Lesson 3: Insurance Claims
When an insured suffers a loss which is covered by the insurance contract, he or she can make a valid claim for the loss.
Unit 1: Procedures for Payment of Insurance Claims
The following are the procedures involved in getting payments for insurance claims:
1. Claim notification:
Claim notification is the process of informing the insurance company about ‘a loss. The insured is expected to notify the insurance company as soon as a loss occurs. There is usually a claim notification period limit, after which the insured might not be able to demand claims from the insurance company.
2. Submission of the necessary documents:
These are documents required by the insurance company for the insured to substantiate his loss. These documents vary according to the class of insurance involved.
3. Discharge voucher:
After the loss has been assessed by the insurance companies and there are no disputes, they will issue a discharge voucher for the amount they want to settle and give it to the insured to sign. His signature gives a valid discharge to the insurance company.
Unit 2: Insurance Claims – Duties of the Insured
(i) An insured event that causes a loss must have occurred.
(ii) He should prove that he suffered a loss as a result of the insured event
(iii) He should do everything possible to minimize the extent of the loss
(iv) He must notify the insurance company as soon as possible.
(v) Submission of the necessary claims documents.
Unit 3: Insurance Claims – Duties of the Insurance Company
(i) Ensure that the policy was in force
(i) Ensure that no premium was outstanding.(iii) Investigate the loss
(iv) Prompt payment of the loss
Unit 4: Loss Adjuster
A Loss Adjuster is a claims specialist, appointed by, and working on behalf of, the Insurer to investigate major insurance claims. The types of claims a Loss Adjuster may be required for would perhaps involve a fire or flood at a business premises. Smaller, more straightforward claims would not necessarily require the services of a Loss Adjuster to achieve a settlement.
What does a Loss Adjuster do?
A Loss Adjuster would typically be involved with investigating the circumstances of the incident which led to the claim, gather evidence and assess the damage. For a major or contentious claim they would generally visit the site of the loss to compile a report for the Insurer. They would usually be looking to establish the cause of an incident leading to a claim and to determine whether the loss is covered by the insurance policy.
Who are they working for?
A Loss Adjuster works on behalf of the insurance company although they do follow a code of conduct which demands that they should be impartial. They are not appointed to provide advice to the person making a claim – simply to look at the loss suffered and the context of that loss to the relevant insurance policy.
How long does it take?
The time it takes for a Loss Adjuster to submit a report and recommendations will depend on the complexity and size of the insurance claim in question. Substantial losses can take some time to assess.
Can I appoint my own Loss Adjuster?
No. A Loss Adjuster will be appointed by the Insurer to investigate and report on the details of the claim. As the insured party, you can appoint a Loss Assessor to manage a claim on your behalf and attempt to negotiate the best settlement possible for your claim.
A Loss Assessor is likely to be an insurance professional who has a good understanding of how claims are dealt with and would be able to help you throughout the process. The services of a Loss Assessor would be at the client’s own cost.
Functions of a Loss Adjuster
The main functions of the Loss Adjuster are to:
a) Visit the site of a loss to survey and assess the damage
b) Record details of the loss with photographs if possible
c) Ensure that the site is secured after the loss. This is vital to prevent any further losses occurring which might increase the claim still further.
d) Recommending local repairers
e) Advise the policyholder and the insurance company on the most suitable way to carry out repairs by issuing a full report f) Investigate any suspicious claims by inspecting records to establish that the property being claimed existed
g) Liaise with other insurers to negotiate the spread of liability
Unit 5: Loss Assessor
A Loss Assessor is appointed by the policyholder when they need to submit a substantial or complex claim. All fees are paid by the Policyholder.
Functions of a Loss Assessor
Loss Assessors will handle all aspects of the claims process, including; a) Meeting with insurance company representatives or their appointed Loss Adjusters
b) Preparing the claim
c) Negotiate the best possible settlement of the claim
d) Deal with cases where a claim has initially been declined by the insurance company or where problems or delays have occurred in agreeing settlement.
Scroll Down to Select Page 5 for the next topic – Lesson 4: Insurance Premium
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