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General Insurance Claim Procedures
by Timothy Dodge
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Notify the Insurance Company
The first step in the claim process is for the policyholder (known as "the insured") to notify the insurance company of the loss. The insured can contact her insurance agent, who will then notify the company. Alternatively, she may be able to notify the company directly; some companies have toll free phone numbers and websites set up for claim reporting. In either method, she will be expected to provide some basic information: When the loss occurred; the names and contact information of the people involved (if the loss was an accident involving another person); a description of what happened; whether anyone was injured; a description of any property that was damaged; and locations where the claim adjuster can inspect the damaged property.
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Investigation
After it receives the notice, the company will assign a claim adjuster to the claim. He will determine whether the insurance applies to the loss. If he concludes that the insurance does not apply, he will inform the insured of that and close the process. If he determines that the insurance does (or at least, might) apply, he will investigate further. He may inspect damaged property; interview the insured and any witnesses; and speak with physicians, contractors, mechanics or anyone else involved in treating injuries or repairing damage. If the injuries or damages are serious, he will work with the attorneys who will provide legal defense. In some circumstances, he may issue emergency checks to the insured if, for example, her home is unfit for her to stay in and she needs funds for temporary living arrangements.
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Coverage Decision
When the claim adjuster has gathered sufficient information, he will make a final determination as to whether coverage applies, if he was unable to make that determination earlier. If he concludes that coverage applies, he will develop an estimate of how much the company should pay for the loss. He will base this decision on appraisals if the loss involved a damaged car or home. If the loss involved injuries, he will make estimates based on medical reports, discussions with treating physicians, and the company's past experience with injuries of that type.
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Negotiation
At this point, the company is ready to make a settlement offer. For property damage, the offer will be for amounts to repair or replace the property. For injuries, the offer may include amounts for medical costs, any necessary therapy, lost wages, and possibly amounts to compensate the person for pain and suffering. The company may offer the injured person a choice between receiving a lump sum payment or a series of payments. The insured or injured person then has the choice of accepting the offer or rejecting it and asking for something different. Most insurance policies specify procedures for the insured and the company to follow in the event that they do not agree on a claim settlement, up to and including arbitration.
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Payment
When everyone has agreed on the settlement, the company will issue payments. These can go directly to the insured, to the repair shop or contractor doing the work, to health care providers, or to vendors. Once the company has made all agreed-on payments and the insured or injured person has signed a release, the claim adjuster closes the claim process.
