What exactly is an insurance claim?
A loss occurs when the holder of an insurance policy suffers a sudden and unexpected financial loss. Following a loss, the policyholder can request that their insurance company compensate them for their losses. This is referred to as a claim.
The goal of insurance is to return the insured to the same financial situation they were in prior to the loss. This is referred to as indemnification. If the loss is caused by an event covered by the insurance policy, the insurer will indemnify the insured; they will pay for the covered value of the loss, no more and no less (as long as it is within the limits of the insurance policy).
When a loss is suffered, the insurance company is expected to compensate the policyholder. However, coverage is always limited to the terms of the insurance policy. The insurer will investigate your claim to determine whether the event or circumstances are covered by the policy.
You must provide proof that the claim is genuine, and the insurer must be satisfied that the claim meets the terms and conditions of your insurance policy. If your claim is accepted, the benefit or payout is the replacement or repair of your property or any payment made by the insurer.
The insurer will assess the claim’s value and provide the appropriate benefit as specified in your insurance contract. That may also be done through an adjuster assigned by the insurer where the insured claims are handled by adjusters on behalf of the insurer.
Steps in making your claim
Making a claim is usually simple and quick if you are well prepared and organized, and you have all of the information that the insurance company requires.
The first step is to contact your insurance company as soon as possible after the event, especially if the loss was caused by theft or a serious accident.
You may wish to review the Product Disclosure Statement for your insurance policy to ensure that you have a valid claim and that the event is not listed on the policy’s exclusions. Your insurer will do this regardless if you file a claim.
You can make your claim move much more quickly if you take an organized, step-by-step approach.
Before the claim:
1. Ensure your safety first.
Accidents can be extremely dangerous, so it’s critical to follow the advice of emergency services authorities regarding access to your car or building and the surrounding area. Do not try to enter if your property is unsafe. Above all, ensure that you and your family are always safe.
2. Make a police report.
If you are ever a victim of a crime such as theft, vandalism, malicious acts, or a serious accident (such as one in which a person is injured or a tow truck is required), call the police as soon as possible and keep the incident number they give you.
Follow any instructions the police give you and provide them with as much information about what happened as possible. A police report will be filed for any serious incident. Request that the police officer with whom you are dealing provide you with the police report number. This must be included in your insurance claim.
3. Examine your Product Disclosure Statement (PDS).
You may want to go over your insurance policy’s Product Disclosure Statement (PDS) and policy schedule to see if you have a valid claim and that the event is not on the list of exclusions. If you file a claim, your insurer will do it anyway. You can now check the amount of excess you may have to pay.
1. Contact your insurance company.
If you need to make a claim, contact your insurer or broker as soon as possible and have as much information as possible. Even if you don’t know the full extent of your property’s damage, making contact is critical to starting the claims process.
Some insurance claims can be made over the phone without the need to fill out a form, allowing the claim to be processed immediately.
However, for the majority of claims, you will need to fill out a form. You can call your insurer and request a form, or you may be able to fill out the appropriate form on the company’s website or download it.
2. Reduce your loss.
You can protect your property by making temporary repairs or removing undamaged possessions if it is safe to do so. After being photographed, damaged or soiled items that may pose a health risk can be moved to a safe area or disposed of, but check with your insurer first.
3. Produce evidence and maintain a written record.
You must provide sufficient evidence to demonstrate the validity of your claim.
Begin by outlining your own version of what occurred. You should do this immediately following the incident because it is easy to forget the minor details of what occurred.
Certain documents and evidence may be requested by insurers to prove what has been lost or damaged or a potential liability. The amount of evidence required will be determined by the nature and value of the claim. If you do not provide sufficient proof of loss or damage and ownership to your insurer, it may request additional information.
The following documents may be requested by your insurer to prove damage or loss, evidence of ownership, or the value of items:
- Original invoices
- Authentic police reports
- Reports on valuation
- Medical documentation
- Make, model, and serial numbers of the product
- Photographs or videos of real estate or items, as well as the event itself
Your insurer may also request that you keep all damaged items for inspection if necessary, unless they pose a health risk (for instance, furnishings after a flood). Some damaged items may also be repairable.
Keep all paperwork, notes, and supporting materials in a folder or notebook, such as contact information for any witnesses or receipts for lost or damaged items.
Taking photographs or videos for your own records can be extremely beneficial. They can help provide details about what happened, and in a complicated claim, they may be required as supporting evidence.
4. Cooperate with the insurer’s adjuster.
An adjuster will be involved in the majority of large claims. Their job is to investigate your situation, your loss, and its monetary value. They will then notify your insurance company, which will decide on your claim. In some cases, your insurer may seek the assistance of engineers, tradespeople, or other experts. All of this is to determine how the claim will be handled.
5. Repairs, replacement, and monetary settlements
Processes differ from insurer to insurer, but in general, once quotes and scopes of work have been agreed upon, start dates can be agreed upon with the necessary tradespeople. At this point, you can negotiate a cash settlement with your insurer.
6. Payment of your claim
Insurance companies are expected to promptly evaluate all claims and pay out all claims that are covered by their policies. Insurance companies are required by the General Insurance Code of Practice to respond to your claim within 10 business days and inform you whether they will accept or deny your claim based on the information you have provided.
Why your insurance claim may be denied?
Insurance claims may be denied for a variety of reasons. Among these reasons are, but are not limited to:
- The claimant’s monthly premiums have not been paid, and they are behind.
- The policy could be inactive.
- Another insurance company could have agreed to pay for the damages listed in the insurance claim. This is common in car accidents where one of the parties is blamed for the accident.
- Failure to meet the conditions that are covered because most insurance policies specify which areas qualify for benefits.
- Your insurance company has the right to withhold payment if the damage or accident claim was caused by an unavoidable “Act of God” or carelessness.