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6. Savings
Try to make the underwriting department look good by underpaying claims or making low-ball offers to
improve the loss ratio of the Company. The CEO will be impressed and give you a big raise and stock
options.
5. Surprise
Don’t inquire as to the experience of defense counsel. I mean, we all started somewhere. It’s much
more fun to find out after an adverse result that the attorney for the insured never tried this type of
case before.
4. Bias
Make it appear that the insurance company is looking for a way not to pay the claim. Later you can
convince the jury that it was just a coincidence that everything you highlighted or underlined in the file
was adverse to the insured’s interest.
3. Prejudgment
(see also bias) This one is so good I had to bring it up again. Investigations will go quicker and you will
save time if you first come up with a theory and then do only the investigation necessary to support
your theory (i.e., fire = arson).
2. Reservation of Rights
Do it early and often. More is better. The longer you can string cite provisions of the policy, the stronger
your basis for denial. Damron and Morris agreements should not be feared...so what if the insured
stipulates to a $1 million judgment on a $15,000 policy?!
1. Delay
Everyone knows that if you wear down the insured you pay less on the claim. The jury will not hold
it against you in a bad faith trial. They simply see this as a game. Call the insured at lunchtime. Call
them at home when you know they are at work. Whenever possible, mail letters. This gives you
additional time which will help in accomplishing the objectives set forth in number 6 above.
I hope you enjoyed my attempt to put a little humor into reminding us all what obligations exist in
complying with the duties of good faith and fair dealing. Although rephrased to be funny, all of these
scenarios are taken from actual cases. Needless to say, such conduct can produce significant hurdles
in defending a bad faith case. It can also prove to be detrimental to an adjuster’s health and overall
longevity.
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