductible accuracy, and request changes if necessary.

5. Know the basics of contents depreciation

Contents depreciation is the decrease in the value of an item over time. Depreciation as it applies to personal property, considers the age, condition and life expectancy of an item. Insureds (or public adjusters) will often challenge the adjuster’s knowledge of depreciation in an attempt to find fault with the entire settlement. However, an adjuster does not need to learn and retain the depreciation value or radically defend it. Instead, allow the professional contents valuation company to apply depreciation to the valuation report. This will be the adjuster’s best support when, or if, depreciation is questioned.

6. Gain better control over large losses

Large losses can be complex and time-consuming to resolve because they often involve serious or catastrophic events where multiple policy coverages apply. The contents settlement is often left until the end of the claim cycle. An insured’s preference to delay the completion of their inventory can drag the claim on for years. Contents specialists can assist with assessing damaged items, recommend a remedy, and supply the value for settlement. Dispatching them early will allow for a “snapshot in time” for the adjuster’s later reference.

7. Avoid overpayment of a contents claim

It’s important for adjusters to accurately pay a claim. Carriers want to settle each claim fairly for the insured and do it efficiently. Contents valuation experts can help the adjuster be confident they are accurately assessing the value of the items damaged in a property loss event.

By following these tips, adjusters can ensure they are providing the best possible service to claimants and carriers alike, while also upholding the standards of their profession.

As published in PropertyCasualty360.com

Jane Nelson is vice president of business development of Claimplus. She may be contacted at jane.nelson@innfeedback.com.