Documentation—what is it and why is it important?

“Documentation,” as defined by Alan Olson, the founder of the Adjuster Guy, “is the backbone of everything we do in the insurance industry when it comes to handling a claim. Documentation reports—from receiving the claim all the way to the approval of the claim to the payment being issued—everything, every step along the way...the main purpose of the documentation is to provide the insurance carrier with an accurate assessment of damages occured during a loss so that they can properly apply coverage for coverages available, but not apply coverages on specific items that may be excluded from the policy.”

Whether you are just starting out in the field or you have been in the game for decades, it is important that every insurance adjuster understands what documentation is and how important it is for the file.

In order to understand documentation and know its importance, documentation first needs to be defined.

“Documentation,” as defined by Alan Olson, the founder of the Adjuster Guy, “is the backbone of everything we do in the insurance industry when it comes to handling a claim. Documentation reports—from receiving the claim all the way to the approval of the claim to the payment being issued—everything, every step along the way…the main purpose of the documentation is to provide the insurance carrier with an accurate assessment of damages occured during a loss so that they can properly apply coverage for coverages available, but not apply coverages on specific items that may be excluded from the policy.”

What this means is that documentation gives detailed information about everything having to do with the claim. From the moment an adjuster receives the claim, to when they contact the home owner, to when they inspect to house, to when they write the claim, to when they submit it back to the carrier, everything that happens is put into the file on record.

Olson said, “I would say the biggest thing, when it comes to saying somebody does a good job documenting their file, is keeping up with file notes. The claim files are monitored daily by managers and adjusters that work for the firms. If they look into your claim file notes and can’t figure out what’s going on with your claim, you don’t have good documentation. 

“Every note that you put in claim file notes,” Olson continued, “should leave an expectation of when the next note is going to be placed in there. So, if you schedule an inspection day for five days out, you’re going to put a note in that says, ‘I’m inspecting the property on this day at this time.’ And if that day goes by and no more notes are in the file, they don’t know what’s going on. 

“That’s when you go back in the file and say ‘inspected the claim today, found this damage, expect to complete the file and upload it by this day.’ Then they know what’s going on. 

Olson finished by saying, “So good documentation doesn’t just mean I took good photos, and I wrote a good general loss report; good documentation means from the day I had the claim, nobody was guessing at where I was at with that claim. I went and put file notes at the right times, I made sure anybody reviewing the file knew what the status of the claim was, what the next expectation of the claim was and when it would be for the claim and when I thought I was going to get it uploaded.”

In addition to reporting what is going on with the claim, documentation is important because it provides everyone involved protection.

Olson said, “It’s the protection for the adjuster, it’s the protection for the reviewer, its protection for the insurance company, it’s protection for the insured; because, if you are properly documenting a file then everyone knows what’s going on all the way through and everybody knows where a mistake was made if a mistake was made when handling a file.”

Documentation lets everyone involved with the claim know what’s going on, what’s damaged, what’s not damaged, what should be covered, what’s not covered, how it was interacting with the insured, when a certain step was planned and accomplished, and what actions were taken. 

This may sound like a lot; but generally, when an adjuster is documenting, they want to be as clear and precise as possible.

Olson said, “Good documentation can be simple and still be good documentation. Adjusters will have to learn overtime what good documentation in a file is. That’s just something you learn from experience. But good documentation—if you can complete a file and send it to your reviewer, and they can clearly identify what you are accounting for—what is damaged and what’s not damaged—and you have photo documented it and written a narrative to explain everything out in a clear manner, that’s good documentation. It may be 10 photos and six sentences in a paragraph—that’s probably going to be a really small loss—but that’s how simple it can be.”

Overall, when an adjuster is writing documentation for a claim, they want to be factual, precise, to the point, and informative. This helps the people reviewing the claim to not only know what’s going on with the claim—which saves everyone time—but it also protects everyone involved with the claim in that moment and later down the road.

“You’re documenting it for the carrier now,” Olson said, “so that they’re not overlapping in coverage from a prior claim. You’re preparing the file so that the next guy that comes along on the next claim has good information about what happened before you got there as well

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