DIRECT REPORTING OF CLAIMS BY CLIENTS TO CARRIERS:
Concerns:
An uncovered claim may be explained by “Your agency should have offered you that coverage” - thereby potentially upsetting the client even though there is documentation in the agency (electronic) file of the coverage being offered.
A coverage-enhancing opportunity may be missed because the agency won’t be talking to the client at the client’s most susceptible time. (Having a claim teaches the value of proper coverage better than anything else can.)
The agency may remarket an account to a new carrier without knowing its full claims history, thereby depriving the quoting carrier of the true underwriting picture.
The agency may not put together a procedure to track claims reported to the carrier so a claim may go far awry before the agency has a chance to intercede or help the client.
The agency loses an educational opportunity for staff to learn nuances of coverage and the importance of offering higher limits and optional endorsements.
Recommendations:
Ascertain with each direct-reporting carrier how the agency will be kept apprised of reported claims.
Some carriers (too few!) download all claims to agency management systems nightly. Some carriers fax or email individually throughout the day. Some report via claims registers (i.e. lists) daily, weekly, or monthly. Choose a method to stay in the loop and monitor it to make certain that it works.
The agency should determine its preferred tracking mechanism for directly-reported claims. Ideally, that procedure should include the entering of claims into its data base. Other less ideal procedures include working off the carrier’s system (via a dial-up or web-based access) or relying on the carrier to provide loss runs when the agency remarkets or has to replace an account.
Set up and monitor a non-optional follow-up procedure to ensure claims are kept on-track and the client is satisfied. (Remember, if only the carrier does its own satisfaction questionnaire, the message may be that the carrier cares more about the client’s happiness than you do.)
Give special attention to claims that are denied or not paid in full so the client understands the rationale and his/her options for future coverage.
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Copyright 2000 by Virginia M. Bates. Used with permission.
