The Art of Adjusting® Podcast

Episode #75 - Certificates of Insurance: The Most Misunderstood Document in Insurance

• William Auten & Chantal Roberts • Season 3 • Episode 75

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Certificates of Insurance (COIs) look simple—but behind that one page is a world of fine print, pitfalls, and potential fraud.

In this episode, Chantal and Sandy talk with Scott Margraves, a 33-year insurance veteran and founder of COI’s R Us, about what COIs actually do (and don’t) prove. You’ll hear:

  • Why 9 out of 10 COIs are issued incorrectly
  • How small clerical errors can lead to big problems
  • The difference between a document that verifies coverage and an actual contract
  • Real-world examples of COI confusion, misrepresentation, and fraud

We also say goodbye to Sandy as co-host and welcome Heather Blevins as our next guest host—plus a preview of our upcoming episode on good faith claims handling.

You can reach Scott at COIsRUs.com or 713-416-9000

Want to know what a COI looks like? Here's the link:

https://acords.com/ACORD%20Forms%2025.html


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.

Promotions:

  • Once Upon a Claim: Explore the magical world of claims adjusting through fairy tales. Get your copy now.
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Speaker 1:

I'm Bill Auten of Auten Claims Management.

Speaker 2:

I'm Chantel Roberts of CMR Consulting and welcome to the Art of Adjusting podcast.

Speaker 1:

Today we're going to talk about life as an insurance adjuster from the perspective of property, auto liability or workers' compensation adjusters. Our goal is to bring interesting topics in the world of claims adjusting to people who are working as an adjuster now and to people who are considering a career as a claims adjuster.

Speaker 2:

Hey Sandy, how are you doing?

Speaker 3:

I am good Surviving the heat. It was 113 yesterday, so happy to be inside.

Speaker 2:

Wow, I didn't think California ever got like that. Really hot.

Speaker 3:

We're like an hour out of Palm Springs. So it's yeah, we're, we're at the. The part we don't, we don't think about when we think of California, it's the oppressive heat.

Speaker 2:

Now I know we have a guest today at Scott Margraves. He is in Houston, if I recall correctly. Is that right? So it is also hotter than heck down in Houston. I will just say that categorically, because it's August and it's Houston, am I right, scott?

Speaker 4:

You're absolutely right.

Speaker 2:

I can tell you the forecast for the next month it will be hot and sticky yeah it'll be over 100 and the heat indices, or whatever that word is, is all going to be like over 150.

Speaker 4:

Yes, the heat index is alive and well.

Speaker 2:

Yes, absolutely, but for me in Kansas we had 80 degree weather last week, but unfortunately it's gotten back up to 90s. So, all right, that's your weather forecast for today. Everyone on the Art of Adjusting podcast. So we'll just go ahead and say goodbye and no, we've got, and I keep hitting the wrong button over here.

Speaker 2:

We have, like I said, scott Margraves and I know Scott. I've known him for about five years because he's also an expert witness. I met him through AIMCO. So, adjusters, if you're looking for some expert witnesses, aimco A-A-I-M-C-O is a great place to go get your expert witnesses. But Scott and I have known each other. I would actually call him like the guru of everything about certificates of insurance, which is what we're going to be talking about today, and I love the fact. Thank you so much, scott, for coming on and talking to us about this. You've got about what? 33 years of experience in commercial property and casualty insurance, which makes you what you know like you started when you were two, because you're 35, I think You're the principal consultant and founder of Gulf Coast Risk Management. You operate COIs RS, which I love, a certificate insurance compliance and tracking company, and you actually compare what the contractual obligations of a lease agreement with the COI and all of this kind of fun stuff which I think you're going to explain to us, hopefully. So welcome, welcome, scott.

Speaker 4:

Well, thank you, I'm honored to be on your podcast and hello to all the great adjusters out there.

Speaker 2:

Yes, absolutely.

Speaker 3:

So, scott, let's start with the basics, if you can explain what a certificate insurance is and what it is not.

Speaker 4:

Gladly. Well, as Chantal told you, I'm Scott Margraves and I sold property casualty commercial insurance for 28 years and when I retired I had customers come to me and say, scott, I know you don't sell insurance anymore, but would you please continue to check our certificates of insurance? And five years later, cois are us, we're still checking certificates and we're still rock and rolling along. So that kind of tells you a little bit about background and how I got into this. It is a very niche segment segment and what I found when I got into it is nine out of 10 certificates are issued incorrectly. Now, that's a key stat and I didn't make it up. It Army did a study, a four-year study, of a owner, contractor, insuranceractor, insurance program and without going into it, that's effectively what they came up with is that 9 out of 10, after looking at everybody's, all the subs and everybody else 9 out of 10 are issued incorrectly. Now just a point of clarification. When it comes to well, was it an error? Did he do it intentional? What we refer to that in the industry is called a misrepresentation. So nine out of 10 COIs first issue have misrepresentations. Again, we're operating from a position of utmost good faith. We truly believe. Everybody's trying to do the right thing and mistakes happen, so they're called misrepresentations. It's an all-encompassing term.

Speaker 4:

Cois are us processes, certificates of insurance for landlords and general contractors. So if you're a general contractor, you're a paper contractor and you want to keep up with your subcontractors, you have to comply with, even within your own insurance. To comply with even within your own insurance. There are now warranties and all kinds of nasties in these policies now that say that if you don't get a certificate of insurance, you're out of compliance and you may jeopardize your coverage. And what I have found and what a lot of my competitors well, not competitors, but there's still a risk management strategy of I got one. That's not a risk management strategy For a guy like me. There are services out there that provide this type of tracking, verification of the renewals of the COIs that come in. There is a real need A COI. It's got 100 plus fillable blanks on it, and so there's 100 plus opportunities to make a misrepresentation.

Speaker 2:

So Sandy I kind of went off on a track there Go ahead.

Speaker 2:

No, no, no, it's interesting that you say that and I think I'll put a link if the adjusters have never seen what a certificate of insurance is and I don't think I've ever counted it, but I didn't know that there were 100 spots where we could mess up. But I hear you say so many things and like one of the first or I can't say that I've been teaching, I've been quote facilitating, end quote at CPCU for the CPCU 530 illegal environment. Misrepresentation means fraud. It means fraud. It means you're lying, and maybe we didn't mean to lie, but it means lying.

Speaker 4:

Anyway, besides the point, you know that and you know, I think it's applicable for.

Speaker 2:

COIs yeah.

Speaker 4:

You know, I mean, I know you have more concrete evidence to make that determination, but at this point all I'm looking at is just a misrepresentation. That was probably a clerical error.

Speaker 2:

Right. So when I think of certificates of insurance, I don't think very highly of them because of all of the mistakes. Usually agents are getting like their lowest paid person it's like their first week of the job or whatever to fill out something and they'll just do whatever anybody tells them to. But, most importantly, I kind of think of a certificate of insurance as just like a piece of paper, like it's a snapshot in time, not very important either, because I mean the insured I suppose could just cancel this insurance policy as soon as they give me, like a homeowner, this piece of paper saying that they've got insurance.

Speaker 2:

So anyway, I don't think very highly of them, but, and because there's so many errors, but, but, but, but adjusters, we get them all the time in claims and you specifically mentioned like construction and that's where I've seen them before. You know, like some kind of subcontractor or the general contractor has given me the subcontractor COI or whatever, and I'm like it doesn't say that you're an insured. You know, what should adjusters pay attention to? What should they be specifically looking at when they receive this little piece of paper?

Speaker 4:

Okay, Well, let me define what a COI is and what it is not. Okay, and so what a COI is? It is for information only. It is, as you pointed out, a snapshot in time. A licensed representative of the insurance company is certified that coverage is in place, and that's what a COI is. And that's what a COI is we're going to define, on a industry standard form, whether or it's triggered by a written contract. So the certificate of insurance can provide you, or the certificate holder or the adjuster, with a wealth of information, with a wealth of information. We know a policy was in force at that time, and so it gives you just a timestamp, if you will.

Speaker 4:

Starting point this is a piece of evidence that we can go by, of evidence that we can go by. Now, you know there's different scenarios where a COI would be applicable to an adjuster. So, if you're first party, no, it's probably. If you're adjusting a first party representing the carrier, it's probably not that applicable, okay, but you get, let's just say you're the, you're representing the general contractor, all right, and all you've got is a certificate of insurance from a subcontractor, right, that's a starting point. You've got phone numbers, you've got policy numbers, you've got names, so so, so it can provide you with that type of information.

Speaker 4:

Now let's take it a step further. Let's say you're the landlord, you're the owner-operator of that construction project. Now I'm an additional insurer. Under whose policy? Under the sub, under the GC? Well, the answer is the GC. But you get in, you're going to have to have another adjuster for my interest. That's the landlord or the project owner. So now you've got to represent my interests under his policy. Let's throw in another one. Let's say you're the adjuster for the subcontractor who started this mess.

Speaker 2:

Okay, and this is why I don't do construction claims everyone, just FYI.

Speaker 4:

Yeah, so you can get deep into the forest real quick.

Speaker 4:

And the landlord scenario plays out the same way. You know, there's something happens in the parking lot. Somebody gets run over by the UPS driver. Who was he going to visit Tenant A? Hey, tenant A, I'm the landlord. You got to indemnify me.

Speaker 4:

You can see how certificates of insurance start getting important. Insurance isn't important until it's important. And that's the story of COIs they're not important until they're important. Yeah, so that's what a COI is. It can give you a lot of information. It's a good starting point. What isn't it? It is not a contract. It is not.

Speaker 4:

There's no representation that you're entitled to any rights whatsoever. It is strictly for information purposes only. And I think that's where Chantal has the bad taste for COIs. Yeah, because you just threw out a bunch of garbage and now I can't do anything with it, and you created a bunch of busy work for me that I didn't want to do in the first place. Now that said, okay, let's think about that for just a second. All right, it was a misrepresentation, but now we're getting into. Well, was it intentional or was it just a typo? And so the certificate holder does have recourse? If you represented to me that a policy was in place for this loan that I funded. And it turns out six months later, after the storm, you pocketed the money and misrepresented to me that there was a policy in place. You know again there can be serious repercussions for issuing a COI.

Speaker 4:

So there is a place for it and in the insurance world, for certificates of insurance, it's that check, double check system. So, and which reminds me it's another good speaking of the industry and what's a good use of a COI, well, they're damn hard to fill out and only insurance people should be filling out certificates of insurance. And so when you get a non-insurance person trying to fill out a certificate of insurance, it's chock full of errors. That's a tip off and, trust me, I see fraudulent certificates all the time, more than I particularly like to. You know. Now I get let's talk about agents for just a second. You got an agent, a agent B. You know I have complete confidence when agent A sends me a certificate that it's actually true. But then you got an agent B over here that I trust about as far as I can throw you know. But guess what? Both COIs are going to be accepted. You know they met the criteria, the contractual obligations you got to let them on the job site.

Speaker 2:

Yeah, yeah. What about risk management? Sandy? Do y'all deal with it a lot, Because Sandy has been an adjuster and she's also I think you're in risk management right now.

Speaker 3:

Yeah. So our risk pool provides risk management services and coverage to our members, and COIs come up a lot. Either they're looking for COIs from another party or we need to give them a COI for something that they're bidding for, and a lot of times there's pressure to have specific language within the COI. Right For the contractor to have a job. I want this language. So, scott, can you talk a little bit about that? What sort of language should be added, especially when it comes to construction? Because sometimes they'll get advice from somebody else. Here's the language I want in this COI, and sometimes that language and the way it's wording isn't exactly accurate. Somebody just told them. Can you put this statement in here? Can you copy paste, and is there due diligence in making sure that the language is correct? So can you kind of explain some of the things that you see in recommendations you would make when that comes up for agents?

Speaker 4:

Well, I'm based in Texas and fortunately our legislature got rid of a lot of that shenanigans about. You know, hey, this language the attorney made me add it, you know and successors and assigns, you know, I mean it. Just the list is endless. And so the in Texas, the legislature basically said these are the things you can put on there, and frankly, I think it's worked out quite well for everybody that way. There, you know, there's no, there's no misinterpretation on the COI as to what was the intent or what were you trying to communicate. And so when the legislature passed that law, it gave the agents an out and for a while, that's all you ever saw. On. Every certificate was per HB or SB8, blah, blah, blah.

Speaker 4:

But yes there's a lot of pressure from the producers on the CSRs to check the box. To check the box, okay, and I don't think you want me to go into, you know, whether it's appropriate or not. It doesn't really matter. You know the agent is trying to help his client get on the job site and if he didn't sell him the right endorsement, well then he needs to go back and tell them. But the insurance industry has really kind of helped the construction industry a little bit with the invention or evolution of the blanket additional insured by written contract. It really did. In one hand it made it easier with the issuance and the recording and everything else from that standpoint. But what it inadvertently did is create gaps in coverage. So while I may have a contract with my tenant as the landlord, I don't necessarily have a contract with the general contractor of the tenant, and so if he causes property damage or bodily injury, you know, am I additional insured? Who knows? You know I tend to say no, we're not.

Speaker 2:

But yeah, and and and Scott, I was I was going to say, cause the whole idea of this certificate of insurance discussion that we're having actually came to me and I think I had told you about it when I approached you about coming onto our podcast is, I was walking out of the grocery store one day and I picked up one of those Kansas City renovator you know little info zines or whatever, and it was, you know, made by the Kansas City Renovating Association or whatever. And right there on, like the second page, was the president's announcement to everybody and he was talking about why you should hire as, as a homeowner, why you should hire the people who are in this association, and one of them, one of the reasons, was that all of our people will add you as the homeowner, as an additional named insured on their COIs. And I'm like, oh, you know, scott, and I need to go have a little chat with them at their annual meeting, preferably their holiday meeting, because that's when they're all drunk, but and they have, you know, cookies, but I digress, uh, but that's actually what started this whole thing is me thinking, you know, you just can't sit there and say, hey, you're an additional insured, like a fairy godmother with you know, a wand or whatever, wouldn't you have to pay you as the contractor or the subcontractor or whomever an additional premium? And if you're not doing that or asking for it as the agent, then I'm not really the additional name insured. So again, I circle back to.

Speaker 2:

This is great. This is a great piece of paper. I'm going to use it as kindling for me starting my barbecue or something like that. What do you think?

Speaker 4:

Well, I think he's. He's just a marketer and has no idea what, what, how insurance works.

Speaker 4:

Does anybody, though I mean really does anybody you know, there's, there's I tell my GCs this and it came up today. There's two types of contractors. There's insured subs and there's uninsured subs, and those two don't play in the same ball fields. Now you can try all you want to take the uninsured sub and bring them over here to the big leagues, but it just, it never works. The job's done by the time, you know, and you still don't have a compliant COI. So you know, it's interesting, chantal, I still see here in Houston. It's interesting, chantal, I still see here in Houston the uninsured subs driving around the chuck in a truck and a cell phone and he's got right there on his door. The we're bonded and insured. Bonded and insured. I hadn't seen anybody bonded. I mean, first of all, we're talking about a crime bond, you know. But you know they don't even meet those. No, you're supposed to get a performance bond guys Performance bond.

Speaker 4:

Yeah, performance bond.

Speaker 2:

Oh my goodness gracious.

Speaker 4:

So you know, it's out there, it's out there.

Speaker 3:

So why do you think so many people ignore that at the top, where it says this for information purposes only does not convey rights to holder. It's right there, but there are some people who receive it and don't realize that it really is just an informational document. Like you mentioned earlier, it is not a contract. Why do you think that gets missed so often when it comes to COIs? Why do you think?

Speaker 4:

that gets missed so often when it comes to COIs. Great question, Sandy. I think it's just the whole world doesn't understand insurance. I think it's just once you start down that road it really does get confusing, and I think people's headlights go off and they shut down, and you know, that's at least what my wife does, and I like to bring in my beautiful bride spouse when I'm trying to talk to somebody. You know how would my wife receive this? Does she understand what I'm trying to say? And that helps me kind of keep it basic.

Speaker 3:

Yeah, I feel like in the world of insurance, as soon as it goes down that subject, it's just like the Charlie Brown wah, wah, wah, wah. And we're trying so hard to make it clear.

Speaker 1:

And then just creature, the forms too.

Speaker 3:

It's not reader friendly, right? It's like a 0.4 font and people's eyes just immediately glaze over as soon as they start looking at it.

Speaker 4:

Right, which is a good thing. It's job security.

Speaker 2:

I don't know. I tell my students how would you explain it to grandma? I mean, think about grandma who doesn't understand insurance. So that's the Well, no, I mean explain it to grandma.

Speaker 4:

but my point is, yes, I agree with you, sandy, it is confusing and it is technical and only insurance people understand it.

Speaker 2:

But I think that's by design. I do have, I mean, something to the effect of policy number CP001010-12, you know, bp13330522, whatever, and. And so I as a consumer, if I were a consumer, I would have no idea what those numbers mean, or even how to look them up, or if to look them up, or whatever. And there's a story that the dare I say, infamous Bill Wilson, or maybe just famous Bill Wilson talks about. When he hired a tree trimmer, he had received the tree trimmer's certificate of insurance and what he saw on there was that there was an exclusion for ongoing operations and completed operations, which meant that the tree trimmer was not insured to trim trees. And you know. So that is something that scares me when we're giving these things to consumers. You know, because, as an adjuster, I can sit there and look it up and I know to look it up.

Speaker 2:

And now all of our listeners know to look up what is specifically insured and what exclusions. And I don't think I've ever seen the exclusions listed. I think I've seen the base policy and that's it no exclusions, no endorsements, no, nothing. It just says, yeah, you got workers comp and this is the policy number, but no, you no drinking on the job exclusion or you know whatever. Um I I should it be listed. Should we be listing, like a certificate or a schedule of forms, along with our COI?

Speaker 4:

So when I started the business, everybody starts out issuing COIs. Okay, why did they make us do that 30 years ago? Because that was a way to learn the policy. That 30 years ago because that was a way to learn the policy. You had to read the policy in order to put the information onto a certificate of insurance. All right, fast forward 10, 20 years where your bigger agencies and the efficiencies and now everything's a profit center deficiencies and now everything's a profit center. The same new person is still issuing the certificates of insurance, but now they've got $300 to issue before the day's over, and the days have taken 30, 45 minutes to look up a policy and read it and figure out is the information correct. Those days are long gone, and so that's why you see a lot of errors out there. I think a lot of agencies take the position of just go ahead and send it out and if it comes back we'll deal with it.

Speaker 2:

I think that would open them up to an E&O claim. But that's a whole, as Sandy and I like to say, that's a whole different podcast. Yeah, it's a whole different podcast. It's a whole different podcast.

Speaker 4:

Well you know see.

Speaker 2:

I don't know, maybe it is an agency trick.

Speaker 4:

It is an agency trick, but you know what's the harm, what's the foul? Leaving it blank, and and that's what I see a lot. Yeah, just, I don't know the answer. I'm just going to leave it blank and if they come back then, then then we'll deal with it at that point. Sandy, there there is a lot of pressure from the, from the producers, the producers from the client, from the client's attorneys, to put stuff on the COI, and so, from a global perspective, I would always counsel, my agents, have procedures and follow them. Okay, there's only so much you could put on there legally and and don't deviate. And if, if, uh, you're getting pressure. Uh, that's for another podcast.

Speaker 2:

Yeah, that is for another. I do have a question. I have another question what? How? I guess? How would an adjuster know what is legal to put on, and I'm assuming every state is different because it's you know, insurance and what's not? Like I said, when I had those, I would get that GC or whomever who insisted that they were an additional name insured and I'm like you are not listed. There is nothing on this COI that you gave me that says that you're not, and right here it says for information purposes only. It's not a contract, you know. So is there something?

Speaker 4:

to that tells us everywhere, or? Well, let me remind all the adjusters that agents have a fiduciary responsibility to correctly fill out a COI. Okay, and so you know, is a blank a blank? Well, I just didn't know if they had a question.

Speaker 4:

But you get into, start into misrepresentations and putting false language on there, that that clearly they're not an insured but you're representing as a traditional insured, representing as a judicial insured, the agency's incurring liability there. And so when we start saying, oh, cois are worthless, I want to remind you of one little thing there is recourse when agents make misrepresentations. So you have to ask an adjuster. No, you can't go up and look up every endorsement. No, they shouldn't be listing exclusions on a COI. Absolutely, that could be requested.

Speaker 4:

But you're typically going to be looking at a very sketchy snapshot of what the policy is and take it for what it's worth and go from there. But yeah, certainly it's prudent to look up the policy form. You know is it a 0030 or whatever form you know is it a 0030 or whatever. But some agents will do a very thorough job. Your more mature agencies are going to have a more mature COI and your more junior, less seasoned agents are more sustainable to that type of pressure of putting stuff on COIs that they probably shouldn't, and hopefully nothing will ever come from it. But yeah, I see them all the time.

Speaker 3:

So I have to share a story and I want to know what you think about this, scott.

Speaker 3:

So let me start by saying bounce houses are the bane of my existence because they're rarely ever covered and I work in a world where everybody wants them and we always say, like, for special events, you get special event coverage.

Speaker 3:

But people don't want to pay for special event coverage, so they think it's set, I'll just get COIs from all of my vendors. And the number of times I've seen a bounce house vendor show up with their COI and it's blank, just says it's just a COI, and then it turns out the exclusion is if the bounce house is located anywhere else other than the main business address. And I'm like, well, of course it's going to be. That's the whole point of a bounce house. You pick it up and you take it somewhere and put it somewhere else, so it's excluded everywhere else. And it just really goes to show, I think, the level of confidence people who are not again familiar with insurance have in COIs, thinking, oh, I have a COI and therefore this activity is protected. And it turns out, because they don't have those exclusions, because they don't know the details, it's not.

Speaker 2:

Yeah, I think that's what makes me worried about you know, hiring these vendors or these contractors, like the people from the InfoZine or whatever. I'm like you know. Now I you specifically said that I know that's not true. You know, that's why I kind of disregard that. Of course, that's me being a skeptical adjuster as well, but I'm just like, yeah, but I know how to sue you and your mama and your mama's brothers and their dog and because I'm an insurance. So, anyway, you talk about recourses. I know everything.

Speaker 4:

Sandy, I think most of most of America shares your sentiment when it comes to COIs. And you know, golly the guy. The guy just hoodwinked me here. And there's, there's a lot of hoodwinking going on. And again there's the agents. When you have a customer that comes to you and says I need the cheapest policy to get me on the job site, it happens all the time, sandy, you do. You have two classes of people Really the insured and the uninsured.

Speaker 4:

You know, all I, I, I've, I've. You have the people that have that have experienced a claim and are still alive and by god, I'm gonna buy all the insurance I can now versus the. All the insurance I can now versus the ignorance. I've never had a claim. What's the worst?

Speaker 2:

that can happen. Oh sweetie, let's talk.

Speaker 4:

Yeah, exactly, I mean, you really do. The same could be said about cyber insurance. There's two types of buyers. There's people, the only people that buy cyber. They've either had a claim or they've had this Jesus scared out of them. You know, yeah, yeah.

Speaker 4:

And again, now we're kind of touching on the fraud aspect. And you know, um, from from my side of the fence, uh, that's that's where what do I see that looks fraudulent? Well, it's the typos, it's the X in the wrong box, it's the, it's the little things. You know, it's the jigsaw puzzle that this doesn't all fit together as it should.

Speaker 2:

That's a good question what should adjusters look for? Because I found an accord loss notice, which again I'll drop the link in to our show notes and everything. But I found one online, which means that every insured can find one online and just dummy up some numbers and all of that kind of stuff and print it out, which again goes back to my trust issues and control issues that I have, but that's again a whole other podcast with my psychiatrist here.

Speaker 4:

Well, again, it depends on how sophisticated the person issuing the certificate of insurance is Okay. If it's Joe Blow on the street who's gone over to Google and he's printed it off and he's sending it out, he doesn't know what an NAIC number is. He doesn't know what I mean there's just he doesn't know to use the current edition, the 2016-03.

Speaker 2:

Okay.

Speaker 4:

I'm going to have to remember that, you know, are they using is the agent, following best practices and using only current editions. Let me tell you, the current editions are a little harder to find online. Okay, and if you don't know that, you know well. So that's, that's a tip off. Um, so so we've talked about chucking a truck what if?

Speaker 4:

you got an agent out there who's a a cert factory, okay, well, again, there's, there's little tip-offs. You're you're to notice that these guys are lazy. They like to use the same form over and, over and over, and I'll just change the date, or I'll change this, and really, after a while, it looks like it.

Speaker 2:

I have seen that as well. I have seen the ones that have gone through the cop so many times, uh, that it's like halfway askew and everything. Um, I've seen those yes but that was of course back in the day before. I mean, really we I don't think we even had uh email yet.

Speaker 4:

I'm that old so but there's, there's just little things that only really insurance people know and the agents know, and they teach you how to fill out a COI. You know we want a uniform, we want all the same font, we want lines to match up, and when you start you know I mean sure everybody makes mistakes and typos, but but again it's a jigsaw puzzle. You know, does this look right? Hmm, and yeah, you know who's the client. You know, is this Albertson's? Is this Home Depot issuing the certificate, or is this Chuck in a truck trying to get on a job site? You know there's no definitive answer, but you know, when you start looking at different dates and how they're structured, it does it just looks like fraud.

Speaker 2:

What should an adjuster do when they see that? Should they contact the agent that is listed? Obviously, we're going to be contacting our SIU departments. Well, I mean, obviously we're going to be contacting our SIU departments. You know what should we do? What's our next step?

Speaker 4:

Great question. So well, you better make sure you know what you're talking about First of all. You better verify all the information. You better get your T's crossed and your I's dotted before you go accusing somebody of you know, it's one thing.

Speaker 3:

Well, this is a misrepresentation.

Speaker 4:

You know it's one thing. Well, this is a misrepresentation. You know fraud See, that's a different boat. Wait, I just said it was a misrepresentation. I didn't accuse anybody of fraud. That's misrepresentation. That is not what's on the policy. So you got to make sure that. Well, was it just a typo or was a mistake, or did you know the policy actually exist?

Speaker 4:

Yeah, Now so what do you? Do you know if, in fact, you know all your worst fears are confirmed and you just can't rule it out that it was just a typo? Because we do, we operate from a position of good faith and we give everybody the benefit of the doubt, and surely this is a mistake and he really didn't mean to say that and and and. When you get to that point of kylie, there's just no out on this. I guess it was fraud. Well, I say, look at your license. You know what do licensed professionals have to do when they've discovered an anomaly or suspect fraud. So I would refer back to your state guidelines as to what the next step is.

Speaker 2:

Yeah, and I think I would probably call the agent myself and go hey, did you issue this? You know, someone has put this down in your name because there's a place where you got to sign it as the agent or the authorized quote unquote representative or whatever, and that's a great place to kind of start your investigation, as well as a as an adjuster, I would think.

Speaker 4:

Yes, Chantal, it absolutely is prudent to call Once you've hit a point, to call the agent. You know share your concerns above board. Now I can tell you from personal experience when they go silent on you, the silence speaks volumes, yeah.

Speaker 2:

Yeah.

Speaker 2:

So, and I'm not necessarily saying that it was the agent who committed fraud. It could be the, the subcontractor who gave a false COI to our insured, you know, and there's a liability claim and so I'm calling the subcontractors alleged agent or whatever you know, because they just Googled an agent or something like that. So there could be. I actually had kind of a offshoot, so there could be. I actually had kind of a offshoot, but we, or my, my husband, had a claim about some stolen baseball equipment, one of these junior league baseball groups where they had baseball equipment stolen and the coach filed a police report, just like he's supposed to. But it was a fraudulent police report that he just pulled off, you know, the internet from his particular city, put down another coach as the investigating officer so that if we ever called him, you know it, we would go back to that.

Speaker 2:

And I mean, you know it took us a little work. I say us like it's me, I'm not doing anything, it's my husband. It took him a little bit to figure out what was going on. Uh, you know that this wasn't a real cop, simply by the way he was talking, and yeah, you know. And so it takes a little bit, but there's ways to to to figure it out, and it's terrible that we, that we live in this world, but but we do live in that world, so anyway, yeah.

Speaker 3:

I heard on some risk management podcasts I was listening to because you know podcasts are great, make sure you like and subscribe. But I was a podcast where they were talking about oh for COIs and the speaker was saying what I do is I make sure that I have it in the language of the COI that if this policy is canceled I have to be notified. But as we're discussing, it's so easy to copy paste verbiage in those areas. I'm just curious to see what you've seen, scott. Do you see agents adding that language? Do you see other people adding that language? And then are they following up if they do cancel it?

Speaker 4:

Are they notifying the person who receives a COI that the policy's been canceled? Another source of contention about COIs and let me remind our listeners that insurance fraud is in Texas is what we call five and five five years and $5,000 fine. So I forgot your question, sandy.

Speaker 3:

If you're seeing that in terms of either agents or I think the fraud issue is a whole other but agents putting in language, saying yes, I'll notify you if this policy.

Speaker 4:

Oh yeah, the cancellation. Thank you, the well. I think that's that's. Yes, it's absolutely another source of irritation for a lot of people because the it's not the COI's fault but but it's more of an industry fault. You know? I mean, really all we have to do tomorrow is say, okay, insurance industry, you got to notify everybody, but we haven't done that and until we do, we're going to blame the COI. Now there are notification provisions in a policy and it has nothing to do with the COI, but it has everything to do with if you're a mortgage holder or a lender's loss payable. That's the only time in a property policy I see where they have to notify you legally. Property policy, I see where they have to notify you legally. Everybody else is.

Speaker 2:

we will endeavor to and that's what the coi said we're going to endeavor to notify you that's a good point, because, sandy, I've seen the same thing and I'm like, how do they know? Because you know that one, that one little person, bless his or her heart, is just typing over the same darn form over and over and over again. We have no idea who they've issued this thing to.

Speaker 4:

Yeah, so. So that's that's, you know. A little little tip there. That's why I always push for the lender's loss payable is to hope that we get some notification. You know my system. I'm sending out an email 180 days and it's a simple email to the agent is coverage still in force? Yes, no, because you're right, we don't know. We don't know if they canceled the policy 30 days after inception. And that's just a little check, double check that I run. But you know it always comes around on the renewals, you know, when they drop their hired and not owned coverage. And we got to add it back on. And we got to add it back on, you know, and we got to tell them now quit playing games with us. We're, we know, but we don't know.

Speaker 1:

So yes, that is a there.

Speaker 4:

I don't have a solution for that. On on the liability side there is no legal requirement or technicality that says all the certificate holders got to get notified like you do on the first party insurance.

Speaker 3:

But I do love the sound bite of it's not the COI's fault. People are the root of the problem. It's the people doing things incorrectly, but let's not blame the COI.

Speaker 2:

It is absolutely the COI's fault. I'm still blaming the COI. You haven't convinced me. I'm going down with a ship.

Speaker 1:

Hey, I like COIs.

Speaker 4:

COIs are us.

Speaker 2:

COIs are us. Do you have a T-shirt that we can buy, like, I don't know, like? Do you have an Etsy shop or anything that says COIs are us?

Speaker 4:

Be careful what you ask for there, Sean Cole.

Speaker 2:

We might have to have COIs. Are us be our sponsor or?

Speaker 4:

something there you go Right, hey, hey, we sponsor a lot of things there you go Right, we sponsor a lot of things.

Speaker 2:

Scott, we're almost out of time, but I was going to ask what are you doing? Are you speaking anywhere? Obviously you're coming to Kansas City so that we could talk to these renovation people, because they don't know anything about COIs. Is there anything else that you'd really like to promote?

Speaker 4:

Well, thank you. I just want to promote COIs R Us. We are a turnkey service company that provides compliance tracking and the renewals, compliance tracking and the renewals. And you know what makes me different from every other vendor out there is you're, despite your best efforts, you're still back in the same box of data entry and knowing what's on a COI. I've seen it a thousand times and, frankly, I love picking up business from my competitors because they can't spell insurance and they cannot tell you why the certificate is wrong.

Speaker 2:

That's where I would say what your benefit is over someone else is that you actually know that there are a hundred spots to fill, as me, if I were doing it, I would not know that. And, and that's why you are trustworthy and we do have a couple of agents who listen to to us. That's why they should go to you Absolutely.

Speaker 4:

Well, and I get referrals from agents. You know they've got a good GC that every year they got to go in and hand them a bill. Oh, and listen to all the screaming about well I already paid all my insurance, and blah, blah, blah blah blah, and well, I already paid all my insurance and blah, blah, blah, blah, blah.

Speaker 4:

And well, you know, this is a great way to alleviate that conversation, you know, because if you've done it a few times and you got that GC who has the best intentions to collect the certificates and make sure that we're listed as an additional insurer and that waiver of subrogation what the hell is that? Anyway, you know, is that important?

Speaker 4:

Yeah, yeah yeah, and that's the insurance auditor. He's just adding them up. This one's rejected, this one's rejected, this one's rejected. Here's your bill. And so, agents, if you're tired of having that conversation, again. I'm a turnkey solution.

Speaker 2:

How do they get in touch with you, Scott? What's your like? Email address, phone number, website, all of that.

Speaker 4:

C-O-I-S-R-U-S dot com. Scott Margraves. Not hard to find down here in Houston, Texas, and you can call me at 713-416-9000. I'll answer the phone.

Speaker 2:

There you go, there you go, okay. So, scott, I'd like to thank you for joining us today, and we do have a little bit of sad news. I don't know if you knew this, scott. My normal partner is on an extended leave of absence, so Sandy has been filling his shoes, and today is her last day on the podcast with me.

Speaker 4:

Wow Well, sandy, it was certainly a pleasure getting to talk with you a little bit, and perhaps you'll come back.

Speaker 3:

Yeah, I mean, it's been great being on here with Chantal. Now she'll just have to, you know, hear me call her separately and vent about insurance and make my insurance jokes via direct message on LinkedIn. So she'll still hear from me. It's just the podcast won't always hear from me.

Speaker 1:

And my nonsense.

Speaker 3:

But yeah, it was great to meet you, Scott. It was a pleasure to meet you today and if I ever make it out to Houston, I know who to reach out to for COIs.

Speaker 4:

Fantastic. Well, thank you, chantal, for allowing me to speak a little bit about certificates of insurance, and have a great day.

Speaker 2:

Thanks. I do want to mention real quick before we we stop Sandy, thank you again for being such a great partner. We're not finished with guest hosts yet. We're going to have Heather Blevins on for the next six podcasts, so that will be super fun. She's been a guest here before, so she knows how it's done. Heather and I are going to be going back to school, which is August 28th, I believe, is when our next podcast will land, after this one, and we're going to be talking about what is good faith claims handling, which is what you just talked about. Basically, scott, you know we were talking about us being of the utmost good faith claims handling. We have to trust our insureds, but our insureds have to tell us the truth and all of this kind of fun stuff. So it'll be fun you won't miss it.

Speaker 2:

So thank you again everybody. Thank you, sandy, I appreciate it. Bye Scott.

Speaker 1:

Y'all have a great day. Thanks for joining us on the Art of Adjusting podcast, where we talk about life as an insurance adjuster.

Speaker 2:

If you enjoyed this podcast or this episode, please give us five stars and a review. It does help the algorithm pick us up.

Speaker 1:

Hit that subscribe button real quick and tell all of your adjuster friends to check this out as well. For independent adjusting services, go to wwwautinclaims, and for anyone interested in working as an independent liability adjuster, go to the contact us tab to join our roster.

Speaker 2:

In the meantime, you can contact me at theartofadjustingcom for consulting and training purposes.

People on this episode

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Chantal M. Roberts, CPCU

Co-host
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Heather Blevins, CPCU

Co-host
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Sandy Avina, MBA

Co-host
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William Auten

Co-host
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Nicholas Kearns

Editor