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.
Liability Insurance Provides no Coverage for Damage to Insured’s Property
Post number 5283
Read the full article at https://www.linkedin.com/pulse/certificate-liability-insurance-policy-barry-zalma-esq-cfe-mteoc, see the video at and at and https://zalma.com/blog plus more than 5250 posts.
Evidence of Contract with Plaintiff There is No Insurance
In Erica T. Itzhak v. Briarwood Insurance Services Inc., Atlantic Casualty Insurance Co., 2026 NY Slip Op 00616, Appeal No. 5791, Index No. 651193/24, Case No. 2024-06530, Supreme Court of New York, First Department (February 10, 2026) Plaintiff Erica T. Itzhak alleged that her cooperative unit was damaged during a renovation. The complaint did not specify who caused the damage, nor did it clarify the relationships between the plaintiff, Atlantic Casualty Insurance Co., and Briarwood Insurance Services Inc., or provide details regarding which party was ...
UPCODING FRAUDSTER NEEDS TO PRODUCE DOCUMENTS DEMANDED
Post number 5282
Read the full article at https://www.linkedin.com/pulse/insurers-must-proactive-when-victims-fraud-barry-zalma-esq-cfe-07mpc, see the video at and at and at https://zalma.com/blog plus more than 5250 posts.
Insurance Fraud Can Be Stopped by Aggressive Insurers
In Unitedhealthcare Services, Inc., United Healthcare Insurance Co., and UMR, Inc. v. Team Health Holdings, Inc., Ameriteam Services, LLC, and HCFS Health Care Financial Services, Inc., No. 3:21-CV-364-DCLC-DCP, United States District Court, E.D. Tennessee, Knoxville (February 2, 2026) Plaintiffs are health insurance providers and claim administrators who process and pay approximately one million claims daily, relying on automated adjudication and truthful information from providers.
FACTUAL BACKGROUND
Defendants, including Team Health Holdings, Inc., Ameriteam Services, LLC,...
Pro Se Plaintiff Exceeds Logic & Sense
Post number 5281
See the video at and at and at https://zalma.com/blog plus more than 5250 posts.
In Gordon Clark v. Hanover Insurance Group, et al., No. 3:24-CV-348 (SVN), United States District Court, D. Connecticut (January 30, 2026) the USDC dealt with a series of claims brought by a person representing himself resulting from an auto accident.
FACTUAL BACKGROUND
Plaintiff Gordon Clark, proceeding pro se, sued Olga L. Orengo and her insurer, The Hanover Insurance Group, Inc., following a motor vehicle collision in Windsor, Connecticut on July 22, 2023. Clark alleged that, despite Orengo being at fault, Hanover and Orengo refused to accept liability and instead filed an insurance claim asserting Clark was responsible for the accident.
LEGAL ISSUES
Clark’s Second Amended Complaint (SAC) included claims for negligence, negligent infliction of emotional distress, and ...
You Get What You Pay For – Less Coverage Means Lower Premium
Post number 5275
Posted on January 30, 2026 by Barry Zalma
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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
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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...
