How Giving No Quarter Worked
Read the full article at https://www.linkedin.com/pulse/insurance-fraudsters-deserve-quarter-barry-zalma-esq-cfe/ and at https://zalma.com/blog plus more than 4150 posts.
How Giving No Quarter Worked
Many years ago a client I represented was offended that an insured tried to defraud him and the people who were names in the syndicate he represented at Lloyd’s, London. I walked the Underwriter through the debris of the house that was burned, showed him some of the remains of the allegedly highly valuable fine arts, and then explained how he was deceived into issuing the policy. I was the attorney for Lloyd’s underwriters for the fine arts and Imperial Casualty for the homeowners policy. Once it became clear to the Underwriter I was given the following instruction:
“Take No Prisoners!” The military instruction to give no mercy to the enemy. Typically if you give or grant no quarter, you treat someone—usually an opponent or foe of some kind—harshly. You don’t take pity on them or give them any leeway or concession. That is what I did. The claim was denied, the policy was rescinded, and the bad faith suit that resulted was litigated without quarter or concession. It took more than five years, a motion for summary judgment, an appeal, and eventually a judgment in favor of the insurers that resulted in payment to the insurers of every dollar advanced and every dollar expended in investigation and defense of the bad faith suit. That was followed by suits against the claims adjuster, death threats and a bomb threat that took 15 years of my professional life. The appellate decision can be read at Imperial Casualty & Indemnity Co. v. Sogomonian, 243 Cal.Rptr. 639, 198 Cal.App.3d 169 (Cal. App. 1988).
After Mr. Sogomonian and his co-defendants were compelled to pay fraudulent claims against Imperial and the Lloyd’s underwriters dropped precipitously. Giving no quarter to a fraud perpetrator not only defeated a fraudulent claim but deterred others from attempting fraud.
The Imperial v. Sogomonian case and many similar cases is why I am convinced that giving no quarter to a fraud perpetrator is the best way to deter and defeat insurance fraud and why I wrote this book to convince more insurance professionals to emulate the insurers that defeated the Sogomonian attempt at fraud.
How to Proactively Work to Defeat or Deter Insurance Fraud
Available as a Kindle Edition, a Paperback or a Hardcover
What every insurer should know about how it can be proactive in the efforts against insurance fraud by refusing to pay every fraudulent claim, by refusing to settle litigation brought by fraud perpetrators and by proactively taking the fraud perpetrators to court by seeking damages for common law fraud and take the profit out of insurance fraud.
No one knows the true extent of insurance fraud because most attempts at insurance fraud succeed. Estimates are extrapolated from those few people who attempt insurance fraud that are caught.
Insurance fraud is a crime in most states of the United States and in most countries the usual victims of the crime of insurance fraud are insurers. Some creative people have created fraudulent insurance companies that exist to defraud the insurance buying public who acquire insurance from the fraudulent insurers.
The crime of insurance fraud is ubiquitous and is committed by every race, gender, national origin, religion, or sexual orientation.
Unlike other victims of crime state legislatures require insurers create special investigative units (SIU) to thoroughly investigate all potential insurance fraud and present evidence to the authorities so that they can prosecute insurance fraud. Unfortunately, experience of the insurance industry has established that even when the insurer’s SIU presents a case to the state’s Fraud Division or Fraud Bureau for criminal prosecution, it is rare that a prosecution is commenced and a conviction obtained.
State insurance departments brag about convictions in double digits when they receive as many as 1500 reports of suspected fraudulent claims every 30 days. Prosecutors dislike insurance fraud cases because they are usually document heavy while an assault, rape, murder or drunk driving are usually summarized by a single police report and are, therefore, relatively easy to prosecute to a jury or obtain a plea of guilty.
Some insurers are buying Artificial Intelligence software to detect insurance fraud. Others hire retired police officers to operate the SIU and ignore their experienced insurance claims handlers.
Most do the minimum necessary to fulfill the requirements of the anti-fraud statutes and regulations concluding that it is better to pay the fraudsters than to fight fraud attempts proactively.
All insurers and those who regulate insurers agree that regardless of where the insurance is sold, regardless of where the promises made by an insurance policy are required to indemnify an insured, insurance fraud is a serious problem for the insurance industry. All attempt to deter or defeat insurance fraud to one extent or another.
All recognize that if there is an insurance claims that is denied for fraud it is axiomatic that the insured, so accused, will file suit for breach of contract and for the tort of bad faith. Bad faith lawsuits, even when they fail, take the value out of the effort to deter or defeat insurance fraud since defense of the bad faith suit will usually exceed the amount of the claim that was denied.
On an individual claim basis it is never cost effective to reject the claim for fraud. However, knowledgeable insurance fraud investigative professionals recognize that an aggressive effort against insurance fraud, refusal to pay a settlement to avoid litigation, and forcing the fraud perpetrator to litigate through trial and appeal will become known to those who make a living defrauding insurers, that the insurer is not a pushover and will avoid fraud attempts against that insurer and move to insurers the fraud perpetrators know will pay rather than fight.
Available as a paperback here. Available as a hardcover here. Available as a Kindle Book here.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].
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The Professional Claims Handler
Post 5218
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-8-barry-zalma-esq-cfe-zdwsc, see the full video at https://rumble.com/v70zl4s-the-zalma-philosophy-of-claims-handling-part-8.html and at https://youtu.be/MIYcF71ffRQ, and at https://zalma.com/blog plus more than 5200 posts.
Claims Commandment X – Thou Shall Not Pretend to be a Lawyer
Some experienced and professional claims people know the law in their area of expertise better than most lawyers.
Adjusters should be adjusters and leave lawyering to lawyers. Similarly, lawyers should be lawyers and never try to be adjusters.
Claims Commandment XI – Thou Shall Empathize With the Claimant
Everyone presenting a claim is unhappy, disturbed, shocked, injured and needs help.
Empathy is identification with and understanding of another’s situation, feelings, and motives. It is the ability to understand another person’s circumstances, point of view, thoughts, and feelings....
HOW TO CREATE AN EXCELLENCE IN CLAIMS HANDLING PROGRAM
See the full video at https://rumble.com/v70wb2i-the-zalma-philosophy-of-claims-handling-part-6.html and at https://youtu.be/tL5nDKPEs40 and at https://zalma.com/blog plus more than 5200 posts.
Post 5217
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
An Excellence in Claims Handling program begins with a statement in the insurer’s claims manual or statement of professionalism that it is dedicated to providing excellence in claims handling to every insured who presents a claim.
The excellence in claims handling program should include, at a minimum:
A series of lectures supported by text materials explaining:
A definition of insurance.
How to read and understand an insurance policy.
How to interview an insured, witness, or claimant.
How to assist an insured in the insured’s obligation to ...
The Professional Claims Handler
Post 5216
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-5-barry-zalma-esq-cfe-jde8c, see the full video at https://rumble.com/v70q4x8-the-zalma-philosophy-of-claims-handling-part-5.html and at https://youtu.be/6b9tZQsEkB4, and at https://zalma.com/blog plus more than 5200 posts.
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
Standards to be a Professional Claims Adjuster
The Insurance claims professional should be a person who:
1. Can read and understand the insurance policies issued by the insurer.
2. Understands the promises made by the policy.
3. Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
4. Are competent investigators.
5. Have empathy and recognize the difference between empathy and sympathy.
6. ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
