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2019 3rd Edition (Other Editions)

Claiming Insurance

Some may think that the claim process is complicated as many supporting documents are required from them. However, this requirement is to ensure fairness for all policyholders. In fact, the advent of technology makes the claim process more convenient. You may consult your insurance agent for details.

Working Principles of an Insurance Claim

Insurance is a contractual arrangement between the insurance company and the policyholder against financial loss. Common types of insurance are life, health, auto, and travel insurance. When an accident occurred or damage is incurred, the policyholder could make a claim to the insurance company and indemnify against the loss.

The payment of claims comes from the premium. The insurance company would serve as a caretaker of the premium received from the policyholder, the money is pooled and the claims are paid out of it. Thus, the losses and expenses are shared among people in the same pool.

Examination of the Insurance Policy

As the claim process might differ according to the types of insurance policy, the policyholder should examine the policy carefully. The policyholder has to know the coverage of the policy and whether the current damage is covered. Also, the policyholder has to claim within the applicable timeframe. Once the mishap happens, the policyholder needs to contact the insurance company as soon as possible and the insurance company would tell what information has to be provided and the form that has to be filled in. Hence, the policyholder has to examine the insurance policy closely and seek help from professional insurance agent to make the claim process smoother.

Responsibilities on the Policyholder

The policyholder has the onus to prove the losses by giving evidence to the insurance company. Therefore, to facilitate the smooth claiming process, the policyholder has to keep records of all relevant expenses and information. In case of an accident, it would be helpful to have testimonies from the witnesses.

As the insurance company would assess the claim with reliance on the disclosures and representations made by the policyholder, the policyholder should be honest about the information provided. They also need to make full disclosure of all relevant and important information so that the insurance company would be fully informed of the risks and make suitable assessments accordingly.

As the insurance company would pay the claim with money from the pool, paying for unnecessary claims would be unfair to other policyholders who paid. Thus, disclosing everything in utmost good faith during and after application could be beneficial to both policyholders and insurance companies in the claim process.

Responsibilities on the Insurance Companies

Apart from the policyholders, the insurance companies should perform their duties in utmost good faith and fair manner. The insurance company should provide the services to the policyholder promptly and keep communicating with the policyholder regarding the claim. Also, the insurance company has to investigate the claim within a reasonable time. The settlement of claims should be prompt, fair and equitable.

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