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.
Material Fact Not Proved Defeats Summary Judgment
Post number 5314
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In Peleus Insurance Company, on its own behalf and on behalf of Bais Yaakov Dkal Adas Yereim and BT General Builders, Inc. v. United Specialty Insurance Company, No. 24 Civ. 1398 (KPF), United States District Court, S.D. New York (March 23, 2026) Peleus Insurance Company (“Peleus”), on behalf of itself and insureds Bais Yaakov Dkal Adas Yereim (“Bais”) and BT General Builders, Inc. (“BT”), initiated an action against United Specialty Insurance Company (“USIC”) in the United States District Court for the Southern District of New York. Peleus sought declaratory judgment regarding USIC’s obligations to defend and indemnify its insureds in connection with an underlying personal injury lawsuit pending in the Supreme Court of the State of New York, Kings County. Both parties cross-moved for summary ...
ABSOLUTE IMMUNITY FOR COMPLAINTS TO DMV
Complaints Filed By The Defendants With The Department Of Motor Vehicles Were Entitled To Absolute Immunity
Post number 5312
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In Modzelewski’s Towing & Storage, Inc., et al. v. Government Employees Insurance Company et al., No. AC 47933, Court of Appeals of Connecticut (March 24, 2026) Modzelewski’s Towing & Storage, Inc., Chris’ Auto Clinic, LLC, MyHoopty.com, LLC, and Farmington Auto Park, LLC, initiated an action seeking damages for tortious interference with business expectancies and other relief. The dispute arose after complaints were filed against them by Government Employees Insurance Company (GEICO) and individual defendants John P. Vaz and Patrick Capri with the Connecticut Department of Motor Vehicles. The plaintiffs alleged that these complaints interfered with their business relationships.
LEGAL ISSUES
The central legal issue ...
DE FACTO PARTNERSHIP AFFIRMED
Implied In Fact Contract Can Only Exist However Where There Is No Express One
Post number 5311
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In Ronald Daigneault v. Danielle Kolashuk et al., No. AC 47259, Court of Appeals of Connecticut (March 24, 2026) Daigneault, owned and operated an auto repair business for approximately twenty-eight years. During this period, he and his daughter, the defendant D (Danielle Kolashuk), jointly operated the business. D’s husband owned Auto Magic, LLC (“A Co.”), which periodically stored towed vehicles on the business property. Disputes arose regarding the nature of the business relationship between the plaintiff and D, the use of business accounts, and payment for vehicle storage.
FACTUAL BACKGROUND
Ronald The plaintiff initiated an action seeking damages for, among other things, statutory theft and ...
ZIFL – Volume 30, Issue 7 – April 1, 2026
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post number 5314
Posted on April 1, 2026 by Barry Zalma
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ This issue contains the following articles about insurance fraud:
No One is Above the Law – Not Even a Police Officer
Police Officer Convicted for Fraud in Reporting an Accident Affirmed
Police Officer Should never Lie about Results of Chase
In State Of Ohio v. Anthony Holmes, No. 115123, 2026-Ohio-736, Court of Appeals of Ohio, Eighth District, Cuyahoga (March 5, 2026) a police officer appealed criminal conviction as a result of lies about a high speed chase.
Read the following article and the full issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/03/ZIFL-04-01-2026-1.pdf...
Posted on March 30, 2026 by Barry Zalma
Insurance Fraud, a Way to Reduce Violent Crime
Post number 5313
A Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story helps to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
She Taught Her Customers The Swoop And Squat:
Recently the California Insurance Department’s Fraud Division arrested a young woman in Los Angeles County for operating an insurance fraud school. She advertised her classes in the “Penny Saver” an advertising sheet distributed free to the public and a print version of Facebook, X Craig’s list. She had operated for several years teaching methods of committing automobile insurance fraud. Only after a police officer enrolled in one of her classes was she arrested.
Her defense ...
Posted on March 30, 2026 by Barry Zalma
Insurance Fraud, a Way to Reduce Violent Crime
Post number 5313
A Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story helps to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
She Taught Her Customers The Swoop And Squat:
Recently the California Insurance Department’s Fraud Division arrested a young woman in Los Angeles County for operating an insurance fraud school. She advertised her classes in the “Penny Saver” an advertising sheet distributed free to the public and a print version of Facebook, X Craig’s list. She had operated for several years teaching methods of committing automobile insurance fraud. Only after a police officer enrolled in one of her classes was she arrested.
Her defense ...
