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May Newsletter 2024

The insurance sector is currently facing a significant upheaval. Major insurance companies are experiencing a mass exodus of experienced staff adjusters, primarily due to recent policy changes, complaints of underpayment, excessive working hours, restrictions on payment software, and diminishing employee benefits. This trend has paved the way for an influx of novice adjusters who are unfamiliar with critical operational software and the fundamental responsibilities of their roles.

Core Issues Leading to Staff Turnover

Experienced adjusters have voiced their frustrations over several issues compromising their working conditions and job satisfaction. Key complaints include the rigorous demands of long hours without commensurate compensation and an increasing reliance on restrictive claim-adjustment software and procedures which limits adjusters' discretion in claim handling. Additionally, there has been a noticeable reduction in employee benefits, making the roles less attractive to skilled professionals. These factors have led to a mass departure of seasoned staff, leaving a significant gap in expertise.

Impact of Inexperienced Adjusters

The vacuum left by seasoned professionals has been hastily filled by less experienced adjusters. These new hires often lack the necessary training on the specific software tools, building codes, and building processes critical to effective claim handling. Their unfamiliarity with the industry standards and practices has led to an increase in errors and inefficiencies, directly affecting the quality of claim service provided to policyholders.

Notably, this has led to a substantial increase in customer complaints regarding the handling of claims.

After a tornado ripped through our peaceful lakeside home in the countryside, the aftermath was devastating. Numerous trees were uprooted, crashing into our house and outbuildings, causing significant structural damage. Despite the clear severity of the destruction, the response from our insurance company was deeply inadequate. Rather than sending a staff adjuster, they dispatched an inexperienced engineer whose estimates for the repair costs fell short by a staggering $200,000.

Communication with our insurer was torturously slow. Weeks, and sometimes months, passed without any response to our persistent calls and emails. It felt like we were forgotten, left to cope with the unsafe conditions of our partially destroyed home. Out of options and desperate for a resolution, Thankfully, we hired a public insurance adjuster and a lawyer to advocate for our rights. The legal battle that ensued to move the claim into appraisal was draining and fraught with bureaucratic red tape.

As the two-year statute of limitations neared, the stress of the situation intensified. Thankfully, the claim was finally settled just weeks before the deadline, but the relief was tinged with frustration. The protracted process took a significant toll on us, both emotionally and financially. This ordeal has left us with a deep sense of vulnerability and a waning trust in the promises made by our insurance provider. I can’t even imagine how we would have settled this claim without outside help.

Rising Customer Complaints in Minnesota

In Minnesota, the situation has become particularly dire. According to Commerce Deputy Commissioner of Insurance, Julia Dreier, "In the past, homeowners’ insurance may have covered all of a policyholder’s costs to replace a roof or siding, but that may have changed.” The number of formal complaints has more than doubled from 569 in 2020 to 1,185 in 2023. Many of these grievances have been about denied claims or exorbitant out- of-pocket costs that were previously covered under homeowners' insurance policies.

Conclusion

The ongoing crisis in the insurance industry, marked by a transition from experienced to inexperienced staff, has raised serious concerns about the reliability and efficiency of claim adjustments. The dissatisfaction among policyholders is growing, as evidenced by the rising number of complaints and the increasingly visible gaps in coverage that were once standard. For the insurance industry to regain trust and ensure quality service, it is crucial to address the underlying issues of workforce management and policyholder engagement. This situation serves as a critical reminder of the importance of experienced personnel in maintaining the integrity and effectiveness of the insurance sector and the value of hiring professionals who legally represent you.

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Richard Farrand
CEO/President
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Previous Editions

June Newsletter 2025
Richard Farrand
June 2025
May Newsletter 2025
Richard Farrand
May 2025
April Newsletter 2025
Khadija Gul
April 2025
March Newsletter 2025
Khadija Gul
March 2025
February Newsletter 2025
Richard Farrand
February 2025
January Newsletter 2025
Richard Farrand
January 2025
December Newsletter 2024
Richard Farrand
December 2024
November Newsletter 2024
Amy Watson
November 2024
October Newsletter 2024
Amy Watson
October 2024
September Newsletter 2024
Richard Farrand
September 2024
August Newsletter 2024
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August 2024
July Newsletter 2024
Richard Farrand
July 2024
June Newsletter 2024
Richard Farrand
June 2024
March Newsletter 2024
March 2024
February Newsletter 2024
February 2024
January Newsletter 2024
United Policy Holders
January 2024
December Newsletter 2023
United Policy Holders
December 2023
November Newsletter 2023
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November 2023

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