Understanding the Claims Process in the E&S World
Posted in Claims
Author: Adam Benda
No one looks forward to filing a claim. Going through the adjusting process and waiting for reimbursement can be frustrating, especially if it seems like the claim is not moving as fast as your insured would like. If you’ve ever filed a claim with a General Agent, like us, you might perceive the process as slower than with standard carriers. Don’t get me wrong, claims with an E&S carrier can move just as quickly as a claim with a standard carrier. However, as a Claims Representative, I am often asked by agents why the process is not as quick as their standard markets. The speed of E&S claims tend to be influenced by many factors including the location of the loss, layers of claim handling, and the complexity of the coverage.
Location, Location, Location
Standard carriers are already admitted in the states where they are writing, and normally have some form of physical presence. Their physical presence in an area typically means that claims are handled in-house directly by the carriers adjuster who may have a local office. This allows standard carriers to have faster turnaround times and quicker settlements. Claims with non-standard (E&S) carrier on the other hand often begin outside the state that the claim occurred and will most likely be contracted to an outside adjuster or third party administrator (TPA). This causes E&S claims to have multiple layers of claim handlers.
MGA Claims Have Layers
Unlike a standard carrier who often has the advantage of a local presence, E&S claims often pass through many hands. Once an E&S carrier receives a claim it will get assigned to an in-house claim examiner. From there, a third-party adjusting firm will be hired who will then hire a local field adjuster. It may take the loss notice a few days to move through these layers of setup and assignment before the insured is contacted. Communication moves between these layers from the field adjuster, to the TPA, to the carrier, then back down the chain until the claim closes. All the authority in the claim is held by the E&S carrier’s in-house examiner. However, it is the local field adjuster’s role that is the most important. How the field adjuster handles the claim can profoundly affect the insured’s claim experience.
Field adjusters are responsible for contacting the insured, performing inspections, hiring specialists and contractors, and a multitude of other functions that happen behind the scenes of a claim. Many of these functions will require the field adjuster to seek permission from the E&S in-house examiner to execute. With a standard carrier, typically a single adjuster handles all functions and has the authority to adjust and settle the claim. The various E&S claim handlers have another daunting task and that is trying to interpret and communicate coverage found in complex and custom policy forms.
E&S Forms are not Created Equal
The complexity of the coverage that E&S carriers write can be a major factor in claim handling. Excess & Surplus markets have more leeway with coverage than standard carriers resulting in a lot of different and specialized forms. These custom policies take more time for claims adjusters to analyze and interpret. They may also require a specialized field adjuster to handle the claim and these specialists could be hundreds of miles from the loss location. The standard carrier
adjuster has the benefit of set policy forms that have little to no variation from one policy to the next. Whereas the policy forms on an E&S policy can be filled with unique coverage triggers and exclusions. Because of these custom triggers and exclusions, claims must be fully investigated before an adjuster can determine if the carrier should cover or deny the loss. This is one reason a JM Wilson associate cannot confirm or deny coverage when presented with a claim scenario. So, what is JM Wilson’s role in all of this?
What is an MGA’s Role in the Claims Process?
Our role in the claims process is to make sure the claims process runs smoothly. This includes:
- Managing claim intake from the agent or carrier.
- Assisting the agents and adjusters when things aren’t progressing
- Keep communication flowing between both parties
- Tracking claims to ensure payouts and reserves are up to date
- Contacting agents when claims close.
What can Insureds and Agents do to Speed Up the Claim Process?
Insureds and agents can help the process move along in three ways:
- Follow our 7 Point Claims Checklist when submitting information
- An insured should report the claim to their agent who then contacts the MGA. That way if issues arise during the claims process the MGA can provide the proper (and quick!) assistance.
- Always contact the claims representative rather than your underwriter with questions. This will save you time as your underwriter is likely going to need to consult a claims representative to answer your question.
Your MGA claims representative is advocating for both the insured/agent and the carrier. As a claims rep for JM Wilson, our duty is to assist in the claims process and to facilitate communication between the agent and carrier. We hope to help you have the best claim experience possible.