Common Claims Handling Mistakes That Cost Insurers Millions

A recent CLM webinar brought together seasoned insurance professionals to discuss the most common mistakes in claims handling and practical ways to avoid them. The session underscored how minor oversights in communication, timing, or local law interpretation can lead to major financial consequences. For claims adjusters, the message was clear: precision, patience, and proactive collaboration are essential for success.

Speakers Rick Roberts, Brian Rubin, Sam Elam, and Cheri Barton highlighted ten recurring error categories, offering real-world examples of how procedural missteps can inflate indemnity payments or jeopardize settlements. One recurring theme was the importance of understanding state-specific regulations. Differences in collateral source rules, for instance, can significantly alter claim valuations and negotiation strategies, making coordination with local counsel a must.

Another key takeaway centered on communication between claims handlers and defense counsel. The panelists noted that many costly outcomes stem from poor coordination or missed updates during critical case developments. Simple, timely conversations can prevent unnecessary settlements and ensure better outcomes for insurers.

Finally, the experts cautioned against rushing to close files prematurely, a habit driven by performance metrics rather than sound judgment. While efficiency remains important, Rubin reminded attendees that early closure can lead to doubled indemnity costs if claims are not fully resolved. The discussion reinforced that quality claims handling depends on deliberate evaluation, ongoing communication, and strategic patience—principles that can help adjusters reduce exposure and enhance claim outcomes across all lines of business.