Insurance Claims – Notify the Insurance Company!

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It seems pretty obvious, doesn’t it? There are many ways to inform the company you have suffered a loss. It can make a huge difference in the way your claim is processed.

Your policy is the best place to start looking for information. Most policies will include a phone number for reporting a claim. But, I have seen policies that require policyholders to notify the company in writing. Make sure the company is comfortable with the way you report your claim. Most likely, your agent’s name and phone number are listed on the policy. Call him to report the loss.

Sometimes an agent may have the settlement authority to manage small losses such as homeowners’ losses below $2,000.00. The agent may be able to handle your claim in this instance. This situation is rare though, I have found it to be uncommon. Sometimes, captive agents (agents who work for one company like Allstate, Nationwide, or Liberty Mutual) may have limited settlement authority.

First, remember that an agent must be licensed by his state’s Department of Insurance to practice as such. A separate license is required for claims adjusters. Agents can’t adjust claims. This is a violation to insurance regulations. Agents are not allowed to adjust your claim. However, they can help you find the right coverage for you. If you have any problems with your claim, agents can help by calling you on your behalf. Agents can help you locate key numbers and contact information for the insurance company personnel handling your claim. It can be helpful for the agent to call you if he has many policyholders at that company and his clients represent a high amount of premium to the insurance company.

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It’s all about customer service and keeping promises in an insurance policy.

Sometimes the agent, or an office secretary/customer support representative, will fill out a claim type (called an ACORD form) and submit it to the insurance company. The claim form will often be submitted electronically by the agent in this age of the Internet.

Ask the agent to send you the completed form if the agent notifies your company. You’ll then be able to verify that the claim has been submitted and the date it was submitted.

Often, however, an agent will need to refer you the the claims department of your insurance company. You may find instructions on how to file a claim and a phone number for the claims department on your policy.

After you have filed a claim, your policy requires that you notify the insurance company in a timely fashion. What does it mean to be timely? It can vary from policy to policy. Each state has its own statutes of limitations that limit how long a claim can be filed after a claim has been made. To find out the statute of limitations in your area, or where the loss occurred, check with the Department of Insurance. The Appendix contains a listing of all the Insurance Departments in all 50 U.S. States and their phone numbers. You can also find the website address.

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You might live in Minnesota and have a Florida retirement home. A hurricane strikes the Florida house. Florida’s statutes would apply.

WARNING Do not wait to notify your insurance company more than one month after you lose it. They will immediately suspect that you are being suspicious. You should expect to be provided with one of these forms by the insurance company prior to them commencing their investigation.

Non-Waiver Agreement. The non-waiver agreement states that the insurance company will conduct a thorough investigation into the claim but does not make them obligated to pay it. The policy states that they have not waived any rights and the insured has not agreed to cooperate with the investigation. This form is required by the insurance company. If the insured refuses to sign this form, the insurance company will send him …..

Letter of Reservation of Rights. This letter is essentially the same as a Non-Waiver Agreement but the insured does not need to sign it.

In your claim journal, write down the date, time, phone number, and what was said about your claim. If you have any problems with your claim, this information may prove to be extremely valuable.

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Most likely, the company will issue a claim number to you when you report your loss. Note the claim number in your journal! You shouldn’t expect your insurance company to send you a claim number-printed form immediately. Sometimes it can take several days for the claims department to send you correspondence. You will likely need a conversation with them before that happens.

WARNING What if someone else is at fault and you are making a claim against their insurance company? This could be in an auto accident or if someone damages your home or contents. Even in this situation, you need to notify your insurance company about any claim.

Third party claims can sometimes not work out for claimants. Sometimes, the insurance company of another person denies liability or denies coverage. Sometimes the insurance company of the other party drags out the process. Sometimes the insurance company of the other party offers a settlement far below the fair value. You may not get paid for your financial loss after a few months.

What happens if someone in your family is hurt in the claim…and that the other guy’s insurer refuses to accept liability?

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These things can happen weeks or even months after a loss. You can often shorten the process by filing a claim against your insurance policy to fix the damage. Your insurance company will then do what is called “Subrogation”. They will then pay your claim and contact the insurance company of the other party to demand reimbursement.

If you fail to report your claim immediately, your policy could allow the insurance company to deny your claim due to late reporting.

Your policy also requires you to notify your insurance company immediately after you lose any property covered by it. This requirement applies regardless of who caused the damage.

This technicality is not something you should get into! Notify your insurance company so you don’t lose the right to collect what is due to you.