Was a claim settled by the insurance company without your approval?
Maybe you thought the claim was not legitimate, or the worker was exaggerating the disability, and were surprised the adjuster settled the claim “out from under you.” Maybe you have a one million dollar deductible, so it is really your company’s money. You do not understand it.
I receive at least one phone call each week asking, “HOW can they DO that?” I have talked to many companies who are so upset with their insurance company or TPA for settling a claim “without their permission,” they are ready to replace the insurance company – a very expensive and time-consuming process.
Question: How CAN a claim be settled “out from under you”?
Answer: They can “do that” because you failed to negotiate and customize your Account Handling Instructions. You failed to tell the claims administrator how you wanted your claims handled. You failed to “take control” of how you wanted your claims managed! Unless you requested “settlement authority” (different from settlement consultation) and it is included in writing in your account instructions, it is their responsibility to settle claims when they believe it is appropriate.
But, it is not too late – you can start taking control TODAY! Ask yourself, whose fault is it really when the insurance company is not living up to your expectations, and you have failed to communicate your expectations? That’s right – it might be time to look in the mirror… J The amount of settlement authority you can negotiate with the insurance company will depend on the type of insurance program you have. For example, with large deductilbe programs you will have a great deal more authority than if you are in a guaranteed cost program. Discuss this with your broker.
Certainly, there ARE instances when an insurance company or TPA fails to meet expectations, but at least 50% of the time, the insured (that is you) has failed to set expectations correctly.




