I had the pleasure of talking with insurance policy legend Bill Wilson about the principles that he has shared over his 30 plus year career of assisting people with resolving insurance coverage and claims disputes. Bill’s book, When Words Collide, should be on the shelf of any professional who works in the insurance industry. Mr. Wilson is famous for his admonishment to “RTFP”, which, in terms safe for work, stands for “Read The FULL Policy.” This simple statement is the starting place for any coverage or claims dispute; read the full policy and allow it to speak to the circumstances of the claim.
As Bill notes, there are areas of ambiguity in every policy potentially leading to claims disputes and/or denials. While many who have had the misfortune of working through a disputed claim have a less than savory view of the process, Bill outlines
Four Basic Reasons for Insurance Claims Disputes:
1. They’re not covered (or there is no legal liability for the loss);
2. There is a legitimate difference of opinion on coverage;
3. One party is committing material misrepresentation or fraud; or
4. Cranial inversion (medically, cranitis rectal inversio).
Parties involved in a claim often believe that reason number four always applies to “the other side”, but Bill has dedicated his efforts to developing a balanced approach to resolving disputes. While policy ignorance is a significant contributing factor, Bill states, “Most coverage disputes likely arise from legitimate differences of opinion about the intent of policy language or the proper way to interpret it.”
Being Resourceful During Insurance Claims Disputes
Those involved in an insurance claim intend to be helpful during the process; whether they are the agent who sold the policy, the adjuster interpreting the claims scenario, the contractor assisting with the composition of a scope of work, or an insured requesting that their policy functions in their time of need. To bring order to the process, Mr. Wilson outlines a four-step procedure for resolving a claims coverage dispute:
Step 0: Heading Off Denials After the Claim
Step 1: Read the Policy (Again)
Step 2: Interpret the Policy
Step 3: Research the Interpretation
Step 4: Plead Your Case
A claims denial should be received in writing, “That clearly and properly explains the basis for the denial and acting on it promptly.” Insurance agents, as all sales and service persons, should RTFP so as to know what they are selling. If the insurance industry wants the public to view insurance sales as more than a commodity, then those selling must know their products and place them properly. For this same reason, those who interpret the coverage also must know the policy and execute it accurately.
Understanding the Bigger Picture in Claims Disputes
During our podcast discussion, Bill shared an example from his own property damage claim experience where he thought he was making a reasonable concession with regards to a proposed scope of work for his intricate front door assembly. Bill clarified that it is important for homeowners and adjusters to receive professional input from qualified contractors as it relates to their area of expertise; the structure. As an insured experiencing a property claim, Mr. Wilson soon discovered that he would have been better off following the structural assessment of his contractor.
Our co-host in that conversation, David Princeton of Advocate Claim Service, wisely admonishes contractors, or any professional, to learn to effectively communicate their “because” when outlining their recommendations to the insured and the carrier. When advocating for your perspective, explain why you believe your course of action is correct and outline the implications, as you see them, of not following that scope (the because). While Bill’s educational presentations to the insurance industry drew crowds 20 years ago with titles such as How to Battle an Adjuster…and Win Every Time, the nature of his life’s work has been to help parties to a claim reach reasonable solutions. He advocates for, “A structured approach to insurance policy interpretation, claims negotiation, and dispute resolution, focusing on policy provisions that are often the source of conflict or litigation.”
Be Intentional and Develop your Claims Disputes Abilities
For three decades, understanding the policy and properly interpreting the policy have been the career passion of author and educator Bill Wilson. He is the author of the acclaimed industry resource When Words Collide: Resolving Insurance Coverage and Claims Disputes, published in 2018 by The Insurance Nerds. For those who are intentional about developing their technical and practical proficiency in the insurance industry, let RTFP be your call to action. This admonition includes knowing what you are selling, being clear with your communications, and being reasonable with your interpretations.
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