Toronto Sun – Adjusters forgetting ethics

I’d suggest insurance adjusters invest in new fax machines and get more organized.

By Alan Shanoff ,Toronto Sun
First posted: Saturday, November 05, 2011

“The Adjuster shall so act as to promote public confidence in insurance companies through fair and conscientious dealing, and shall refrain from any fraud, deceit, misrepresentation, dishonest non-disclosure, undue influence or other mischievous practice.” — The Code of Ethics of the Ontario Insurance Adjusters Association.

Do you think insurance adjusters hired by the City of Toronto to handle property damage claims submitted by residents read their own code of ethics?

You’d be hard pressed to believe so after reading the city Ombudsman’s report describing what can only be seen as a systemic abuse of claimants.

Claims are routinely denied, with adjusters advising claimants investigations have been completed, when no investigation has been launched.

Files are closed without any communication, while residents wait for answers.

Do you think car insurance adjusters are better?

Consider this recent Ontario Superior Court of Justice decision in a lawsuit against Echelon General Insurance.

Edith Whorpole of Pefferlaw died in a horrible accident on Oct. 3, 2007.

Her brother, acting for the estate, submitted a claim for the loss of the vehicle.

He placed the value at $5,751 while the adjuster pegged it at $4,474.

The brother’s evidence was the adjuster said the loss would be paid, it was just a matter of “paperwork” and there was “no need to sue”.

The brother submitted a Proof of Loss in May and September of 2008.

With no response to the first and the adjuster denying receipt of the second, a third Proof of Loss was submitted Oct. 3, 2008.

But on Oct. 9 the adjuster sent a letter denying the claim, stating the one-year period to sue had expired.

If you think that bit of “gotcha” was bad, the adjuster, without notice, arranged for the smashed vehicle — still containing his sister’s blood — to be dumped on the brother’s driveway, blocking the entrance to the house. I can only imagine the distress that would have caused.

This was too much to take and the brother sued in October 2009, not just for the value of the car, but for punitive damages for breach of the duty of good faith and fair dealing.

Instead of a modest claim, now the insurance company faced a much larger suit along with attendant legal fees.

The insurer’s lawyer attacked the lawsuit, claiming it was brought too late, the one-year limitation period having expired.

Justice T. A. Heeney would have none of that argument. He dismissed the motion earlier this year, ruling the action should proceed to a trial.

Now consider another recent case where Ontario Superior Court Justice Wendy L. MacPherson tossed out a low ball settlement between an adjuster and an injured motorcyclist.

This on the basis an ING adjuster abused his position of power to enter into an unconscionable settlement.

These are but two cases. The Toronto Ombudsman’s review covered 12,449 claims, so it’s pretty clear adjusters need some schooling on their own code of ethics.

At the same time, I’d suggest adjusters invest in new fax machines and get more organized.

It’s amazing how often faxes appear to get lost and documents misplaced at adjusters’ offices, thereby delaying claims.

It’s also amazing how frequently adjusters refuse benefits or payments on the basis the item requested is “not considered reasonable and necessary.”

Of course the reason the item isn’t considered reasonable and necessary is rarely disclosed, so perhaps adjusters also need a remedial course in communication.

After all, as the Toronto Ombudsman informed us, city adjusters appear reluctant to advise claimants when their files have been closed, thereby leaving claimants twisting.

Look, we know there are good adjusters and not all are of the “deny and delay” school of thought, but clearly this is one industry in need of a course in remedial ethics.