Anatomy of Claims Process

The process of filing an insurance claim is a new experience for many policyholders. Believe it or not, there are many people who have never gone through the process and haven’t a clue of the steps that should be taken. The claims process is similar for every type of property and casualty insurance claim—whether it is for homeowners, vehicle owners, or business owners.

 

Should You Even File a Claim?

 

Typically, every property and casualty insurance policy contains a deductible that you selected when you purchased your coverage. Depending on your deductible, it may not be wise to file a claim even if you feel you are covered for the loss. For example, if your personal auto insurance has a $1,000 comprehensive deductible and you have a cracked windshield, your cost to replace the windshield will be less than the deductible, so there is no need to file a claim. Most policyholders do not realize that a claim can be charged against you even if nothing was paid out. The claim will become part of your “loss history” which is used to rate future policies even though nothing was paid.

 

First Notice of Loss

 

First Notice of Loss (FNOL) is a term used in the insurance industry. It is the recorded time that you report a claim, not the actual time of the event. The purpose of recording the FNOL has to do with the policyholder’s “duty to report” requirements in the insurance contract. If you feel you have a claim that should be reported, call your agent or broker and get some advice on whether your claim might be covered and if it’s worthwhile to report it. Although your agent/broker will have very little to do with the claim, their advice on how to go about reporting it to your insurer will be very useful. After you have spoken with your agent/broker, call the claims department and report the event to the representative. Make certain you get the following information:

 

  • Name and contact information for the claim manager assigned to your claim.
  • Your assigned claim number (this will always be referenced in future correspondence)
  • Name and contact information for the adjuster assigned to the claim.
  • Appointment information for the adjuster to complete the inspection or interview.
  • If available, take advantage of having your claim payments directly deposited to your account.
  • If, for some reason, you cannot be available to meet with the adjuster, always contact him or her to reschedule the inspection.

 

Your Payment for Losses

 

This part of the process is where things can become confusing for most policyholders. In many cases, there will be several coverages that come into play when the claim is being settled and in some cases, an adjuster for each coverage is assigned. For example, suppose that you have fire loss to your home and are required to rent another location while your home is under repair. You will have a claim against your “Dwelling Coverage” and a claim against your “Loss of Use” coverage. This can be confusing because you will receive separate settlement checks at different times because your home repair costs can be figured in advance, but your loss of use expenses aren’t always determined until after you have return to your home. Also, if you have a third party to your insurance contract (usually a lender), your claim payment will typically be made payable to you and the third party.
Finally, if you do not feel that you are receiving the reimbursement for damages according to your contract, you may want to attempt to negotiate with your insurer. Many times their first offer is a “first offer” and can fall short of making you whole again. However, by all means, if you feel you are being treated unfairly, it may be wise to hire a public adjuster to represent your interests during the payment negotiations.

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