The Insurance Claims Process – The Great Unknown

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A company purchases insurance with the expectation that they won’t need it. When they do have to file a claim, they expect it to be handled smoothly. It is expected that legitimate claims will be paid and that bogus claims won’t. While most claims are dealt with without incident, there are some cases that we hear less about. Because these claims create the most sensationalism, it’s the more difficult claims that receive all the attention.

This article will focus on the claims process, specifically workers compensation, general liability auto, and property claims. In the interests of simplicity, I will focus only on workers’ compensation and automobile claims. It is important that you remember that no two claims will be the same and that every case has its own unique set of circumstances.

The central figure in any claim is the claims adjuster. They are responsible for applying the policy provisions to the claim and ensuring that it is resolved promptly and without prejudice. Each insurance company has a claim department that is highly specialized. Workers compensation claims are handled and auto claims handled by adjusters.

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Let’s look at a workers compensation case. First, the insured contacts the adjuster and provides all necessary information. The adjuster calls the injured employee to record his/her story. They also corroborate the story with any witnesses. If necessary, the adjuster will call the medical provider to assess the extent and severity of the injuries. The adjuster will next coordinate care and act between the injured employee as well as the insured. If the claim appears to be questionable, the adjuster will fight it as best they can. Usually, this is the point where an attorney has been hired by the injured worker.

You could have up to four people handling an automobile claim. You could have a front-line adjuster, an appraiser and a PIP adjuster depending on the extent of damage or injuries. The front line adjusters are responsible for acting as the quarterback and coordinating the claim with all other adjusters. In their area of expertise, the appraisers and adjusters have extensive training. Because fraudsters do exist, I mention this. I can assure you that if the claims appear fraudulent, they will notice and face severe consequences.

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In claims matters, speed is everything. The quicker an insurer receives a claim, the more efficiently the claim will be dealt with. Insurance companies want to contact the injured party as soon as possible. All claims should be reported by the insured, regardless of how small or insignificant they may seem. The insurer makes the decision about whether a claim is valid or not. It is not the insured’s responsibility to determine if the claim is legitimate. When a claim is made, it’s important that you read the policy provisions. Although it would be ideal to read the policy before a loss occurs I know that isn’t always the case. It also states that you must notify us immediately of any loss or damage. Not only is it smart to promptly report any claims, but it is also a requirement of your policy.

You must report all claims promptly and keep track of any expenses to protect the property. The insurer will expect that you minimize damage to your personal property if a tree falls onto your building. You could have your property moved to another place or the damage temporarily repaired until an adjuster can determine the extent of the damage.

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The job of the adjuster is to establish the reserve. A reserve is the likely ultimate exposure. The carrier’s expectation of paying for the claim is the reserve. The more information they have, the higher the reserve. You should be aware that reserves can change at any time. This is why it is important to keep track of your loss runs. Your agent should schedule (and attend) claims reviews with both you and the adjuster for difficult claims. This gives you an opportunity to ask questions and see how the claim is being handled.

We know that claims do happen. What you do when a case arises will determine the final payout. You must report all claims promptly. An agent and an insurance company that is competent will help you navigate the process and make sure it goes smoothly. Find someone who can.