RICK CURRY IAM Governing Member at Large President, Gateways International, Inc.
BRETT COAKLEY Attorney-Advisor U.S. Air Force Claims Service Center
STEVEN R. KELLY Chief of Personnel Claims Branch U.S. Army Claims Service Center
KEVIN SPEALMAN Vice President & General Manager National Claims Services
New Claims Business Rules by Kevin Spealman National Claims Services, Inc.
New Claims Business Rules Industry and MCO Personnel have been meeting since March, 2010 – they went into effect July 2, 2013 Rules are to apply to all types of military shipments – no separate rules for NTS, etc. Good cooperation between MCOs and industry – nobody got everything they wanted
High Value/High Risk High Value Items - no longer limited to the previous exclusive listing 1.7.1. High value/high risk items may include but is not limited to currency, coins, jewelry… This affords additional protection to industry, in capping liability at $100 for items not noted on the form, and additional protection to the customer in that ALL valuable items are afforded the additional protection
Notice of Loss/Damage TSP must enter delivery info in DPS within 3 days of delivery, or 75 days will not begin until info is in DPS If member asks for extension, TSP must contact MCO before denying Day for day extension for TDY so long as TDY fell within the 75 day notice period TSP should ensure member gets an email address and toll free number to call
Appearance Allowances TSP liability is still the lesser of repairs vs. replacement While we were unable to get language that would have “legitimized” the appearance allowance, it does remain an option for the TSP in cases where the member is in agreement TSP should not ONLY offer an appearance allowance This option is appropriate where member prefers a cash allowance rather than actual repairs, or does not want to give up a replaced item for salvage
Salvage TSP is not limited to 25% deduction when it knows that member won’t give up an item for salvage (member does NOT have the option of getting 75% of the replacement cost AND keeping the item) Any appropriate appearance allowance (cash out) can be made to claimant in lieu of salvage If the customer is willing to give up the item for salvage, and the item is beyond economical repair, the TSP is obligated to pay the full replacement cost
Time Limitations Definition of what constitutes a claim requires a specific or “determinable” amount of money (lack of an amount claimed does not necessarily mean that it’s not a legal claim) Claimant must respond to an offer made by the TSP, although they can still forward to MCO if no offer made within 30 days. TSP must submit requests for extensions for the 9 month or two year deadlines
Horse Trading Section (Partial Settlements) New verbiage replaces poorly written section in 400NG We can now make an offer that is “valid as a whole,” or includes contingencies Offers of this kind must be clear, in writing, and adhere to the format and process as specified in the new business rules (TSP must first make specific offers for each item, and subsequent alternative agreements must be drafted by TSP, written with certain verbiage in bold face type, and signed by both parties, etc.)
Sets & Pairs MCOs viewed Sets and Pairs provision as a necessary element of FRV This is possibly the worst change for the TSP community. TSPs now obligated to replace the entire set when they are otherwise unable to fix or replace the part of the set that is damaged May not be as bad as it seems however, as many customers are reasonable and TSPs can still “horse trade”
Miscellaneous New language does require the TSP to send the service member a copy of the estimate if the member requests it (previously TSP had to provide only the MCO with a copy) MCO must ask the TSP for relevant information from their file (to get the TSP’s side of the story) before settling a claim that has been forwarded to the MCO Any repairs must be to the “reasonable satisfaction” of the claimant
Other Resources See also Army Guidance document provided by Mr. Steve Kelly of USARCS Actual business rules – go to SDDC website and search on Claims Liability Business Rules www.ncsclaims.com – and go to “The Military Claims Blog”
TYLER SMITH Senior Manager, Claims & Quality Assurance Government Logistics N.V. (Gov/Log)
Mold Business Rules Tyler L. Smith Government Logistics N.V.
SDDC Subcommittee on Mold Formed in Feburary 2012. Military Panel members are from SDDC, AMC, MCO Chiefs/Deputies, Transcom, Army, Air Force, Navy and Marine Corps Transportation Commands, various PPSOs. Industry Reps, Tyler Smith (Government Logistics), Kevin Spealman (National Van Lines), Sandra Maier (Jet Forwarding)
Why New Business Rules? Originally the Military Transportation Commands felt that Industry wasn’t doing enough to prevent mold in shipments. Marine Corps HQ had led the quest for changes primarily due to a sudden increase in mold-damaged shipments.
How Mold Damage is Occurring Code T and J shipments being allowed to sit on uncovered tarmacs in severe inclement weather for extended time periods. Shipments coming out of areas with known high humidity and mold problems (Guam, Okinawa, Japan, Korea, etc.) Service Members living in Government-Owned Quarters, identified as being sub-standard with mold problems. Inherent Vice: No water penetration into containers. Small minority of shipments getting wet during loading or transit.
Changes Advance Payments to mitigate shipments such as Code T/J. Transportation will send QC to physically inspect the contents of containers that appear to be contaminated; if QC does not come out, TSP will be absolved from mitigating the damages. If PPSO orders testing for Mold, and no Mold is present, PPSO will pay for the testing. Customer may refuse items remediated, but will only receive the costs TSP paid or would pay to remediate the item and not FRV. On shipments where the TSP is relieved of liability Code T/J, “Acts of God,” all additional labor, remediation costs, storage, handling, and multiple transport costs will be reimbursed to the TSP.
Code T/J Water Damages Work with your Port Agent AMC (Airlift Mobility Command) will generally not allow Inspections (breaking down of the pallets) by the TSP at the Military Terminal. Port Agent when breaking down the pallets in their warehouse, must note if any shipping containers are wet or were once wet! Take pictures! Prepare a report! Port Agent must send the report and pictures to a POC at the AMC Terminal. Send Pictures and report to the TSP. Deny Liability if the Port Agent notes water damages and reports it to AMC.
Recent Developments Airlift Mobility Command (AMC) has instituted the following new changes for Code T/J shipments: Complete and document 100% visual inspections of PPTY at originating, en- route and terminating stations. When palletizing PPTY, Port Agents and Aerial Ports will ensure PPTY shipments have TWO NEW Plastic Pallet covers secured under the Net-Set. In rare cases where no options are available, PPTY will be the last commodity temporarily stored outside. When all other resources have been exhausted and PPTY must be temporarily stored outside, Ports will utilize an industrial grade multi-use pallet cover that is tear and UV resistant, water/mildew proof, and has reinforced corners and seams. Procure reinforced covers using unit funds. When stations identify wet/damaged shipments, they will notify HQ AMC of all occurrences within 24 hours and maintain a local database.
ALAN R. JOBE Executive Director Claims Prevention & Procedure Council, Inc.
What or who is the CPPC? What can it do for me? Can it make a difference?
Claims Prevention and Procedure Council, Inc. or CPPC for short.
The Mission of the CPPC : We are a growing, active, non-profit organization of claims professionals in the moving and storage industry, and professional service providers such as furniture repair professionals, appraisers, adjusters, attorneys, etc. Our twin goals are: (1) to prevent claims (such as damaged and/or missing items) in the moving and storage industry, and (2) to handle claims professionally once they do indeed occur. If it has to do with claims in the moving and storage industry, our 900 plus members are involved!
The CPPC: Connects you to Qualified Individuals to be your front-line customer service. Can handle Emergencies. Can handle normal transit claims. Can save you from paying non-transit related claims or simply cashing out a customer because you do not know what other options you may have.
Cashing out a claim to a customer is not always the right answer! Repairing an item will make a customer whole again and will remove the damage from the customer’s vision. Removing damaged items that are not repaired from a customer’s home will get them out of sight and prevent them from being transported again. Cash outs are necessary, but simply paying a customer to mark the claim closed can cost you far more in the long run.
CPPC Membership Member Search of Data Base By Name By State By Zip Code Service Area By Type of Services By Zip Code with mileage qualifier Monthly Publication Hardcopy and Digital R-kived past publications Searchable options Educational Library being established
The CPPC is here to link you to who you need to extend your service to your customer. Join us today and know you have representation at the end of the move, when and where you need it. Alan Jobe, your CPPC Ambassador
BILL ROSE President Willis Relocation Risk Group
FRIEND OR FOE COMMERCIAL HHG CLAIMS Date: Oct 9, 2013
WILLIS RELOCATION RISK GROUP Title of Presentation – edit in master | 39 Willis Group Third Largest Insurance Broker in World HQ in London and New York $3.5 Billion in Revenue 17,000 Associates in 150+ Countries Willis Relocation Risk Group Housed in Washington DC / London Focus on Mobility Risk Arrange Coverage on 35,000 Shipments Per Year 5% Military 25%GSA 70% Commercial Settle some 8,000 Claims Annually Focus Today on Commercial Claim Compare / Contrast Military / GSA / Commercial
HHG Claims Are ……. Inevitable A Hassle Result of Internal Service Failures Someone Else’s Fault / Responsibility Something for the Insurance Folks to Deal With Bad Luck Expensive (Direct or Indirect Costs) Shippers’ Last Memory of The Move Customer Service Opportunity Learning and Improvement Experience Risk Management Tool Dependent on Circumstances What You Make of Them Response is Driven by Organizational Culture Title of Presentation – edit in master | 42
Developing a Strategic Relationship With HHG Claims Risk Profile Claims Data and Context Claims Adjusting Culture Analysis / Communication Improvement Strategy Title of Presentation – edit in master | 43
Step 1: Identify Risk Profile Program Cost Influencers Loss Frequency Loss Ratio Estimated Loss vs Total Payout Total Claims Paid and Reserved Shipment Values Adjusting Practices / Including Subrogation Conveyance Breakdown Origin and Destination Countries and Cities Origin and Destination Agents Customers (Corporate) Shipper Expectations and Behaviors Shipper Counseling Pre Move / Post Loss Rates and Corresponding Premiums Program Management Costs Factors that Impact Your Organizational Risk Profile Title of Presentation – edit in master | 44
Step 2: Identify Risk Profile / Create Loss Model Title of Presentation – edit in master | 45 Loss Frequency Severity and Ratio Conveyance Sea, Air and Truck Regional Route Supply Chain Partners OA and DA Customers Shipment Values Severity of Loss Cause of Loss
Step 3 Identify Risk Profile / Claims Adjusting Culture Examine The Current Claims Adjusting and Subrogation Process and Culture Title of Presentation – edit in master | 46 Current Claims System and Culture Who Adjusts / Who is Responsible Flow Chart the Existing Process Claimed vs. Paid Audit Time from Filed to Settled Claims Paid Stratification Subrogation Procedure Large Loss Review / Info to Correct Recipients
Claims Reduction Strategy (Historical Perspective) Pre Loss ID high value items Paperwork (exceptions / legible) Electronics (note age / condition) Parts Box / Hardware Rugs: Roll…not fold Clothing: Hangar damage Packing Materials: Labels etc. High Value items: Proof of value Unattended vehicles / goods in same Courtesy Develop Mold and Mildew Protocol Post Loss Implement Mold / Mildew Protocol Mold / Mildew: No Delivery Legible Delivery Report DA Opinions (keep to yourself) Keep Damaged Items Do Not Attempt Repair Send Docs ASAP Immediate Contact to Claims Partner Empathy / Courtesy: Manage Emotion
Claims Happen Develop a Culture to Learn from Them and Improve