Exposing Unethical Insurance Adjusters: A Guide To Recognizing And Reporting Malpractice

Dealing with insurance adjusters can be a tricky business. While many insurance adjusters work hard to review all relevant details and arrive at a fair conclusion, others may use unethical tactics. If you or a loved one has been on the receiving end of an insurance adjuster's dishonest or fraudulent behaviour, you can and should report it. Here's how.

Step 1: Talk to the Adjuster

Give the adjuster a chance to settle your claim before escalating the issue. Your claim is the most important one to you, but the adjuster has to deal with dozens of claims simultaneously. Talk to the adjuster calmly and professionally about the problem. You might have to call or write many times. If the adjuster is unresponsive, be persistent and patient. Try to set up an appointment or a deadline for receiving a response.

Step 2: Talk to a Supervisor

If you can't get anywhere with the adjuster, ask to speak to their immediate supervisor or the claims manager. The adjuster might be overwhelmed with claims or might not have the authority to make you a better offer. A supervisor will take a fresh look at your claim and have more discretion to negotiate a settlement.

Step 3: Mention the Possibility of a Complaint and Bad Faith Lawsuit

If your situation seems appropriate for a complaint to the state insurance department, mentioning your intent to file a complaint might bring about a new settlement offer. Insurance companies would rather not have complaints against them on file.

Step 4: File a Complaint

If mentioning the possibility of a complaint doesn't work, file an actual complaint. You can file a complaint with your state department of insurance, which regulates insurance activity and insurer compliance with state laws and regulations. You can also file a complaint with the National Association of Insurance Commissioners (NAIC). The NAIC has a tool for finding complaint ratios for insurance companies.

Your complaint letter should include:

- The date of the incident and names of people involved

- A general description of your insurance claim

- Details of the difficulties you've had with the adjuster

- The number of conversations you've had with the adjuster and supervisors trying to settle the matter

- Copies of all your correspondence, including your demand letter

Step 5: Seek Arbitration

Arbitration may be an option for some issues. Check your policy to see if it is available to you. There are two types of arbitration: non-binding and binding. With non-binding, you can disagree with the arbitrator's decision and file a lawsuit. Insurance companies usually mandate binding arbitration on their policies—if they allow any arbitration at all.

Step 6: File a Legal Claim

If all else fails, you can file a legal claim against the insurer in court. Consider hiring a lawyer to help you with this step.

Report to the state insurance commissioner or department

If you need to report an unethical insurance adjuster, you can file a complaint with your state insurance commissioner or department. The state insurance commissioner is a public official in charge of regulating the insurance industry in their state, ensuring fair market practices, and guarding consumer rights.

Before filing a complaint, it is recommended to try resolving the issue with the insurance adjuster, their supervisor, or a claims manager. If this does not work, you can follow the steps outlined below to file a complaint:

• Visit your state insurance commissioner's website to understand the process for filing a complaint. Look for any deadlines, guidance, and sample forms that may be available. Many state insurance commissioners provide a complaint form that can be downloaded, filled out, and submitted online or sent by mail.
• Gather all relevant information and documents pertaining to your complaint, including records of phone conversations, agent contacts, correspondence, demand letters, medical records, and billing information.
• Submit the complaint form along with the supporting documentation to the state insurance commissioner's office.
• The commissioner's office will review your complaint and may reach out to request additional information or documentation. They will then forward your complaint to the insurance company and request a response within a specified deadline.
• If the commissioner finds the insurance company's response unsatisfactory, they may assign a representative to your case to conduct further research and resolve the issue. This person will work with both parties to determine if state laws and contract terms were followed and investigate any potential foul play.
• You can decide whether to hire an attorney as your case proceeds, considering the amount of money or value at stake and your level of trust in the involved parties. Keep in mind that the state-designated representative is neutral and does not represent you directly.

It is important to note that the process and response to complaints may vary across different states. While some states address every complaint, others may only take action in cases of obvious and extreme misconduct or when multiple complaints are received about the same adjuster or insurance company.

Additionally, you can also file a complaint with other relevant organizations, such as the Office of the Attorney General's Consumer Protection Division or the Office of Public Insurance Counsel, depending on your specific state and the nature of your complaint.

File a complaint with the insurance company

If you believe that an insurance adjuster is acting unethically, there are several steps you can take to file a complaint.

Firstly, it is recommended that you talk to the adjuster and give them a chance to settle your claim. If this does not work, you can ask to speak to their supervisor or the claims manager, who may have more authority to negotiate a settlement.

If this also does not work, you can mention the possibility of filing a complaint with the state insurance department and suing the company for acting in bad faith. This may prompt the insurance company to offer a new settlement.

If you still want to file a complaint, you can do so with your state insurance department. The National Association of Insurance Commissioners (NAIC) website links to each state's department of insurance and provides information on how to file a complaint. Some states have a specific form for filing complaints, while others require a letter. Your complaint should include:

• The date of the incident and names of people involved
• A general description of your insurance claim
• Details of the difficulties you've had with the adjuster
• The number of conversations you've had with the adjuster and supervisors
• Copies of all your correspondence

You can also file a complaint with the Better Business Bureau (BBB), or sue the insurance company in small claims court.

Contact the National Association of Insurance Commissioners

The National Association of Insurance Commissioners (NAIC) is a nonprofit, nonpartisan organisation that provides support to insurance regulators. It is governed by the chief insurance regulators of the 50 states, the District of Columbia, and the five US territories: American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands.

The NAIC sets standards and establishes best practices for the US insurance industry. It also provides information and resources to consumers. Insurance products sold in the US are largely regulated by the states, rather than the federal government.

The NAIC's regulatory goals are to:

• Protect the public interest
• Promote competitive markets
• Facilitate the fair and equitable treatment of insurance consumers
• Promote the reliability, solvency, and financial solidity of insurance institutions
• Support and improve state regulation of insurance

The NAIC offers a number of tools for consumers, including its Consumer Insurance Search tool, which helps consumers research specific insurance companies, including any complaint data the NAIC has collected. Companies are scored on a national complaint index, showing whether they have received more or fewer complaints than other insurers, adjusted for market share.

For consumers who wish to register a complaint, the NAIC website has a File a Complaint tool, with links to state insurance departments for further information on the process.

The NAIC's central office is in Kansas City, Missouri, its executive offices are in Washington, D.C., and the Capital Markets & Investment Analysis Office is in New York City. The phone number for the NAIC is (202) 471-3990.

Seek legal advice or representation

Seeking legal advice or representation is often necessary when dealing with complex or contentious issues that require a professional understanding of the law. Here are some steps and considerations to help you seek legal advice or representation:

Understanding Legal Advice and Representation:

• Legal Advice: Legal advice refers to the services provided by an attorney to help individuals represent themselves in court (pro se). Attorneys offering legal advice will provide their professional opinion on how to best resolve a legal problem. This can include helping with writing petitions or court documents, explaining court orders, suggesting strategies, and providing guidance on what to say or avoid saying in court.
• Legal Representation: Legal representation occurs when an attorney represents a client's interests in court. In this arrangement, the attorney handles various aspects of the court case, such as filing court documents, scheduling court dates, delivering arguments, and negotiating on the client's behalf.

Steps to Seek Legal Advice or Representation:

• Identify Your Legal Issue: Clearly understand the nature of your legal problem. Are you dealing with employment issues, family law, personal injury, insurance claims, or something else? This will help you find the right legal advisor or organisation specialising in that area.
• Check Your Resources: Before seeking external help, review your resources. Do you have legal expenses insurance as part of your existing policies (e.g., car or home insurance)? Are you eligible for legal aid or pro bono services? These options can provide free or low-cost legal assistance.
• Find the Right Legal Professional: If you are not eligible for free legal aid, you will need to find a legal advisor or solicitor with experience in the relevant area of law. You can search for legal advisors through official government websites or seek referrals from organisations specialising in your type of legal issue.
• Consider Your Options: Depending on your financial situation and the complexity of your case, decide whether you need full legal representation or if legal advice will suffice. Full legal representation tends to be more costly but ensures that your attorney handles most aspects of your case. Legal advice is often more affordable but requires you to represent yourself in court.
• Understand the Costs: Legal services can be expensive. Be sure to clarify the fees involved and determine whether you can afford them. Some organisations offer free or discounted legal services based on income eligibility.
• Prepare Your Information: Gather all relevant information and documents related to your case. This includes any correspondence, evidence, witness statements, medical records, and other supporting documentation. Having this information readily available will assist your legal advisor in understanding your case and providing appropriate advice.
• Follow Through: Once you have sought legal advice or engaged legal representation, follow the recommended steps provided by your legal professional. This may include taking specific actions, gathering additional evidence, or proceeding with legal proceedings.

Reporting an Unethical Insurance Adjuster:

To report an unethical insurance adjuster, you can follow these steps:

• Document the Issue: Gather evidence of the adjuster's unethical behaviour, including any correspondence, witness statements, or other relevant information.
• Contact a Supervisor: Before filing a formal complaint, consider contacting the adjuster's immediate supervisor or the claims manager. They may be able to resolve the issue or provide a fresh perspective on your claim.
• File a Formal Complaint: If the issue persists, you can file a formal complaint with the insurance company and the relevant state insurance department. Provide details of the adjuster's unethical behaviour, including delays, unfair settlement offers, improper tactics, and the number of unsuccessful attempts to resolve the matter.
• Consider Legal Action: If the insurance company fails to address your concerns satisfactorily, you may need to seek legal representation and consider filing a lawsuit, especially if you can prove that the insurance company acted in bad faith.

Notify the insurance company of bad faith

If you believe your insurance claim is being handled in bad faith, you should notify the adjuster, preferably in writing. Most insurance companies would rather resolve the issue directly than risk a bad faith lawsuit.

Before you notify your insurance company of bad faith, it is important to understand the roles and goals of an insurance adjuster. The primary role of an insurance adjuster is to examine personal injury or property damage claims to determine how much an insurance company should pay the claimant for their loss. They will review what happened and estimate the claims payment. The adjuster may inspect the damages, look at police reports, talk to witnesses, or ask for more information when reviewing your claim.

• Try to be there when the adjuster inspects the damage to your property.
• Ask when you should expect the insurance company's offer.
• Get the adjuster's contact information and the best time to call.
• If you have trouble reaching the adjuster or other issues, contact the insurance company.
• If you disagree with the adjuster's estimate, tell the insurance company why.

If you are unable to resolve the issue with the adjuster, you can ask to speak to their supervisor or the claims manager. If this does not work, you can mention the possibility of a complaint and bad faith lawsuit. If this also does not work, you can file a complaint with the insurance department in your state.

If you believe that an insurance adjuster is acting unethically or unprofessionally, you can report them to their employer. The best way to do this is to draft a letter outlining your claim of bad faith and referencing the adjuster's name and specific conduct or behaviour that constituted bad faith.

Frequently asked questions