Preventing Insurance Fraud - What is an Insurance Adjuster?

Most of us know what an insurance company is. But just what is an insurance adjuster?

Sometimes it’s not clear who adjusters are and how they’re trained for the job. (After all, how many colleges offer “insurance adjusting” as a major?)

To get some answers, we went behind the scenes with Chad Smith, a property specialist at Erie Insurance who handles large losses. Read on to learn more about him and all the important ways he helps Customers in their time of need. (And feel free to check out our short video above to learn even more!)

In your own words, what is an insurance adjuster?

To me, an insurance adjuster is someone who has a great deal of responsibility and accountability. An adjuster owes that not just to the company he or she represents, but to the customers who’ve experienced a loss.

At Erie Insurance, adjusters are the ambassadors of the company. People don’t really see how an insurance company works until they have a loss, and we represent that.

What kind of background do you need to become an adjuster?

More often than not, you need to have a college degree. I have a business degree, but insurance adjusters can pursue other fields as well. I would also recommend adding computer and math classes to your coursework.

How did you become an adjuster?

ERIE hired me as an adjuster shortly after graduating from college. I went through a few months of training that included both classroom and field training. I was tested on information and then spent some time out in the field with seasoned adjusters and appraisers to learn about what they did first hand. Because I work directly for an insurance company, I don’t need a license to be an adjuster. However, the rules vary by state.

What kind of skills do you need as an adjuster?

Being people-oriented is a must. You need to be able to empathize with the Customer by putting yourself in their shoes. Honesty and integrity are essential in establishing trust.

Because of the way the field is evolving, you need to be really comfortable with technology or be willing to learn it. To grow as a professional adjuster, you have to move beyond in-house training and pursue professional insurance designations like the Chartered Property Casualty Underwriter (CPCU) and Associate in Claims (AIC).

What’s a normal day like?

There really is no normal day. And that’s one reason why I love my job!

In order to handle it, you have to structure your days to a certain degree, but also maintain flexibility. I might plan to make calls all morning—but if I get an urgent claim, I need to reorder my day. I’m always busy.

What hours do you work?

I usually start early and end late. Sometimes I work weekends. I enjoy a lot of freedom with this position—and I’m available almost 24/7 because that’s how you provide great service. You can’t be stuck in the traditional nine-to-five, Monday through Friday mindset as an adjuster.

What’s the most memorable claim experience you’ve had?

Over the years, I’ve had many. One that stands out is working during the 2011 tornado catastrophes in North Carolina, Virginia and Tennessee. ERIE was the first insurance company on the scene. There was a lot of damage, but I was able to respond quickly and help Customers affected by the tornadoes. The fast response was made possible by the way ERIE set up its catastrophe team units. Some people I spoke to said neighbors with other carriers hadn’t even heard from their adjusters yet. It was extremely gratifying to help ERIE’s Customers when they really needed it.

What’s the most gratifying part of your job?

Knowing in my heart that I did the best I could for ERIE and for the Customer on every claim that I handle. I remember one claim we had to deny; even still, the Customer sent me a card thanking me for how polite and helpful I’d been during the process. Everyone should receive the same level of service, regardless of the outcome.

Do you have the backing of a company that offers the kind of top-notch service Chad delivers? If not, contact a local Erie Insurance Agent in your community to discuss your options and get a free quote.

Preventing Insurance Fraud - How to Get 4 Overlooked Business Risks Covered

The success of any business depends on hard work and ingenuity. Business insurance helps protect the effort and money you’ve invested in your business is covered in case a disaster strikes. But because businesses are so diverse, there are a variety of optional coverage that you should consider, too. These extras are added to your business insurance policy as endorsements.

Here’s how to help cover four common business risks with endorsements.

1. Data breaches: Any business that has personal or medical information about customers, tenants or employees is at risk for a data breach.

Don’t think it can’t happen to you? A study commissioned by Hartford Steam Boiler and conducted by the Ponemon Institute found that over half of small businesses have experienced a data breach, and many did not inform victims as required by state law. Most states have breach notification laws that not only require a business owner to inform any affected individuals (customers) of a data breach but also specify the manner and period in which the business owner must inform customers.

Two coverages you may want to consider:

• Data Breach Response Expenses: It could cover your expenses to notify affected individuals of a breach per state laws.

• Data Breach Liability Coverage: It could cover damages that you are legally obligated to pay due to fraudulent use of your customers’ non-public personal information that is lost, stolen or accidentally released. It also covers the cost to defend lawsuits seeking damages.

2. Employment liability: These days, hiring, firing and day-to-day employee management can be a risky business. You’d like to think that your employees would never dream of filing a claim or suit against you or your business for discrimination, wrongful termination, harassment or sexual harassment. Unfortunately, it does happen. Responding to claims or suits like these will require time and money.

The Equal Employment Opportunity Commission (EEOC) received 89,385 charges of workplace discrimination during fiscal year 2015, which ended in September. EEOC also secured more than $356.6 million for victims of discrimination in the private sector.

With Employment Practices Liability Coverage, you will not have to face an employment claim on your own. It can help protect you against liability damages and cover defense costs.

3. Professional liability: You’re expected to have technical knowledge or training in a particular area of expertise or perform certain services according to the standards of your profession. If you fail, you could be held responsible for any harm that you caused to another person or business. Professional liability coverage can provide you with protection for claims arising out of negligent business or professional practices.

4. Personal identity theft: As a small business owner, your personal credit may be tied closely to your business. Having your own identity stolen, could jeopardize your credit and affect your business operations.

Last year, fraudsters stole $16 billion from 12.7 million U.S. consumers, according to the 2015 Identity Fraud Study, released by Javelin Strategy & Research. That means that every 2 seconds in 2014 there was a new identity fraud victim.

Personal Identity Recovery coverage can be added to a business insurance policy1 and provide:

• Case management services to assist you in recovering a personal identity by contacting authorities, credit bureaus and businesses to correct the records.

• Reimbursement for necessary and reasonable expenses that you incur because of identity theft, including lost wages, mental health counseling and child and elder care supervision costs.

Talk to an Erie Insurance agent to learn more about the risks that you may face and how to protect your business.

Social Media Helps Solve Insurance Fraud Cases

It’s Monday morning and Jeremy McFadden, a fraud program specialist at Erie Insurance, is surfing Facebook.

Jeremy isn’t reliving memories from the weekend—he’s knee deep in investigative work that saves ERIE and its Customers many thousands of dollars every year.

“Though the vast majority of claims are legitimately submitted by honest people, there is a small portion that requires further review,” says Gene Robertson, director of Special Investigation and Analysis at ERIE. “Social media is absolutely helping us do that.”

Insurance fraud cases

Insurance fraud is a serious crime in which someone knowingly and intentionally sets out to deceive their insurance company. It is different from an innocent misrepresentation in which someone unknowingly presents false information to their insurer. (For instance, a fire destroys an appliance and someone overestimates how much it cost because he lacks a receipt.)

Circumstances surrounding suspected fraud tend to be highly unusual. “There is a big red flag when truly fraudulent activity occurs,” says Gene. Insurance fraud is a crime in every state—and in most cases, it’s a felony.

Insurance fraud cases end up costing Customers

The property and casualty insurance industry estimates that fraud costs between $30 and $60 billion a year. Insurance fraud is the second most expensive white-collar crime after tax evasion—and it costs honest Customers, who eventually foot the bill in the form of higher premiums.

Today, more people are making this connection. “Thanks to successful advertising and public awareness campaigns over the years, the way the public views insurance fraud has really changed,” says Frank Scafidi, director of public affairs at the National Insurance Crime Bureau (NICB), a not-for-profit organization that partners with insurance companies like ERIE and law enforcement agencies to fight insurance fraud.

“People used to brag about getting one over on insurance companies, but there’s now a realization that this causes your friends and family to pay more,” he says.

Piecing it all together

ERIE fights insurance fraud cases on many fronts. There’s old-fashioned detective work like visiting premises, conducting interviews and acting on tips. ERIE also uses sophisticated software and collaborates with the NICB, law enforcement and other insurers.

Fraud investigation is about seeing the whole picture, and social media posts, photos and videos are increasingly a part of that picture. This doesn’t mean all information is free game. ERIE respects Customers’ privacy rights by only looking at publicly available information. That means ERIE investigators will never create fake profiles to “friend” or “follow” a Customer with a suspicious claim.

“Our whole premise at ERIE is about doing the right thing,” says Robertson. “Protecting and respecting our Customers’ privacy is a priority in all we do, including our investigative work.”

Fortunately, such measures usually aren’t needed.

“What we find is that fraudsters often neglect to cover their tracks,” continues Robertson. “Even if their profile is private, they often post to pages of friends and groups whose accounts are public.”

A few recent insurance fraud cases

Just a few instances in which information gleaned from social media played an important role in unraveling insurance fraud cases included:

• The Playground Scam: A claim was filed for a playground that was allegedly damaged beyond repair in a storm. The playground was disposed of, leaving ERIE no way of verifying the claim. A few weeks later, the claimant was selling the same playground on Facebook.

• The Tractor Pull Scam: A claim was filed alleging an engine was damaged when someone put the wrong fuel in it. ERIE later found a YouTube clip and Facebook photos of the claimant participating in a tractor pull in the same truck. ERIE personal auto policies exclude coverage while participating in organized racing, high performance driving, stunting and similar sporting events.

• The Livery Van Scam: Several people simultaneously filed claims to an ERIE personal auto policy. ERIE later discovered a Facebook page advertising the claimant’s van as a public transportation business. ERIE personal auto policies exclude transporting people or goods for hire.

ERIE investigators have also unearthed many online photos and comments implicating claimants of committing workers’ compensation fraud. “I’ve seen claimants who are ‘too hurt to work’ post updates about their marathon training schedules or photos of themselves backpacking through the mountains,” says McFadden.

When ERIE presents someone with solid evidence of fraud, most people will withdraw or stop pursuing a claim. ERIE then turns things over to law enforcement, who will decide how to handle the crime.

You can help ERIE fight fraud

Though social media is playing an increasingly important role in combating fraud, your input still matters.

If you suspect that someone is committing insurance fraud, let ERIE know by calling the toll-free Fraud Hotline at 800-368-6696 or emailing fraud.finders@erieinsurance.com. Together, we can reduce this costly crime.