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.
Foolish to Repeatedly Disobey Court Orders
All That Remains For Trial Is Plaintiff’s Damages On Each Of These Claims And Establishing Proximate Causation Of Those Damages.
Post number 5348
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In Linh Wang v. Esurance Insurance Company, No. C24-0447-JCC, United States District Court, W.D. Washington, Seattle (May 1, 2026) John C. Coughenour, United States District Judge, found that throughout this case, culminating with its briefing on Plaintiff’s renewed motion and that Defendant has subjected Plaintiff to unnecessary motion practice for clearly discoverable information and made dubious representations (including to the Court).
FACTUAL BACKGROUND
This case involves an underinsured/uninsured motorist insurance bad faith claim arising from a 2017 motor vehicle collision. The plaintiff, Linh Wang, alleges that Esurance Insurance ...
The Right to Negotiate with Insurer is Not an Assignment of Claims
Post number 5347
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Nebraska Requires an Actual Assignment to Allow Contractor to Sue Insurer
In Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter v. Farmers Mutual Insurance Company of Nebraska, also known as Farmers Mutual Insurance, also known as Farmers Mutual, No. A-24-818, Court of Appeals of Nebraska (May 5, 2026) Millard sued Farmers as an assignee of Jane Anzalone who had hired Millard Gutter to repair the roof of her home and agreed to allow Millard Gutter to coordinate with her insurer, Farmers Mutual, concerning reimbursement for repairs authorized under her insurance policy.
FACTUAL BACKGROUND
In ...
Attempt to Withdraw Plea After Sentencing Fails
Post number 5346
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Stealing from Insurers and Employer Gets Defendant Five Years in Prison
In State of Wisconsin v. Jacquelyn R. Harris, No. 2025AP489-CR, Court of Appeals of Wisconsin (April 22, 2026) Harris pled no contest and was found guilty. She was sentenced to five years of initial confinement and three years of extended supervision, with restitution ordered in the amounts of $31,086 to Kaliber and $25,000 to Erie Insurance Company.
FACTUAL BACKGROUND
In late 2022, Jacquelyn R. Harris was charged with theft in a business setting under WIS. STAT. § 943.20(1)(b) (2023-24). Harris, while employed as the office manager for Kaliber Collision Repair in Port ...
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Life Settlement Agreements Lose Money When People Insured Live Long
Life Settlement Organization Fails to Pay Investors
Post number 5350
In Luis Ramiro Aviles, et al., Fraida Kahan, Saul Raznoszczyk v. Wells Fargo Bank, N.A., Wells Fargo Delaware Trust Company, N.A., Wells Fargo Bank Northwest, N.A., Atc Realty Fifteen, Inc., et al, No. 25-312-cv, United States Court of Appeals, Second Circuit (May 8, 2026)
FACTS
Plaintiffs are investors in Lifetrade funds that invested in “life settlements” (purchasing life insurance policies, paying premiums, and collecting death benefits). In 2008 Lifetrade obtained a one-year, up to $500 million credit facility from Wachovia, later assumed by Wells Fargo after its acquisition of Wachovia.
Lifetrade failed to meet payment obligations, triggering a “Termination Event” and giving Wells Fargo UCC secured-party default remedies. After default, the parties negotiated a consensual strict foreclosure ...
Order Denying Insurer’s Motion to Dismiss Insured’s Third-Party Complaint Against Insurance Agency
Post number 5349
Insurance Agents Must Honestly Report Coverage In Policy Obtained
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In Golden Bear Insurance Company v. SBD Enterprises, Inc. d/b/a America Wild West, SBD Enterprises, Inc. d/b/a America Wild West, Third-Party Plaintiff v. FMSI Upper Plains, L.C. d/b/a Revo Insurance Alliance, Nos. CV 25-71-BLG-DWM, CV 25-73-BLG-DWM. United States District Court, D. Montana, Billings Division (May 7, 2026)
FACTS
Two firearm-related incidents occurred at the America Wild West bar in Billings, Montana (Feb. 2023): (1) a patron (Xavier Buffalo) fatally shot Beau Harlan Beaumont in the parking lot after an altercation and removal from the bar; and (2) bartender David Simmons pointed a handgun at patrons Derek Coffman and Guadalupe Garza and fired at least once, striking no one.
...
It is Fraud to Make the Same Claim Twice
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Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
