Episode #85: Negligence Is A Mistake; Bad Faith Is A Pattern

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Want a practical blueprint to avoid bad faith and close cleaner files? We dig into the real-world habits that separate defensible claims work from patterns that draw regulator heat and lawsuits. Starting with a crisp definition—negligence is a mistake; bad faith is a repeated choice—we map how state rules, NAIC Model Acts, and administrative codes shape your everyday decisions on property, auto, liability, and workers’ compensation files.

We share the seven claims handling standards that keep you on track: prompt preliminary handling, documented procedures and training, tailored investigations, plain-English communication, visible momentum, rigorous analysis, and clear decisions. You’ll hear why Model Act 902 matters for property and casualty, how anti‑steering rules interact with preferred vendors and OEM parts, and where agents and underwriters can trip administrative rules that later fuel bad faith allegations. We compare states that adopt NAIC models with outliers like Oklahoma, where statute and DOI codes demand files be detailed enough to reconstruct events and reasoning—not just pasted emails, but the policy citations and logic behind each move.

Expect hard-nosed guidance on management oversight that actually shows up in the file, not retroactive notes. We talk through coverage-versus-liability conversations in simple terms, when to pick up the phone before you send a formal letter, and how to use AI cautiously for routine updates without outsourcing judgment. When a scope dispute pops up—say, painting versus hand staining—we show how to tie decisions to policy language and reasonableness, and when to bring in subject matter experts early to avoid guessing. The bottom line: you have the right to be wrong, but only if your documentation proves you acted honestly, timely, and based on sound information.

If you’re an adjuster, manager, agent, or claims leader, this is a clear, usable playbook for unfair claims settlement practices, anti‑steering compliance, documentation standards, and training culture that stands up in court. Subscribe, share with your team, and leave a review with the one habit you’ll change in your next file.

For more insights, you might consider a career in liability adjusting or if you're searching for reliable adjusting services, visit Auten Claims Management.

To explore more about Chantal Roberts and her contributions to the industry, visit CMR Consulting.

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