Insurance Claim

AUTOMOTIVE INSURANCE CENTER

A CLAIM is a demand for payment for a loss that is due or believed to be due under the terms of an insurance contract.

There are 3 parties generally involved in an accident. The Insured (First Party), The Insurance (Second Party), The Claimant (Third Party). If there are additional parties involved they would be (Fourth Party, Fifth Party, etc.).

The Insured is the party who holds the policy contract with the Insurance company. The Claimant is someone who has suffered a financial loss and asserts a legal right to be indemnified or compensated for that loss.

Follow these steps: Call your insurance agent as soon as possible, regardless of who is at fault. Find out whether you're covered for this loss. Even if the accident appears minor, it is important that you let your insurance company know about the incident. Ask your agent or company representative how to proceed and what forms or documents are needed to support your claim. Your insurance company will require a "proof of claim" form and, if there is one, a copy of the police report. Increasingly, companies allow you to monitor the progress of your claim on their web site. Supply the information your insurer requests. Fill out the claim form carefully. Keep good records. Get the names and phone numbers of everyone you speak with and copies of any bills related to the accident. Ask your insurance agent or company representative: Does my policy contain a time limit for filing claims and submitting bills? Is there a time limit for resolving claims disputes? If I need to submit additional information, is there a time limit? When can I expect the insurance company to contact me? Do I need to get repair estimates for the damage to my car? Will my policy pay for a rental car while my car is being repaired? If so, how much? Remember, each state has its own laws governing the claims process.

*Note: every insurance carrier is different as to their procedures for claims handling, but they all should follow the guidelines of the Department of Insurance in their state. You may want to review your insurance policy for filing procedures. Also, review your policy for any special requirements or restrictions. The following is a general synopsis of the claims process.

The first step when filing a claim is to promptly report the accident to your carrier. This may be done directly with insurance carrier if they have provided an insurance procedure card with your policy. There will usually be a toll free number listed. When you call this number please realize that the first person you speak to will not be handling your claim and is only taking your information and you will need to know your policy number and some general information about the claim. This person should be able to assign a claim number to you immediately, although some companies use your policy number as the claim number. You may be given the name of your claims representative at this time, but this information is subject to change by the claims office depending on that representatives workload.

If you were not given any information on claims reporting, you will need to contact your agent or broker immediately and they should be able to report the loss to the carrier.

After the insurance company receives notice of a claim and it assigns a claims handler to the case, the claim-handling process can begin. The purpose of this process is for the claim handler to determine as closely as possible the true amount or value of the claim and to reach an agreement on that issue with the claimant.

The claim-handling process involves three primary elements, all of which must be included to some degree whether the claim is a first-party claim or a third-party claim, a large claim or a small claim.

The claim handler first plans and prepares an investigation of the claim. The objective of that investigation is to gather all pertinent details about the facts and circumstances of the claim, including:

- The insurance coverage
- The exact cause of the loss
- Any legal responsibility of others for the accident or occurrence that caused the loss
- The nature and extent of the damages

The claim handler constantly seeks answers to questions about coverage, bodily injury, property damage, or legal liability as they arise. All the details are evaluated as they are acquired and compared with all the other data. The claim handler makes a strong effort to be as fair, knowledgeable and realistic as possible in that evaluation.

When the claim handler is confident that all the questions have been resolved, he or she has a basis for deciding how disposition or resolution of the claim should be accomplished. That is, whether the claim should be paid in full as presented or paid as a compromise settlement or in some other form, or if there is legitimate reason why the claim should be denied.

You should hear from your claims representative in 1-5 days. A Claims Representative responds when there is a claim against a policy, manages it though a unique process that involves investigating it to verify the facts about it, evaluate those facts and then guide the claim to its proper conclusion. If you have not heard from your claims representative in a few days you may call the claims office or your broker to find out the status of your claim. Please remember that most claims representatives are very busy and receive many phone calls every day, so they will return your call in the order that it is received.

When the claims representative contacts you, he or she may want to take your recorded statement as to the loss. This is common with all insurance companies in order to preserve the statement for possible court or arbitration hearings. During the claims investigation the claims handler must make sure coverage is in order and determine liability. Please follow your Insurance carriers guidelines for resolving these matters.

The next step after coverage has been confirmed (liability may take longer), is to pick a repair facility. Your adjuster will advise you if there are any special stipulations in your policy which state that you must repair your vehicle in a provider shop. I f there are no such provisions, then you are free to pick a repair shop.

The Claim Department is responsible for the prompt, proper and fair disposal or claims made against the company and its insureds. Providing good customer service is an important goal of the Claim Department because of the favorable impact good customer service can have on the company overall. Claim handlers have the greatest influence on the product and are ultimately responsible for the product's quality control, which in turn can affect the company's reputation for good customer service.

As "quality control specialists," claim professionals have many legal, moral and business obligations they must fulfill if the product is to be of a high quality. Following are three such obligations that can have a strong impact on product and customer service quality.

Claim professionals must see that the contractual promises that have been made to policyholders are honored promptly, equitably, in good faith, and with fair dealings for both the policyholders and the company.

Claim professionals must control claim costs as much as possible. They must see that the company does not pay any more that it legitimately owes for claims through its contracts and the law. Controlling claim costs can benefit the company and its employees through a favorable impact on the company's financial performance. A company's insurance rates are determined by the amount the company anticipates it will need to pay under its contracts. So, controlling costs can also benefit the policyholders by ultimately helping the company maintain lower premium rates.

Claim handlers must comply with all laws and regulations pertaining to handling insurance claims.

- An example of the legal requirements, consider that many state laws require that within a specified period of time (ex. 10 or 15 working days) after receiving a claim and unless the company pays the claim within that time, the claimant must be notified that the claim was received by the insurance company. The company must send the necessary claim forms to the claimant. Also, the company must provide the insured with reasonable assistance and instruction about what to do to comply with the policy's conditions and any other requirements. These tasks usually fall within the claim handler's domain.

It takes many people working together before an insurance claim can reach its final resolution. Although most of the activities related to claims revolve around the person who is in charge of managing the claim, many others also make valuable contributions, including Claim Department support personnel and others within an insurance company who do not manage or process claims but whose work indirectly affects claims against the company's policies.
The primary objective of claim management is to strive to resolve every insurance claim fairly, justly and rationally for all concerned.

When an insurance claim is assigned to a claim representative or adjuster for handling, a unique process begins. This process involves several integrated and interacting functions. The three primary functions are: investigation, evaluation and disposition.

Investigation

Gather all pertinent information and evidence:

Coverage

Bodily Injury

Property Damage

Legal Liability

Evaluation

Study and compare information and evidence gathered

Coverage

Bodily Injury

Property Damage

Legal Liability

Disposition

Pay the claim in full as presented

Pay a negotiated amount

Settle through litigation

Deny the claim

The objective of the investigation is to gather all the details about the accident or loss that pertain to the claim. The investigation provides the bases for interactions with all the other functions.

During the investigation, information and evidence are accumulated about the insurance coverage, bodily injury and/or property damage that resulted, and any legal liability of the insured, if that is an issue. By evidence, we mean anything furnishing proof which could be admitted in a court of law if it becomes necessary to use it in that way. Information, as used here, means any other facts and information about the claim.

As information and evidence are accumulated, they are analyzed and evaluated. Frequently, as the investigation progresses, information is acquired that generates a need for further investigation, sometimes in an unexplored area. Then as each new piece of information is acquired, it, too, is evaluated, measured and compared with the other facts. Obviously, the investigation must be thorough if one is to accomplish a fair, knowledgeable, and realistic evaluation and analysis.

When the company's liability for payment is established and the questions involving insurance coverage, bodily injury and property damage, and the insured's legal liability are clearly answered, then a proper decision can be made about how disposition is to be accomplished so the case can then be closed. The other functions are relied on heavily to determine the manner of disposition: payment in full, compromise settlement, denial, or some other form of disposition.

Claims are settled or disposed of in four basic ways:

Payment made in full as presented
Payment of a negotiated amount
Through litigation
Denial of the claim

A claim may be paid in full as presented when coverage is clearly established, eligible bodily injury or property damage clearly exists, the amount of such injury or damage has been established, and the insured's legal liability, if it is an issue, is clearly established.

Sometimes coverage, damages or legal liability remains unclear even after a thorough investigation and evaluation. For example, in a particular case, the amount of loss is not easily established, and the company and the claimant do not fully agree about what constitutes payment in full. In such a case, the company may decide to negotiate with the claimant (or his or her attorney) and to dispose of the claim by paying a negotiated amount. In reality, most bodily injury claims are negotiated.

The objective of the negotiation is to reach a settlement that is acceptable to both the claimant and the company. The facts that, were uncovered during the investigation provide the basis for the negotiation. This common method of settlement is frequently used because it saves time and can be very cost-effective.

Compromise is not always possible, nor desirable. Although insurance companies generally wish to avoid litigation, it may become necessary in order to conclude a claim.

A claimant has the right to reject an offer by the insurance company and take the case to court for its decision. So, despite your and the company's best efforts to reach a fair settlement, a claimant may decide to sue. On the other hand, the Insurance company may also choose to allow the claim to be disposed of through litigation rather than to pay a claim it does not owe or to pay more than it is obligated to pay.

While claim investigations lead to an amicable settlement, some claims are not paid for one of these reasons:

The facts obtained during the investigation clearly prove that the policy was not in force when the event in question occurred.

The bodily injury or property damage for which the claim was filed is excluded by the insurance contract.

There was no actual bodily injury or property damage sustained by the claimant.

The insured is not legally liable.

There is no claim. This is sometimes the decision of the court after trial. In other situations, while coverage exists and covered damages did occur, no claim for damages is ever made.

Acting in Good Faith

Policy conditions stating insureds' duties and responsibilities vary according to state laws and lines of insurance. Also, insurance company requirements may vary regarding certain duties of insureds, such as loss reporting procedures to be followed.

Common Duties Under Property Insurance Policies

Common Duties Under Liability Insurance

Web	www.iautoinfo.com