Perspective | The Ugly Truth About Managing Claims

By: | April 10, 2019

Roger Crombie is a United Kingdom-based columnist for Risk & Insurance®. He can be reached at [email protected]

I’ve written for years about insurance claims departments and the men and women who work there. A high percentage of them are lawyers. I never truly understood their burden, however, until my first lawsuit arose.

The facts are not in contention. I worked for a fellow in Bermuda, in 2013 and 2014. He wouldn’t pay, claiming his records were in disarray. I had to pay income tax on the unpaid invoices. I chased the debt until about 2017, then decided to let it go.

A friend we’ll call Lawyer A said he’d sue the guy for me but didn’t get around to it for months. He passed me on to Lawyer B, a sole practitioner who then joined a law firm. My case was lost in transit for more months.

The matter was finally heard in Bermuda Magistrates’ Court last fall. I was Plaintiff. I’d only ever heard of one other: The Eagles’ Glenn Frey once dedicated a song onstage to “my ex-wife, Plaintiff.”

The first court date proved impossible, because Defendant was on vacation. Spending my money, I might add.

At this point, I’d done the work, paid the tax, incurred the legal fees and was nowhere near to receiving what was owed. Defendant, by contrast, had profited from my work, taken a vacation with my money and not once bothered to appear in court. Who exactly was winning?

Bad luck attended the second date. A fellow whose prosecution was being heard that day pulled the fire alarm to clear the building before his matter came up. Justice was a little swifter for him: He received a six-month jail sentence the following week.

Defendant didn’t turn up for the third date, and I briefly thought I’d won. No such luck; the Court gave him an extra three weeks to file a defense.

He didn’t. The Court then awarded me the full amount, plus costs and interest. Yay.

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How would I get paid? We’d have to chase the Defendant, at $500 a letter, B said. Had I not prevailed? Was justice not mine? Not yet, apparently.

At this point, I’d done the work, paid the tax, incurred the legal fees and was nowhere near to receiving what was owed. Defendant, by contrast, had profited from my work, taken a vacation with my money and not once bothered to appear in court. Who exactly was winning?

A couple of months later, Defendant emailed to suggest we save lawyers’ fees by settling. No thanks, I replied, attaching a copy of the judgment. The following week, Defendant emailed to say that he’d paid “the monies claimed” into an account I once had.

Years earlier when I lived in Bermuda, a visiting insurance mogul told me that, having visited the island, he had the feeling he would never actually see his money again. I now have that feeling. I await a bank statement that will arrive this summer that will tell me whether or not I have been paid, six years late.

The whole experience upset my equilibrium. It was like Alcoholics Anonymous: 12 difficult steps.

Imagine that nightmare multiplied a million-fold in importance and dollars.

Imagine that it’s your job to deal with a dozen or more such cases simultaneously.

Now you know what it must be like to work in an insurance claims department. Good luck. &

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The R&I Editorial Team can be reached at [email protected]