As an insured person, you may not wish to make a claim because it may affect your insurance negatively by raising your premiums. To make a claim, it also means that you have suffered loss which is not something pleasant. However, though undesirable, you cannot tell when the insured peril will occur, so you may find yourself having to make a claim anyway. By taking insurance coverage, it means that you acknowledge the possibility of the insured peril occurring. Therefore, to be fully prepared, you need to understand the insurance claim process. It may be a car accident claim, a claim for disability, or any other insurance claim that may be relevant to you. You should also have an idea of relevant concepts such as loss adjustment and settlement of claims.
What is an Insurance Claim?
An insurance claim is a formal, usually written request to your insurer asking for payment in accordance with the terms of your insurance policy. You can only make a claim after the insured peril has occurred. You can only make a claim for the loss insured. For example, if you take an insurance coverage for any loss caused by a fire, and you suffer loss from flooding, you cannot claim the flood under your policy. Determining whether your loss is as a result of the insured risk is not as simple as the illustration we have used here. Sometimes there is a very thin line between the insured risk and the risk that actually causes loss to you. In such a case, you may need to consult an insurance claim lawyer.
Insurance Claim Process
When pursuing an insurance claim, whether personal insurance or property insurance, you should;
- review your insurance policy
- weigh your options
- make the application
Reviewing the Policy
Insurance companies will only indemnify you for the specific loss covered. Reviewing your insurance policy is important in ascertaining whether you are entitled to claim under the policy. Many policies will have exempted losses for which you are not entitled to indemnity. Your policy may also stipulate specific claim procedure that you have to follow and the time within which you are required to make the claim. Therefore, it’s important to review your policy before rushing to make a claim.
Weigh Your Options
Even after establishing that you have a good claim, you should consider whether it will make economic sense to make the application. Remember you are not obliged to claim every time the insured risk occurs. If you make a claim, your insurance may raise the amount of premium that you will pay in future and if you do not make a claim for a long time, the insurance may revise your premiums downwards. You should always be guided by the overall economic benefit that is likely to result from your decision to claim or not.
Making the Insurance Claim
If you are making a claim, your first step is to get in touch with your insurer or insurance broker. If they ask you for any relevant documents, you should be ready to produce it. Examples of these documents include an accident report in case of a car insurance claim, a medical report in case of health insurance and a death certificate where you are making a life insurance claim. Your insurer will then examine your claim and inform you if it intends to pay you or not.
Matters after an Insurance Claim
- Insurance Claim Adjustment
Where your insurer determines that you are entitled to claim under the policy, it will work with loss adjusters to ascertain the exact amount that you should receive. Where you recover for total loss of the insured item, the insurance company will be entitled to subrogation. That means that the wreckage of the item in respect of which the company has paid your claim will thereafter be the property of the company. -
Insurance Claim Settlement
Settlement may involve cash payment, replacement of the lost or destroyed item or repairs at the expense of the insurer. Remember one of the principles of insurance is indemnity which means that the insurer should only restore you to the position you were in. You are not entitled to make a profit out of your insurance coverage.
Your insurance claim may not be settled as you expect. Sometimes, the company may even refuse to settle. When this happens, you should get in touch with an insurance claims lawyer. The lawyer will assess your claim against the terms of the policy and decide whether the denial by the company is in good faith or not. The lawyer may advise that you sue the company where there is no reason why it should deny your claim.
Special Steps for a Successful Car Accident Claim
- Call the police as soon as the accident occurs
- Exchange information with the driver of the other car in case of a collision. The information should include the other car’s model, make, and plate number, the identity of the driver and details of their insurer if any.
- Get contact information of some passengers or eyewitnesses because the case may end up in court.
- Contact your insurer before towing the vehicle from the scene of the accident
Making a successful insurance claim involves a lot. However, we believe this short summary has given you at least the basics of what insurance claim entails.
