Laws Should Allow Policyholders to See the Insurance Claims File 

Transparency is fundamental to fostering honesty in any industry, particularly in insurance, where trust is paramount. Advocating for fairer claims treatment raises a crucial question: why aren’t insurance companies required to disclose their claims files to their policyholders? If insurance adjusters are conducting their duties with integrity and in good faith, the sharing of these records should be standard practice. Such transparency would not only bolster trust between insurers and policyholders but also promote accountability. It would enable policyholders to have a clearer understanding of the claims process, strengthening the relationship and ensuring a more equitable and transparent claims resolution.

I suggest that California Insurance Code § 2071 is a good example of a law that should become commonplace:

The insurer shall notify every claimant that they may obtain, upon request, copies of claim-related documents. For purposes of this section, “claim-related documents” means all documents that relate to the evaluation of damages, including, but not limited to, repair and replacement estimates and bids, appraisals, scopes of loss, drawings, plans, reports, third-party findings on the amount of loss, covered damages, and cost of repairs, and all other valuation, measurement, and loss adjustment calculations of the amount of loss, covered damage, and cost of repairs. However, attorney work product and attorney-client privileged documents, and documents that indicate fraud by the insured or that contain medically privileged information, are excluded from the documents an insurer is required to provide pursuant to this section to a claimant. Within 15 calendar days after receiving a request from an insured for claim-related documents, the insurer shall provide the insured with copies of all claim-related documents, except those excluded by this section. Nothing in this section shall be construed to affect existing litigation discovery rights.

Insurance company claims departments should embrace laws like this. In The Rebranding of Insurance Claims: How Insurers are Modernising a Once Antiquated Process, it was noted: 

…Potter said insurance organisations are actively working on improving their claims processes and embedding more empathy throughout the claims lifecycle. They are investing in modernising their technology infrastructure, adopting automation and artificial intelligence to streamline workflows, and implementing customer-centric digital platforms that improve transparency and communication – driving faster, more personalised claims experiences.

The law in question was a key topic in a panel discussion I participated in at the California Association of Public Insurance Adjusters (CAPIA) annual meeting in Marina Del Rey. This raises an important consideration: If insurers are mandated to adhere to this requirement in California, shouldn’t the same standard be applied across all states? The adage ‘honesty is the best policy’ underscores the value of transparency in promoting integrity and good faith practices within the insurance industry. Establishing uniformity in these regulations could enhance the overall trustworthiness and fairness in the sector nationwide. 

Thought For The Day