Zalma on Insurance
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Insurance Claims professional presents articles and videos on insurance, insurance Claims and insurance law for insurance Claims adjusters, insurance professionals and insurance lawyers who wish to improve their skills and knowledge. Presented by an internationally recognized expert and author.
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July 09, 2024

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.

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Videos
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14 hours ago
It’s Not Nice to Lie to Your Workers’ Compensation Insurer

See the full video at https://lnkd.in/gB5EKA9t and at https://lnkd.in/gBpMe7V2, and at https://zalma.com/blog plus more than 5100 posts.

Workers’ Compensation Insurer Sues to Collect Premiums Avoided by Fraud
It’s Fraud to Lie on Application for Insurance
Post 5121

In The Commissioners Of The State Insurance Fund v. Capcon Construction Industries Corp., Capcon Construction Supply Corp., Jab Masonry Corp., Agra Masonry Inc., Agra Industries Usa Corp, A&A Masonry Corp., Alexander Shvartsberg, Darren Caputo, Maryann Furman, 2025 NY Slip Op 32359(U), Index No. 452680/2024, Motion Seq. No. 002, Supreme Court, New York County (July 2, 2025) the court dealt with a fraudulent application for workers’ compensation insurance.
BACKGROUND

On March 3, 2015, A&A Masonry Corp. applied for workers’ compensation insurance coverage from the New York State Insurance Fund (SIF).
On January 15, 2016, Agra Masonry Inc. was incorporated with Maryann Furman as the sole shareholder and President.
On January 4, 2018, SIF canceled ...

00:07:27
July 21, 2025
False Documentation to Obtain a Loan is a Crime

Arrest for False Impersonation Protected Property Owners from Losing Insurance

See the full video at https://lnkd.in/gYYWmkbQ and at https://lnkd.in/gEe2Wc86. and at https://zalma.com/blog plus more than 5100 posts.

In United States Of America v. Christopher J. Gallo and Mehmet Ali Elmas, No. 2:24-cr-00712 (BRM), USDC, D. New Jersey (July 16, 2025) Gallo and Elmas each filed Motions to Dismiss Count Eighteen which charges the CoDefendants with Aggravated Identity Theft.

BACKGROUND

Co-Defendants were charged in a criminal complaint (the “Complaint”) with conspiracy to commit bank fraud. Gallo, as a senior loan officer originated more than $1.4 billion in loans for the Financial Institution.

A grand jury returned an eighteen-count indictment charging Co-Defendants with Conspiracy to Commit Bank Fraud, False Statement to a Financial Institution and Aggravated Identity Theft.

LEGAL PROCEEDINGS

Motions to Dismiss

The court found that the identity theft was central to the fraudulent scheme, as the...

00:08:14
July 21, 2025
False Documentation to Obtain a Loan is a Crime

Arrest for False Impersonation Protected Property Owners from Losing Insurance

See the full video at https://lnkd.in/gYYWmkbQ and at https://lnkd.in/gEe2Wc86. and at https://zalma.com/blog plus more than 5100 posts.

In United States Of America v. Christopher J. Gallo and Mehmet Ali Elmas, No. 2:24-cr-00712 (BRM), USDC, D. New Jersey (July 16, 2025) Gallo and Elmas each filed Motions to Dismiss Count Eighteen which charges the CoDefendants with Aggravated Identity Theft.

BACKGROUND

Co-Defendants were charged in a criminal complaint (the “Complaint”) with conspiracy to commit bank fraud. Gallo, as a senior loan officer originated more than $1.4 billion in loans for the Financial Institution.

A grand jury returned an eighteen-count indictment charging Co-Defendants with Conspiracy to Commit Bank Fraud, False Statement to a Financial Institution and Aggravated Identity Theft.

LEGAL PROCEEDINGS

Motions to Dismiss

The court found that the identity theft was central to the fraudulent scheme, as the...

00:08:14
July 16, 2025
There is no Tort of Negligent Claims handling in Alaska

Rulings on Motions Reduced the Issues to be Presented at Trial

Read the full article at https://lnkd.in/gwJKZnCP and at https://zalma/blog plus more than 5100 posts.

CASE OVERVIEW

In Richard Bernier v. State Farm Mutual Automobile Insurance Company, No. 4:24-cv-00002-GMS, USDC, D. Alaska (May 28, 2025) Richard Bernier made claim under the underinsured motorist (UIM) coverage provided in his State Farm policy, was not satisfied with State Farm's offer and sued. Both parties tried to win by filing motions for summary judgment.

FACTS

Bernier was involved in an auto accident on November 18, 2020, and sought the maximum available UIM coverage under his policy, which was $50,000. State Farm initially offered him $31,342.36, which did not include prejudgment interest or attorney fees.

Prior to trial Bernier had three remaining claims against State Farm:

1. negligent and reckless claims handling;
2. violation of covenant of good faith and fair dealing; and
3. award of punitive damages.

Both Bernier and State Farm dispositive motions before ...

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May 15, 2025
Zalma's Insurance Fraud Letter - May 15, 2025

ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional

See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.

Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th 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/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:

Health Care Fraud Trial Results in Murder for Hire of Witness

To Avoid Conviction for Insurance Fraud Defendants Murder Witness

In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...

May 15, 2025
CGL Is Not a Medical Malpractice Policy

Professional Health Care Services Exclusion Effective

Post 5073

See the full video at https://lnkd.in/g-f6Tjm5 and at https://lnkd.in/gx3agRzi, and at https://zalma.com/blog plus more than 5050 posts.

This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.

In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:

Insurance Coverage Dispute:

Travelers issued a Commercial General Liability ...

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