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By CYRIL TUOHY, managing editor of Risk & Insurance®

Complaints about insurance claims processing are beginning to sound like a broken record. The refrain is by now starting to get tiresome. It goes something like this:

Next up: A handsome blow-dried TV correspondent delivers the five-second stand-ups in front of a demolished casino bemoaning the fact the insurance goliaths are stiffing policyholders.

Do yourselves a favor and turn off the tube.

Believe me, claims are getting paid, and they are getting paid quickly and efficiently. Every day, carriers cut checks for claims--from mundane general liability claims to business-interruption claims to complicated workers' comp claims.

You just don't hear about them. Perhaps reporters ought to pay more attention to statistics. Breaking news, I know. I was once a reporter, and I know plenty of former colleagues who transposed numerators with denominators.

Within a year of Hurricane Katrina in August 2005, nearly 95 percent of homeowners claims--993,000 claims totaling $15.5 billion--had been settled in Louisiana and Mississippi, according to the Insurance Information Institute. On the auto side, 99 percent of 305,000 claims related to vehicles damaged by the hurricane--a number totaling $2 billion--had been settled in both states.

Yet the one story that sticks out in many of our minds is how State Farm denied former Sen. Trent Lott his claim. For sure, the Lott denial was bad publicity for insurers, but it just goes to prove carriers are more interested in looking at the numbers then they are in burnishing their image.

And the numbers jury finds overwhelmingly in favor of insurers, which is to say that taken as a whole, carriers pay claims, pay them quickly and pay them according to the policyholder contract.

Granted, expensive claims filed by big businesses often take longer to settle. Some of the casinos around the Gulf Coast, for example, got into disputes with carriers over how big their losses are.

That happens all the time, and given the millions of dollars at stake with large property losses, it's understandable. These claims are going to take time to resolve.

So the next time you have a run-in with your carrier or third-party claims administrator, think back to all the claims processing that has gone right, instead of harping on claims that have turned into headaches.

(Read Senior Editor Matthew Brodsky's Counterpoint on claims.)

June 1, 2010

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