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The process of claiming is the final step in the procedure where you trade your financial stability for cash. Nonetheless, most people find this process to be too long and complicated.
The insurance company is a large bureaucratic structure. It has its compliance obligations and cannot just issue you a check based on your demand. There may be internal audit procedures and some delays because of small mistakes in documents or untimely submission of your application. To avoid unnecessary expenditures for your family, you need to prepare yourself.
1. Report Your Loss ASAP
The first hour is the most important one in the process. Almost all insurance policies obligate you to inform the company about any incidents happening in the required period. Delayed reporting may be the reason for claim denial.
The Critical Period: It is advisable to report car accidents and property damages within 24-48 hours after the event. In case of health insurance claims concerning non-emergency hospitalization, find out whether you need pre-authorization days before the procedure.
The Action Step: You can use the mobile app of your insurance company or its call center. Prepare your personal information, policy number, the time of occurrence, and description of the incident in advance.
2. Collect Visual and Written Proofs
There is no better way to prove your loss than taking pictures and gathering necessary documentation. At the first step, you should take as many photos as possible in order to show that you are entitled to compensation.
Take Photos: Take high-quality photos and videos of the damaged area with your phone camera. In case of car accidents, you should document the location of both cars, road signs, license plates, etc.
Get Police Reports: If you need to report your loss in case of auto theft, burglary, major car accident, or property damage, obtain a police report and its reference number. In case of health or life insurance, gather discharge summary, medical prescriptions, and diagnosis.
Obtain Witness’ Statements: In case you were involved in a car accident or suffered a slip-and-fall injury, get the contact information of witnesses. These statements may be useful later in case of liability challenge.
3. Understand Your Policy Requirements
Before you negotiate with an adjuster, spend 10 minutes reading the Declaration Page of your policy.
Here are the three things you should consider in order to set reasonable financial expectations:
Deductible: Remember that deductible is your responsibility. For instance, if your car got minor dents requiring $700 repair, and your deductible equals $1,000, claiming becomes meaningless. Repairing cost falls into the deductible and filing a claim means that you will be considered as a risky client.
Limits: Find out how much money the insurance company will pay for your loss. Personal property insurance provides sub-limits for expensive items. Auto insurance policy places limits on the amount of medical payments for each individual.
Exclusions: Find out whether the reason for your loss is included in the list of exclusions. Usually, flash floods are excluded from personal property insurance, unless you purchase a flood rider.
4. Perform Your Duty to Mitigate Damage
The most common mistake property owners do in the process of claiming is neglecting preventive actions. Once you have suffered a loss, you should try to decrease its consequences. This requirement is called the duty to mitigate losses.
5. Document Everything
While dealing with your insurer, you may communicate with different departments, such as customer service, specialized underwriters, restoration contractors, and insurance adjusters. Do not expect that the departments share information.
Create Claim File: Create your own file devoted to your claim.
Log Interactions: Each time you contact the insurance company, note the exact time of the call, representative’s name and ID, and his/her instructions or deadlines.
Send Follow-ups: After receiving the approval from the adjuster, send polite follow-up letters with the summary of your discussion. This measure will help you to create a timestamped record in case the agent leaves the company or suddenly forgets about your claim.
Final Tips: The Golden Rules of Successful Claims
The most effective way to settle your claim successfully is to combine speed with honesty. Do not overstate the value of your losses, repair estimates, or circumstances of the accident. Nowadays, insurance companies employ advanced investigation tools in order to check client’s claims. If your misrepresentation will be detected, your claim will be denied, and you will be subject to legal proceedings.
Being polite, well-prepared, and organized, providing clear documentation, and meeting deadlines precisely is the key to success. Acting professionally, you will easily overcome bureaucracy, maximize your payout, and return to your normal life.
Frequently Asked Questions (FAQ)
Q: What is the role of an insurance adjuster?
A: An insurance adjuster is an investigator hired by your insurer for handling your claim. His/her duties involve evaluation of all evidences, inspection of the property/vehicle, verification of the claim, comparing it with the requirements of your policy booklet, calculating payout, etc.
Q: Should I get my own repair estimate before visiting an adjuster?
A: Yes, you should get your own independent estimate. With this estimate, you will know the size of the payout suggested by your insurer and notice critical details missed by the adjuster.
Q: What should I do if my claim is denied unjustly?
A: First, you should obtain a letter of denial containing the exact page, section, and paragraph of your policy booklet which was used by the insurance company as grounds of rejection. If you think that your claim was denied unjustly, you have the right to appeal this decision to the claims management department of your company. You can also submit a complaint to your state’s Department of Insurance or hire a public adjuster.
Q: Will my premium increase due to my claim?
A: It depends on the type of insurance and the party at fault. For example, if you have a valid claim and you were not at fault, many states oblige insurers to refrain from raising premiums. But multiple collision claims and frequent property maintenance claims raise your rates.