In search of profit, insurers have decimated their professional claims staff. They laid off experienced personnel and replaced them with young, untrained, unprepared people. A virtual clerk replaced the old professional claims handler.
Process and computers replaced hands-on human skill and judgment. Money was saved on the expense side of the business by paying lower salaries. Within three months of firing the experienced claims people gross profit increased. The accountants were happy. The quarterly profits increased. None of the happy people were insurance professionals. None of them understood how a professional claims adjuster saves the insurer by establishing a fair amount of loss, avoiding payment for items not lost or overvalued, and by avoiding losses for which no coverage was provided by the policy.
The promises made by an insurance policy are kept by the professional claims person. Keeping a professional claims staff dedicated to excellence in claims handling is cost-effective over long periods of time. A professional and experienced adjuster will save the insurer millions by resolving disputes, paying claims owed promptly and fairly, and by so doing avoiding litigation and claims of breach of contract and breach of the covenant of good faith and fair dealing.
The professional claims person is an important part of the insurer’s defense against litigation by insureds against insurers for breach of contract and the tort of bad faith. Claims professionals resolve more claims for less money without the need for either party to involve counsel. A happy claimant satisfied with the results of his or her claim will never sue the insurer.
Incompetent or inadequate claims personnel force insureds and claimants to public insurance adjusters and lawyers. Every study performed on claims establishes that claims with an insured or claimant represented by counsel cost the insurer more than those where counsel is not involved.
Prompt, effective, professional claims handling saves money for both the insured and the insurer and fulfills the promises made when the insurer sold the policy.
Insurers who believe they can handle first or third party claims with young, inexpensive, inexperienced and untrained claims handlers should be accosted by angry stockholders whose dividends have plummeted, or will plummet, as a result. When an insurer compromises on claims staff, profits, thin as they may have been previously, will move rapidly into negative territory. Tort and punitive damages will deplete reserves. Insurers will quickly question why they are writing insurance. Those who stay in the business of insurance will either adopt a program requiring excellence in claims handling from every member of their claims staff, or they will fail.
Insurance is a business. It must change — this time for the better — if it is to survive. It must rethink the firing of experienced claims staff and reductions in training to save “expense.” Insurers should, if they wish to succeed, adopt a program to promote excellence in claims handling that can help insurers keep the promises made by the insurance policy and avoid charges of breach of contract and the tort bad faith in both first and third party claims.
Insurer Must Pay Damages Caused by its Insureds Negligence
Post number 5273
Read the full article at https://www.linkedin.com/pulse/defendant-started-fire-bed-liable-ensuing-damage-zalma-esq-cfe-ngjcc, see the video at and at and at https://zalma.com/blog plus more than 5250 posts.
Smoking in Bed Can be Very Expensive
In Spires Of Sherwood Owner, LLC v. Jackie Baker, Joseph Baker And First American Property & Casualty Insurance Company, No. 2025 CA 0541, Court of Appeals of Louisiana, First Circuit (January 24, 2026) Spires of Sherwood Owner, LLC owned the Spires of Sherwood Apartments and sued Jackie Baker, Joseph Baker, and First American Property & Casualty Insurance Company following a fire that occurred on June 19, 2019, in the Bakers’ apartment.
The fire caused damage to multiple units. Investigations by both parties concluded that the fire originated in Joseph Baker’s bedroom and ...
See the video at https://lnkd.in/grQRRWa5 and at https://lnkd.in/gH8gtAr2, and at https://zalma.com/blog plus more than 5250 posts.
Insurance Policy Exclusions Must be Enforced as Written
Post number 5272
Pollution With a State Permit is Still Excluded
In Griffith Foods International, Inc., et al. v. National Union Fire Insurance Company Of Pittsburgh, Pa, No. 131710, Supreme Court of Illinois, 2026 IL 131710 (January 23, 2026) Griffith Foods International, Inc., and its successor Sterigenics U.S., LLC, operated a medical-equipment sterilization facility in Willowbrook, Illinois. Local residents alleged that for over 35 years, the facility emitted ethylene oxide (EtO), which they claimed caused cancer and other serious illnesses.
The policyholders sought a declaration that National Union Fire Insurance Company of Pittsburgh, PA, was obligated to defend them in the underlying mass tort litigation, based on two CGL policies issued for the facility between September 1983 and September 1985.
The two policies required the ...
Coverage is Available for Bicycle Rentals not Excluded
Post number 5271
See the video at and at and at https://zalma.com/blog plus more than 5250 posts.
The Insurance Contract Never Indicated that Coverage was Limited to Activities Specifically Described
In Mollie R. Lerner v. Bela LLC d/b/a The Perch Hotel, et al., CIVIL No. 25-1546 (FAB), United States District Court, D. Puerto Rico (January 21, 2026) Plaintiff Mollie R. Lerner, a North Carolina resident visiting Puerto Rico, rented a bicycle from The Perch Hotel while staying at a nearby Airbnb. While riding the bicycle back, she encountered a steep hill and, upon attempting to brake, was unable to slow down. She lost control, fell over the handlebars, and was subsequently struck by a truck, resulting in serious injuries.
ALLEGATIONS
Lerner alleged that her injuries were caused by the Hotel’s negligence in maintaining...
You Get What You Pay For – Less Coverage Means Lower Premium
Post number 5275
Posted on January 30, 2026 by Barry Zalma
See the video at and at
When Experts for Both Sides Agree That Two Causes Concur to Cause a Wall to Collapse Exclusion Applies
In Lido Hospitality, Inc. v. AIX Specialty Insurance Company, No. 1-24-1465, 2026 IL App (1st) 241465-U, Court of Appeals of Illinois (January 27, 2026) resolved the effect of an anti-concurrent cause exclusion to a loss with more than one cause.
Facts and Background
Lido Hospitality, Inc. operates the Lido Motel in Franklin Park, Illinois. In November 2020, a windstorm caused one of the motel’s brick veneer walls to collapse. At the time, Lido was insured under a policy issued by AIX Specialty Insurance Company which provided coverage for windstorm damage. However, the policy contained an exclusion for any loss or damage directly or indirectly resulting from ...
Declaratory Relief Available to an Insurer from USDC
Post number 5274
Read the full article at https://www.linkedin.com/pulse/resolution-coverage-issues-appropriate-under-federal-barry-wfpoc, see the video at and at and at https://zalma.com/blog plus more than 5250 posts.
Insurer Seeks Limitation of Liability of Child Killed by Foster Dogs
In the Cincinnati Specialty Underwriters Insurance Company, an Ohio corporation v. Dennis Murphy, as Personal Representative of the Wrongful Death Estate of Avery Colin Jackson-Dunphy, Deceased; Patrick Admiral Dunphy, an Individual; Danika Thompson, an Individual; and Animal Services Center Of The Messila Valley, a New Mexico limited Liability Company, No. CIV 24-1039 JB/JFR, United States District Court, D. New Mexico (January 23, 2026) resolved the issues raised about the court's jurisdiction.
Cincinnati Specialty Underwriters Insurance Company ...
Posted on January 26, 2026 by Barry Zalma
Insurance Fraud Should Not be a Retirement Plan
More from Excellence in Claims Handling Substack for Subscribers Only
You’re reading, until you reach the paywall, from the free part of Excellence in Claims Handling until you reach the paywall. You should consider joining as a paid member to get full access to articles for members only, to our news, analysis, insurance coverage, claims, insurance fraud and insurance webinars, by clicking at the “subscribe” button below.
Health Insurance Providers Are Attempting Insurance Fraud to Fund Retirement
Every insurer is required by its shareholders, members, state statutes and state regulations to do everything possible to deter and defeat attempts at insurance fraud. Most insurers, therefore, have a staff of fraud investigators working under their Special Investigative Unit (SIU) and the SIU works to train the claims handlers to recognize the indicators or red flags of fraud.
Much to the surprise of...
