General Claim Procedure

Some important points, which would help you in the claims procedure

  • The loss or damage should be reported to the insurer immediately.
  • On receipt of claim intimation, the insurer will forward a claim form.
  • Submit the completed claim form along with an estimate of the loss to the insurer. It is preferable to submit an itemized estimate with separate values.
  • The insurer will arrange for inspection of the damaged items to assess the loss. In case of major losses, a specialist-licensed surveyor is deputed.
  • The insured has to provide the required documents to substantiate the extent of loss.
  • In case the cause of loss is not established, it is for the insured to prove that the loss or damage has occurred due to an insured peril.
  • On agreement of claim amount between the insured and the insurer, the claim is settled.

Claims under Fire

  • Firstly the insured should take all possible steps to minimize the loss.
  • The fire brigade may be intimated immediately.
  • Lodge a police complaint in case of a fire arising out of - rioting mob, striking workers, malicious damage by third parties or terrorist damage.
  • Inform insurer as early as possible , in no case later than 24 hours
  • To co-operate with the surveyor appointed by the insurer by relevant information.
  • If the policy is on 'reinstatement basis', the claim is settled only after completion of repairs/replacement of the damaged items and submission of bills for claim payment.

Burglary Claims / Money Insurance

  • Immediately report to the police and obtain a non-traceable certificate that the items are not found.
  • Notify insurer as early as possible.
  • The insurers will insist upon a letter of undertaking on a stamp paper of appropriate value - letter of Subrogation, for refunding the claim amount when the stolen property is recovered.
  • Obtain a final report from Police
  • Insured has to provide the surveyor complete book of accounts and bills substantiating the loss on the day of incidence.

Machinery Breakdown

  • Immediate notification to the insurer
  • Notice of claim and estimated cost of repairs should be filed with the insurers to arrange for inspection.
  • In case of partial losses, no depreciation is charged but when the items are not insured for its present day replacement value, the items are treated as underinsured and the claim amount is proportionately reduced.
  • Depreciation is only applied for Total Loss claims.
  • If an appliance is partially damaged, it should be repaired (on approval from insurance company) before it is put to use, as otherwise further loss is not covered.

Electronic Equipments

  • Immediate notification to the insurer.
  • Notice of claim and estimated cost of repairs should be filed with the insurers to arrange for inspection.
  • In case of partial losses, no depreciation is charged but when the items are not insured for its present day replacement value, the items are treated as underinsured and the claim amount is proportionately reduced. Depreciation is only applied for Total Loss claims.
  • If an appliance is partially damaged, it should be repaired (on approval from insurance company) before it is put to use, as otherwise further loss is not covered.

Travel Sure

  • The claim procedure varies from country to country and therefore the insured should get in touch with the overseas claim settling agents of the insurers immediately.
  • The Insured should carry the policy document with him, which may be produced as evidence if necessary. The policy document also contains the full information as to how to get in touch with the claim settling agents for assistance.

Motor vehicle claims

  • Notice of an accident involving third parties should be reported to the insurers.
  • The insured may be interested to pay compensation without going into whether he is liable to pay or not. It is therefore an express condition of the policy that no claim should be admitted or a compromise arrived at, without the approval of the insurers.

Claims under Comprehensive policies

Steps to be taken in case of an accident:

  • Notice of accident should be filed with the insurers.
  • If damage is a major one, the accident may be reported before the vehicle is removed from the spot so that the insurers can arrange for spot inspection of damage.
  • The vehicle may then be moved to a workshop, preferably to authorized workshop, for estimation of repair charges.
  • On receipt of completed claim form and estimate of repairs the insurers will arrange detailed inspection of damage and cost of repairs will be ascertained.
  • The insurers will ensure that a person duly licensed drove the vehicle at the time of accident and that the vehicle is the one insured in their books. To that end, they will verify the Registration Certificate and the Driving license of the driver who drove at the time of the accident.
  • Upon completion of the above procedure, the repairers will be authorized to carry out repairs. The insurer may undertake to settle the repair bills directly with the garage or reimburse the insured.
  • Insurers would like to collect the damaged parts for which replacements have been allowed, as salvage. To ensure that replacements with new parts, have in fact, been effected.
  • In case of theft of the car or its accessories, it has to be reported to the police and final report should be submitted.

Glossary

Claim and Loss:

A claim is a request for an amount to be reimbursed filed by insured and addressed to the insurer.

Loss is the occurrence of an insured event, such as a fire, which results in financial disadvantage for the insured.

Claim parties

  • The First party is the person/ company insured.
  • The Second party is the specific insurance company.
  • The Third party refers to anyone else who is involved in a loss event. It may be vehicle owners, property owners or persons such as passengers or pedestrians

Indemnity

Indemnity means, to save from loss or harm. Insurance policies are contracts of indemnity which means that insurance companies intend to provide financial compensation for a loss which the insured has suffered and put them in the same position after the loss as they enjoyed immediately before it.

Reinstatement

In policies issued on Reinstatement basis, the insurers will pay a sum equivalent to the cost of rebuilding or replacing the property to a condition like new but not better or more extensive than new.

Catastrophe

Defined by Swiss Re as an occurrence which claims more than 20 lives; badly injures more than 50 people, make more than 2000 people homeless or cause insured damage of over $29M or a total loss of over $ 457M.It includes natural risks like floods, storms, earthquakes, droughts, bush fires and cold weather.

Outstanding claim reserve

This reserve covers claims that have been incurred and reported to the insurer. It is the estimated liability in respect of these claims.

Incurred but not reported reserve

This reserve covers claims that have been incurred but not yet reported to the company. This reserve is calculated by using statistical techniques based upon the past experience.

Insurable Interest

Every person should have legal & financial interest in the subject matter to be insured. Any person insuring the property in which he does not have insurable interest would increase moral hazard.

Utmost good faith (Uberrima fides)

In simple terms it means that the insurer and the insured have a duty to deal honestly and openly with each other in the negotiations that lead up to the formation of the insurance contract. Parties have the duty

  • Not to misrepresent any matter relating to insurance i.e. to tell the truth
  • To disclose all material facts relating to contract i.e. not to conceal anything.

Material facts

Every circumstance is material which would the judgment of a prudent insurer in fixing the premium or determining whether he will take the risk.

Burden of proof

Burden of proving the loss remains with the insured, he must establish two things:

  • That the loss was caused by the operation of an insured peril
  • The amount of loss

Proximate cause

It is describe as the active, direct, immediate, dominant, operative or efficient cause of the loss. In simple words it is the main and most powerful cause of loss.

Average Clause

An average clause provides that where the sum insured is less than full value, the insured will bear the uninsured part of the risk and the claim payment for any loss will be scaled down proportionately. This clause is also called pro rata average clause.

Excess (or deductible)

It provides that the insured must bear the first amount of any loss, expressed either as a sum of money or a percentage of the loss. Excess could be voluntary or compulsory.

Subrogation

It is the right of insurance company, having paid the loss under the policy, to stand in the place of insured and purse legal right or claim against other persons for the same loss.

Salvage:

The right of the insurer to take over the subject matter after partial or total loss is known as salvage.

Contribution

Contribution prevents the insured from making a profit from his loss. It is the right of the insurer to call upon other insurance companies not necessarily equally liable to the same insured to share the cost of claim payment. Contribution will arise only when the following conditions are satisfied:

  • Two or more policies of indemnity exist
  • Each insures the subject matter of the loss
  • Each insures the peril which brings about the loss
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