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Last Post 12/29/2013 8:56 PM by  CatAdjusterX
What to do when the insured is deceased or divorced
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Leland
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02/09/2013 12:33 PM

    I think death and divorce are common issues that rarely get covered in training. Adjusters learn what to do by trial and error, or if they are lucky, a knowledgeable supervisor tells them what to do.

     Scenario #1.:

    The adjuster is handling a claim for Mr. John Smith and speaking with  a Mr. John Smith, who he presumes to be the insured. The adjuster gets a call from Sally Smith, who just returned from a deployment in Iraq. She says the house is hers, because she inherited it from her dad, the named insured, who died last year. The Mr. Smith the adjuster is talking to is her half brother. He has apparently already cashed the advance check and started repairs.

    #2

    The insured calls the phone number on the policy and speaks to Mr. Jones to set up an inspection appointment for the fire damaged three bedroom home. Mr. Jones submits estimates from contractors. Three days later Mrs. Jones calls, pointing out that she is the only named insured, and she is divorced from Mr. Jones.

    Later that same day, the adjuster speaks to Mr. Jones who indicates that the divorce is not yet finalized and that the damaged personal property is owned by both him and his estranged wife but located at his storage facility available for inspection. Furthermore he has custody of the two young daughters who were living in the house at the time of the fire, and are/were members of Mrs. Jones household. Mr. Jones would like to be paid ALE for the three bedroom house he is renting. He insists that he is an insured because he is still married to Mrs. Jones and also insists he has an insurable interest because every mortgage payment and premium payment has come from his sole checking account. He says the divorce court judge will award him 1/2 of the house within 10 days.

    Mrs. Jones calls later and explains that she also wants ALE money for the three bedroom house she is renting. She needs three bedrooms for the girls when they come over on the weekends. Mrs. Jones gives a mailing address for any further payments.

     

    How would you handle these scenarios? I'm not 100% sure myself, I just wanted to learn more and see how others have handled similar cases.

    Tags: On The Job
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    iamscott
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    Posts:5


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    02/10/2013 1:02 AM
    I would get your firm management involved and provide to them this same information. Also contact their agent and give them a heads up.
    Just get someone else above you to agree on how to handle the situations.
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    AcceleratedAdjuster
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    Posts:165


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    02/13/2013 9:51 AM

    1. Perform a property record search to determine who owns the property. If the scenario is accurate, say a silent thanks that the half brother has used the advance check to start repairs instead of cashing it and taking a nice little vacation, and then find out why a check was disbursed to a party that was not the insured or the beneficiary. Ensure that safeguards are put in place to prevent the issue from occurring again. Work with the beneficiary to resolve the claim, and hope that you do not have to absorb the value of the first payment that was disbursed, should the beneficiary become difficult to work with.


    2. With respect to ALE, I would say it would only apply to those who actually incurred ALE. It does not look like Mr. Jones incurred any additional expenses as a direct result of the loss. If Mrs. Jones incurred the additional expense of renting another dwelling, there you go.

    With regards to the actual damage to the risk and personal property, if the divorce is not finalized at the time of loss, it does not apply. That said, it would be relatively easy to handle. Take a look at the property deed and the policy info and determine who has an insurable interest in the risk. Make the settlement check out to the owners of the risk at the time of loss (most likely Mr. & Mrs Jones and the mortgagee)

    www.acceleratedadjusting.com www.acceleratedadjustingisrael.com
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    Leland
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    Posts:741


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    02/14/2013 11:44 AM
    #1 we need to read the policy. #2 we need to get a death certificate, that should be routine on any deceased insured. I have obtained death certificates many times, insurance carriers expect that. #3, the payments should never be made payable to a beneficiary unless there is a court order to do so. Payments should be made to "the estate of Mr. insured" or "Mr. Insured, deceased". The check should be given to the executor of the estate. An adjuster should avoid acting as a settlor of the estate. That could be very dangerous.
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    AcceleratedAdjuster
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    02/14/2013 4:30 PM
    Posted By Leland on 14 Feb 2013 11:44 AM
    #1 we need to read the policy. #2 we need to get a death certificate, that should be routine on any deceased insured. I have obtained death certificates many times, insurance carriers expect that. #3, the payments should never be made payable to a beneficiary unless there is a court order to do so. Payments should be made to "the estate of Mr. insured" or "Mr. Insured, deceased". The check should be given to the executor of the estate. An adjuster should avoid acting as a settlor of the estate. That could be very dangerous.

    Yes. I should have said "make sure the insured is actually dead". With regards to paying the estate rather than the beneficiary, well, while I can prattle all day about how that is how we do it in practice, but I sure blew it on paper in my response to you :)

    www.acceleratedadjusting.com www.acceleratedadjustingisrael.com
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    ChuckDeaton
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    Posts:1110


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    02/15/2013 5:16 AM
    In my world you guys are getting the cart before the horse. First things first, write a narrative report and suggest to the company that the insured may be deceased. Generally I attempt to find an obituary that can be included with my report. Summarize the obituary and include a copy as an enclosure. Ask what documents/statements need to be secured to demonstrate the instant situation.

    Once the documents requested by the company are secured and provided the company will make a decision as to the proper form as it relates to multiple insureds, mortgagees and insurable interests and how and where the check/draft is to be delivered.

    It may be necessary to deliver the check/draft into the hands of a court for handling and distribution.



    "Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
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    linhoch
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    02/27/2013 2:37 PM
    Filing an interpleader is more common in liability claims, but this is a good example of where we could use it in first party claims.
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    Atfulldraw
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    Posts:88


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    12/29/2013 2:54 AM

    "summarize the obituary" = Mr. Smith is dead.


    Rod
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    CatAdjusterX
    Veteran Member
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    Posts:964


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    12/29/2013 8:56 PM
    Posted By Atfulldraw on 12/29/2013 2:54 AM

    "summarize the obituary" = Mr. Smith is dead.

    ...........................................................................

    That's why he makes the BIG bucks...........





    "A good leader leads..... ..... but a great leader is followed !!" CatAdjusterX@gmail.com
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