A quick look at the insurance claim process for the common people
An insurance claim is a formal request made by a policyholder to an insurance company for reimbursement of loss caused by a policy event. The policy event, also known as the ‘risk’, is usually a car accident, fire, or anything that causes damage to property. Once, there is a claim; the insurance company determines its validity. If approved, the insurer will either:
(1) give you money as compensation, or
(2) the insurer will pay for any of the liabilities you incurred.
In a nutshell, that would be the entire claiming process. However, there are many things policyholders do not consider when making a claim. The whole process can be a bit complicated, and a misstep can lead to the denial of your claim.
Don’t fret! In this article, we’ll simplify the process, and enumerate the dos and don’ts of making an insurance claim.
UNDERSTAND THE COVERAGE OF YOUR POLICY
You, as the policyholder, must know the risks covered by the policy. Auto insurance, health insurance, life insurance, fire insurance – there are many kinds of policies. Understanding the difference between them is vital. Don’t expect to claim anything from a car insurance policy when you’re diagnosed with diseases!
The policy also lists the documents you need to prepare when the risk occurs. Study the policy thoroughly. Ensure that it fits the needs of your family or business.
DON’T FORGET TO PAY YOUR PREMIUMS
You won’t be able to claim anything if you fall behind in paying your premiums. Always keep the receipts as evidence of its payment. Policies usually grant a grace period if you miss out on an instalment. Nevertheless, if you feel like you won’t be able to pay on time, attempt to sort things out with your insurance agent.
THE INSURANCE CLAIM PROCESS
1. EVALUATE THE VALUE OF THE LOSS
Once you suffer a loss from a policy event, immediately assess the value of such failure. Afterwards, determine whether the damage is less than your deductibles.
A deductible is an amount you are responsible for paying for concerning the loss. When you suffer from the policy event, the amount is in effect deducted from your claim.
To illustrate how this works, a policy has a $1000 deductible. The insurer’s assessment states that the total value of the loss is $5,000. In this instance, the $1000 amount shall be borne by you, and you will be receiving $4,000 should you make a claim.
In effect, the $1000 deductible is a threshold you need to consider before filing an insurance claim. Always ask yourself: Will my claim be higher than the deductibles? Suppose that in the same example, you suffered a total loss of $1300. Would it be worth the hassle to file a claim for a $300 payout?
Quantifying the loss is an essential step before you attempt to make an insurance claim. It’s a good idea to file a claim only when the total loss is much higher than the deductible. On the other hand, filing a claim even for a small payout can assist you in times of financial struggles.
2. REPORT THE RISK WHEN IT OCCURS
Contact your insurer immediately if you think the total loss is more significant than your deductibles. Most insurance companies have 24-hour customer hotlines, so keep their contact information updated and ready.
Additionally, contact the police when necessary. A police officer will assist you in making a police report, which is often a documentary requirement when making claims. Likewise, some insurance companies even call the police when verifying the loss. Hence, be honest when narrating the facts to your insurer and the officer.
3. GATHER AND SUBMIT THE REQUIRED DOCUMENTS
Imagine the stress of being in a car accident! To avoid scrambling at the last minute, always keep a list of the documents you need to prepare in case you need to make an insurance claim.
Insurers can be very strict with the documents they require. Records must accurately state critical facts, such as the amount of the loss sustained. Receipts can be proof for the amount of loss. Other evidence of loss can come in the form of police reports, photos, and videos.
For health and life insurance, your healthcare provider can make a claim for you. Alternatively, you can make a claim yourself by preparing the required paperwork.
4. GET A LOSS ASSESSOR OR CLAIMS ADJUSTER
Insurance companies may also opt to appoint a loss assessor. This usually happens when the incident is complicated and requires technical expertise. Be honest when communicating with the assessor. A slight hint of dishonesty or a cover-up for the actual loss can lead to the denial of your claim.
In some policies, however, the appointment of a loss assessor is optional. Nevertheless, you may opt to get an independent claims adjuster. This ensures an accurate assessment of the loss and speeds up the process of settling the claim.
5. KEEP THE INSURED PROPERTY INTACT
In property insurance, it is essential to preserve the damaged property. This is to ensure an accurate assessment of the loss, should the insurer send an assessor.
Suppose a fire gutted your business (which is covered by a fire insurance policy). Once it’s extinguished, don’t attempt to clean the rubble just yet. Take photos and videos. Call your insurer so they can send a loss assessor.
For some auto insurance policies, an assessment of the loss is a requirement before a payout. Hence, when you suffer from a car accident, keep the remains away from further damage.
COMMUNICATE WITH YOUR INSURER
When you keep up with your premiums, always expect good service. If there’s something you don’t understand in the policy, contact your insurance agent. During the assessment process, be upfront with the claims adjuster so you can get an accurate assessment. Do not withhold any evidence regarding the risk.
Some insurance companies have a reputation for being stingy with claims. From time to time, make a follow-up on the claims process. Do not be afraid to inquire when the assessment is moving at a snail’s pace. Your insurance agent should be able to walk you through the entire process.
When the insurer fails to deliver on the policy, inquire with a lawyer. Above all else, a policyholder is a consumer. Therefore, if you aren’t satisfied with how the insurer handles your claim, take the legal action, if necessary.