Here are some guidelines of what to do or not do that would work for both your personal as well as commercial insurances to avoid prolonged or contentious claims processing.
- Have and maintain an insurance file – Keep all insurance information together in one file or place. The policy document should be within easy reach to review the coverage eg. Is the loss as a result of an insured peril? What is the policy deductible? Is the loss amount greater than the deductible and can a claim be made under the policy?
This file should also include:
– Updated lists of electronic equipment providing make, model and serial numbers.
– Appraisals or recent invoices for jewelry and fine arts
- Ensure your sum insured is adequate – If you are insuring on reinstatement basis the sum insured must reflect the cost of rebuilding or replacement with a new item. If the basis of cover is indemnity then the insured value should reflect the market value, i.e. the price for which the item could be sold in the existing state prior to the loss.
- Notify your broker or agent or insurer of the loss as soon as possible – Immediately contact your insurance advisor to inform them of the incident to begin the claim process.
- Always act as if you’re not insured – Take normal prudent measures to safeguard the damaged item or site to avoid further damage as well as to secure for survey by a loss adjuster. This is evidence of your loss.
- Know and comply with the policy timeframes – Note from the policy document or through your insurance advisor the deadlines for reporting losses and submitting your claim, repairing or replacing the damage.
- Co-operate with your Broker or Agent – Your broker or agent is experienced in claims processing. Listen to their advice.
- Obtain supporting documents – Eg. Estimates, independent expert reports, bills, detailed descriptions of damaged items, etc. form part of and support your claim to the insurer.
- Follow up your broker or agent – If they are not keeping you advised on how your claim is progressing don’t hesitate to keep on top of them.
- Start repairs without insurer’s or adjuster’s approval – Although you may be inclined to quickly reinstate your property as it was before if not better, proceeding with repairs prior to the Insurer’s approval could prejudice your claim settlement.
- Discard damaged items – The insurer or adjuster would need to survey the damage to qualify and quantity your loss. Disposing of the evidence is tantamount to not getting your claim settled. In circumstances when it is necessary to immediately discard items for health reasons as in dead livestock or putrefied foods discuss with your insurance advisor who would arrange an immediate survey or obtain approval for swift disposal.
- Wait to obtain all information to submit complete claim – This delays the processing of the claim. Submit documents as soon as you have the necessary information. The insurance advisor is accustomed to receiving the information piecemeal as they keep a tab on what is outstanding to finalize the loss. Also depending on the partial information submitted an earlier settlement may be possible or there may be a change in how the claim is handled, which otherwise would have waited until all documentation is presented in one package.
- Assume the claim would automatically be adjusted downward – Too often insureds exaggerate their losses in the opinion that the adjuster or insurer would reduce the claim amount anyway. The insurer is legally obligated to settle your claim to the extent of the cover purchased. Your insurance policy also carries a condition to void the contract if a fraudulent claim is made against the insurer. This will work against you.
- Meet with loss adjuster/insurer without your broker’s approval and /or presence – Sometimes an innocent statement could be misinterpreted by the adjuster or insurer and have a negative impact on the situation. We are not advocating deceit or withholding information from the insurer, however your advisor is the insurance expert acting on your behalf and has the experience on how insurers may interpret information.
- Assume your friends/colleagues claims experience would be yours – Everyone is an expert on insurance matters and your friends are always willing to offer advice on how to treat with the situation. Their experiences are not necessarily yours and following their advice could work out unfavourable.
- Impart important information to insurers/adjusters verbally – Communicate all information in writing. Again verbal communication can be misinterpreted or misquoted.
- Accept claims settlement without agreeing it with your broker/agent – Insurers may mistakes in the calculation of a claim. Your advisor would be able to confirm the appropriateness of the quantum offered.
- Sign ANY documents without fully reading and understanding them – Apart from being basic common sense, you could in frustration to bring an end to the whole process sign off on a document, which could impact negatively on your claim.Discuss all documents to sign with your insurance advisor to understand the consequences of signing.