Archive for February, 2013

10 Steps to Improve Comparative Negligence Assessment in your Claims Organization

“What do you mean I’m at fault for the accident?” says the irate claimant.

“I didn’t say you were entirely at fault, but you were partially at fault,” replies the adjuster.

“[Expletive], get your supervisor on the phone,” the claimant yells. 

Within a matter of minutes, the adjuster is told by his boss to pay the claimant the entire amount of their damages.  “He threatened to get an attorney,” says the exasperated supervisor. 

These are often the first few steps taken on the path of least resistance in an industry where comparative negligence remains one of the greatest obstacles to achieving accuracy in outcomes.   As an industry, an estimated 3% of claims are paid with a comparative negligence assessment.   Compare this to juries, where more than half of all claims adjudicated have shared liability.   How is it that untrained jurors excel in an area where trained adjusters flounder?  The bigger question is what claims organizations can do to overcome this often ingrained behavior? 

The key to success is to first recognize that there is a problem.   Perhaps your company excels in comparative negligence assessment with shared liability routinely taken on intersection accidents, slip and falls and liquor liability claims.   Or, if you are like many in the industry, you spend hours pulling your hair out over the ubiquitous assessments of 100% liability.   As an industry veteran, I was most certainly part of the latter.  

The good news is that improvement is not only possible, it is highly probable when certain key steps are taken.   The following ten steps enable organizations to move the bar from ordinary to extraordinary

1)      Everything starts with management.  Organizational leaders must do more than simply say “we need to improve comparative negligence assessments.”  That is somewhat akin to the owner of the Jacksonville Jaguars saying we need to win more games.    People know what needs to be done, but often lack the leadership, roadmap and tools to succeed.  

2)      Don’t enable the path of least resistance.  If managers routinely allow adjusters to take this path, it becomes culturally embedded in the organization.   In the opening example, the adjuster became flustered and the supervisor took on the role of the appeaser.  No harm, no foul; right?  Wrong.   If your child throws a tantrum every time they don’t get their way, do you give in?  No, we take the time to explain our position and why they were in the wrong.   By providing consistent and educational feedback our children become civil and responsible adults.   

3)      Educating our staff and our customers is the key to success.   People by their very nature don’t like to be at fault.  After all, we live in a society where someone else is to blame.  Just Ask Gary, or the myriad of attorney’s that flood the airwaves with commercials telling us we are never at fault, no matter how guilty or irresponsible we may be.  Customers need to be informed, but to do so, those informing must be well apprised of the laws and have the ability to explain them in words that the average person will understand.   “Sir, the law in California provides that each party is responsible for their percentage of fault.  I understand that you had the right of way, but our insured had crossed 80% of the intersection when  you struck the rear corner of his car.  Based upon the points of impact and the insured control of the intersection,  we are assessing a percentage of fault against you.”

4)      Don’t rationalize overpaying claims out of fear of litigation.   When a person threatens an attorney, they will quite possibly retain one whether you appease them or not.   The difference is that paying 100% up front just made the job of getting an accurate BI settlement that much more challenging for the injury adjuster.   That said, there are times when candid discussions can take place early on and perhaps achieving a mutually satisfactory settlement includes compensation for inconvenience, such as a BI cashout, in exchange for a full release of all claims.

5)      Improve negotiation skills is the key to effectively resolving claim disputes.   It is incumbent upon the adjuster to develop a framework for their negotiation strategy, understanding their key arguments while anticipating those of the claimant or attorney.  Like many aspects of claims, negotiation is a skill that must be consistently honed in order to be highly effective.   As claims leaders, it is incumbent upon is to provide adjusters with the training, knowledge and tools to become highly effective negotiators.

6)      Improve arbitration skills as a percentage of claims where comparative negligence is assessed will be handled by the claimant carrier, who will in turn assert subrogation rights.    In some cases, negotiation simply isn’t enough to sway the other party.   The key to success when arbitration ensues is to have skilled negotiators who can write compelling contentions and responses that will sway impartial arbiters.   Nothing loses arbitration faster than a busy adjuster rushing their response or even worse, simply failing to respond.   Recognizing this challenge, some of the most effective organizations have consolidated the subrogation and arbitration response process with staffing neutral, centralized workgroups that excel in what they do, thus freeing up adjusters to be more productive on front end claims handling. 

7)      Calibrating the organization from top to bottom so as to recognize where individuals or groups may be challenged in fundamental liability knowledge.   Not every person has the innate ability to recognize and theorize liability.  By facilitating sessions to benchmark, organizations can isolate opportunities much faster in order to most effectively implement process improvement and quality assurance.  

8)      Don’t reinvent the wheel, as there are others who have overcome very similar obstacles.   In my own claims organization, we struggled with inconsistency  and some taking the path of least resistance.  By leveraging proven solutions, in our case Mitchell International’s ClaimIQ, we were able to exponentially improve our comparative negligence assessments with a quantifiable bottom line impact. 

9)      Recognize that tools alone won’t get the job done.   Much like building a house, tools are required but the final product also requires a foundation and framework.  Rather it is the combination of the right tools, the right leadership and the right people in the right seats that ultimately get the job done.  

10)   Never underestimate the power of measuring success.   Simply saying “I want to double comparative negligence results” isn’t enough.    It requires an action plan with an all of the above approach to gain a competitive advantage.   It is important to not only measure improvement, but we wary of potential unintended consequences.   Consider one measurement such as increased subrogation referrals, a natural byproduct of increased comparative negligence recognition.  What if subrogation referrals closed with no recovery suddenly spike?  This may be indicative of bad adjuster behavior.  By having both measures and counter measures it becomes possible to focus on both good and bad behaviors, again providing the ability to quickly isolate and remedy problems.

As discussed in Blocking & Tackling: The Playbook for the Winning Claims Organization, the secret to success is often rooted in fundamentals.   Consider why the “go to” play in football is running between the tackles.   It certainly isn’t glamorous and usually doesn’t result in a long run for a touchdown, but it works.   If a team is able to gain 3.5 yards on a consistent basis they will routinely get first downs.   This enables them to control the clock, limit the possession of opponents and win more games.  Just as championship caliber teams are built upon the execution of fundamentals, so too are world class claims organizations. 

Christopher Tidball is a claims consultant, author and speaker.  He is a claims veteran specializing in facilitating organizational improvement.   To learn more, please visit



February 22, 2013 at 8:35 am Leave a comment

It’s a bird, it’s a plane, it’s a meteor crashing into my house…

With a meteroral near miss last week, those of us in the risk industry must ponder the question “what if?”  According to reports from Russia, there were thousands of injuries and extensive property damage from a meteor crashing through the atmosphere.  What if that damage had been in New York, Miami or San Francisco? 

While insurance policy language often differs, there is typically coverage for “falling objects”.  Even if the object didn’t fall directly on the damaged property, there can potentially be damage from the concussive explosion as the meteor enters the atmosphere.  This would also be covered, as an explosion.  

Of course, the final determination is based upon the language within the contract of insurance.  These typically contain “open perils” or “specified perils”.  Open perils will cover anything that is not specifically excluded.  Specified perils will cover only what is specifically listed as being covered, but typically does include “falling objects” and “explosions”.

The good news for those of us watching the spectacle over Russia unfold is that such severe events are extremely rare, perhaps occurring once every century.  In fact, it is estimated that earth is hit with about 40 tons of space debris annually.    While the chances of damage to personal property is minimal, it can be catastophic, as evidenced by the demise of the dinosaur some 65 billion years ago. 

The bigger concern for the insurance industry is if such an event unfolded over a populated area of the United States.  The insurance industry has seen large scale events such as Hurricane Sandy, that cost tens of billions of dollars.   Could the industry afford such a direct meteor to a major metropolitan area? 

Consider the scenario of a meteor of similar size to what struck Russia coming into the atmosphere over Manhattan and crashing into the Long Island Sound.   It could potentially blow out a significant portion of windows in crowded buildings, collapsing roofs and causing objects to fall onto cars.   Certainly the property damage would be significant, and there would likely be disputes regarding settlement values.  But what about the injuries?  After all, we live in a society always looking to find someone to blame. 

Again, much of the coverage for injuries sustained would rest with the guiding policy language for coverage’s such as Medical Payments, or Personal Injury Protection, if injured while occupying a motor vehicle.   According to the New York PIP statute, coverage would apply to the injuries of a “named insured and any relative who sustains personal injury arising out of the use or operation of any motor vehicle”.  Absent any exclusions, a person occupying, getting into or out of a motor vehicle when the meteor strikes could potentially claim injuries under this coverage.  

Another area ripe for the creativity of the plaintiff’s bar would be liability coverage for those injured while on the premises of another.   Should the owner’s have taken the proper precautions to ensure that glass or roofs could withstand such a meteoric impact.  Of course, this would be a question for juries to decide, which could prove to be such a costly proposition that settling such claims may become the more economical option. 

Additional challenges arise as fraud rears its head.  Downstate New York is notorious for fraudulent insurance activity, and such a disaster provides yet another means for unjust enrichment.   Some may seek treatment for injuries never sustained.   Unscrupulous medical providers may engage in deceptive billing practices, such as upcoding or unbundling medical bills being charged to unsuspecting insurers with staff working overtime to keep on top of the massive influx of meteor related claims.   In the end, the cost of the catastrophe will be borne by the insurance paying public. 

Most certainly we should hope that such a cataclysmic event never happens anywhere in the world.  That said, it is important to recognize that nothing is out of the realm of possibility and we, as an industry, need to be prepared.  

The best preparation is to effectively executive on the basic blocking and tackling for the claims that we routinely see.  By sussing out fraudulent activity, we become better attuned to recognizing legitimate claims in good times, and in bad.   By having the right tools in place, triaging claims and recognizing red flags, we build a core of experience that can readily identify the legitimate claims, irrespective of cause, improving outcomes and accuracy.  

Christopher Tidball is a claims consultant, speaker and author of multiple books including “Blocking & Tackling: The Playbook for the Winning Claims Organization.   He is an industry veteran having worked with multiple top tier insurance carriers.  To learn more, please visit

February 18, 2013 at 10:30 am Leave a comment

The Harbaugh Way of driving success

All it took was a thirty minute power outage to turn a pretty unimpressive game into one for the ages.   The 2013 Super Bowl began to take on the look of a blowout as the Ravens racked up a commanding halftime lead.   The commercials seemed a little less funny than in recent  years and the halftime performance was only slightly better than the 2011 Black Eyed Peas debacle.   Then the power went out and everything changed.

Why is it that a 30 minute reprieve from being demolished by Ray Lewis and company was all that the San Francisco 49’ers needed to change the tone of the game?  A lot of the credit goes to coach Jim Harbaugh, who nearly pulled a rabbit out of the hat against his brother John. 

The Harbaugh way of coaching is something that any business leader can learn from.   There are five key tenets that drive success both on and off the field, and certainly transcend any organization. 

1)      Make decisions and take responsibility for those decisions.   If a player commits, he must follow through on that commitment.  The same holds true for a manager or an employee.  Let’s face it, we all make good and bad decisions.   We benefit from the good and must learn from the bad.  This approach makes us all stronger in the end. 

2)      Give credit to players in public, while dispensing criticism in private.   This is equally important in the business world.   It is important to acknowledge success and shine a light on accomplishments.  The same is not so for criticism, which shouldn’t be levied in a public forum where it can be misunderstood, embarrassing and causing resentment.   By turning criticism into a coachable moment, it offers those being coached a chance to excel in the long run.

3)      Inspiring passion among players with the occasional sideline outburst.   Passion is the key to success in anything we do.  If one isn’t passionate about their vocation, they should find something they are passionate about.   It is this passion that drives success, as this behavior becomes contagious throughout any organization.

4)      Understanding the difference between leading and managing.   A manager is simply doing a job; much like a babysitter.  They aren’t truly leading . Managers get people do to something because the manager wants them to do it; leaders get people to do something because the people want to do it.   The Harbaugh brothers have unique leadership skills in that they are leading teams comprised of players who want to succeed.   This is a challenge in many organizations, in particular claims organizations, where management is following the rigors of the status quo, rather than leading teams and fostering innovation.

5)      Offering players a unified vision of goals and how to achieve those goals.   The goal is more than just a championship.  It is one of being a perennial winner, on and off the field.   The same holds true in our organizations, where we want to be the best in the industry, but also away from the office where we can have successful marriages, happy families while also being spiritual and civic leaders.  

Throughout the course of this past season, the Harbaugh way of coaching resulted in much success in both Baltimore and San Francisco.   Against the odds, both teams made it to the big dance.   There was little expectation that #4 seed Baltimore could get by both Denver and New England, on the road.   Then there was San Francisco, who had benched starting quarterback  Alex Smith mid season in favor of the young Kyle Kaepernick with the uphill battle of beating Atlanta on the road to claim the NFC championship.  

But this is the Harbaugh style where change and influence management made a believer out of players and fans alike.   It is the ability to adapt to the situation and recognize that the status quo will not deliver success.   It is this very lesson that separates the ordinary from extraordinary in the business world as well.  

According to Bill Reckmeyer,  a leadership professor at San Jose State University, “It is clear that his players have an awful lot of respect for him.  If people are willing to run through a brick wall for you, there is really good leadership going on.  If not, you have bad morale and passive-aggressive behavior. 

The respect for the Harbaugh brothers, in particular Jim, is that they are not afraid to make tough decisions even if those decisions may come under fire.   True leaders recognize that all the weight is on their shoulders and that sometimes they simply have to make a decision and go with it.  

Of course, as observers we can learn as well.  We can take these key lessons into our own organizations and be the catalyst for success.  We can think outside the box and recognize that the surest way to fail is to adhere to the status quo.  By recognizing the evolving world around us and embracing new and innovative ideas, we can be the leaders that take our organizations to the top of our respective industries thus gaining a competitive advantage in an increasingly difficult marketplace. 


Christopher Tidball is an executive claims consultant, speaker and author of multiple books including Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary and Blocking & Tackling: The Playbook for the Winning Claims Organization.   He is a claims veteran having held numerous adjusting, management and leaderships with multiple top ten P&C insurers.  To learn more, please visit

February 4, 2013 at 8:06 am Leave a comment

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Chris Tidball is a claims and revenue management consultant and author of the "20 Essential Rules" series of self and organizational improvement books. You can ask him a question at

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