City stupidities

I worked for Metropolitan Toronto and the City of Toronto from 1976 to 2001.

The City used to have its own claims adjusters, and one person I knew would visit people who had complaints.  She was authorised to pay up to $3,000 in full settlement of such claims.

Obviously the City decided to save on expenses, and contracted the work out, possibly with a promise of a ‘piece of the action’ to the contractor as a bonus if overall costs could be lowered.

On one occasion, I developed the opinion that the City had ordered our benefits insurance carrier to cut costs by denying claims and making us fight to get what we were supposed to receive under the collective agreement.  It can take up to five years to obtain an arbitration award…

The catch here is that the benefits carriers are paid the dollar amount of the claims they honour, plus a percentage for expenses and profit.  Obviously, they were working against their best interests to hold out on paying claims, therefore I think it likely that they were being paid a substantial percentage of the amount by which the City’s benefits costs were reduced, as both recompense and incentive.

That puts the City at the top of the ‘unethical’ list, as I see it.

For what it’s worth, when I started with Metro Treasury, we had several audit clerks plus a supervising auditor attached to the Accounting Division.  If we tried to pay something we shouldn’t have been paying, or that the auditors simply thought was ‘inappropriate’, we were hauled on the carpet.  I was actually summoned to appear before the Metropolitan Auditor on one occasion over something his staff had flagged that way, and I got a big blast.

Since then, standards seem to have fallen by the wayside, and the taxpayers are being badly-served by these hare-brained efforts to save money.

I do believe that some services are best performed by people directly employed by those who pay their wages, and these are legitimate examples.

One thing to remember is that the City keeps track of its trees, (or at least used to, if that hasn’t been contracted out as well), particularly as to their height and their closeness to private property.  If you phone the City to say that their tree fell on your fence and damaged it, you are also telling the City that you are encroaching on their land, and rather than getting money, you may find yourself being required to enter into a lease with the City and to pay rent, or to move your fence back onto your own property.

Other than that, the more the years go by, the worse things seem to get.

Jeff Goodall.

Adjusters Forgetting Ethics.

Toronto Sun
Alan Shanoff: Nov. 5th, 2011

“The Adjuster shall so act as to promote public confidence in insurance companies through fair and conscientious dealing, and shall refrain from any fraud, deceit, misrepresentation, dishonest non-disclosure, undue influence or other mischievous practice.” — The Code of Ethics of the Ontario Insurance Adjusters Association.

Do you think insurance adjusters hired by the City of Toronto to handle property damage claims submitted by residents read their own code of ethics?

You’d be hard pressed to believe so after reading the city Ombudsman’s report describing what can only be seen as a systemic abuse of claimants.

Claims are routinely denied, with adjusters advising claimants investigations have been completed, when no investigation has been launched.

Files are closed without any communication, while residents wait for answers.

Do you think car insurance adjusters are better?

Consider this recent Ontario Superior Court of Justice decision in a lawsuit against Echelon General Insurance.

Edith Whorpole of Pefferlaw died in a horrible accident on Oct. 3, 2007.

Her brother, acting for the estate, submitted a claim for the loss of the vehicle.

He placed the value at $5,751 while the adjuster pegged it at $4,474.

The brother’s evidence was the adjuster said the loss would be paid, it was just a matter of “paperwork” and there was “no need to sue”.

The brother submitted a Proof of Loss in May and September of 2008.

With no response to the first and the adjuster denying receipt of the second, a third Proof of Loss was submitted Oct. 3, 2008.

But on Oct. 9 the adjuster sent a letter denying the claim, stating the one-year period to sue had expired.

If you think that bit of “gotcha” was bad, the adjuster, without notice, arranged for the smashed vehicle — still containing his sister’s blood — to be dumped on the brother’s driveway, blocking the entrance to the house. I can only imagine the distress that would have caused.

This was too much to take and the brother sued in October 2009, not just for the value of the car, but for punitive damages for breach of the duty of good faith and fair dealing.

Instead of a modest claim, now the insurance company faced a much larger suit along with attendant legal fees.

The insurer’s lawyer attacked the lawsuit, claiming it was brought too late, the one-year limitation period having expired.

Justice T. A. Heeney would have none of that argument. He dismissed the motion earlier this year, ruling the action should proceed to a trial.

Now consider another recent case where Ontario Superior Court Justice Wendy L. MacPherson tossed out a low ball settlement between an adjuster and an injured motorcyclist.

This on the basis an ING adjuster abused his position of power to enter into an unconscionable settlement.

These are but two cases. The Toronto Ombudsman’s review covered 12,449 claims, so it’s pretty clear adjusters need some schooling on their own code of ethics.

At the same time, I’d suggest adjusters invest in new fax machines and get more organized.

It’s amazing how often faxes appear to get lost and documents misplaced at adjusters’ offices, thereby delaying claims.

It’s also amazing how frequently adjusters refuse benefits or payments on the basis the item requested is “not considered reasonable and necessary.”

Of course the reason the item isn’t considered reasonable and necessary is rarely disclosed, so perhaps adjusters also need a remedial course in communication.

After all, as the Toronto Ombudsman informed us, city adjusters appear reluctant to advise claimants when their files have been closed, thereby leaving claimants twisting.

Look, we know there are good adjusters and not all are of the “deny and delay” school of thought, but clearly this is one industry in need of a course in remedial ethics.

See original here.