Planning Can Reduce Stress of Insurance Claims

You’ve probably read articles on how to avoid claims, how to buy the correct insurance to protect yourself from various perils, and numerous other insurance topics. Unfortunately, if you don’t take action based on what you’ve learned from these articles before you have an issue, they won’t be able to help you after a loss occurs and you’re dealing with the adjuster to make sure your claim is paid in a fair and timely manner.

Just as you plan ahead to have the proper coverages in place in the event you experience an insurable loss, you also should plan ahead to help take some of the stress out of the claims-handling process.

The first thing you should do is read the conditions of your policy. In addition, here are some basic steps you can take to help make your claims experience run smoothly and ease your stress level at the same time:

Notify police if a law has been broken. Whether you experience a theft, vandalism, employee dishonesty loss, or others where the perpetrator is guilty of a criminal act, you are required by the terms of your policy to notify the police as soon as you discover the loss. This will allow the police opportunity not only to catch the person or people involved but may lead to the recovery of your property. Most of all, if your policy includes the peril which resulted in the damages, it is a requirement of the policy to notify the police in order for the loss to be paid.

Give prompt notice of a claim to the insurance company. This means you need to contact your agent or report directly to your company claims office that you have experienced a loss. Include a description of any property damaged and all details of how, when and where the loss occurred. The quicker this is done the more accurate the information seems to be, as details are sometimes forgotten if there is a lapse in time between the event and the report.

Protect your property from further damage. There is an exclusion in most policies that states, “Coverage does not apply if due to neglect of an insured to use all reasonable means to save and preserve property from further damage at and after the time of loss.” This means to board up any openings or cover them with tarps. Move the property to a safe location if possible, etc. Be sure to keep a record of the expenses you incur in making temporary repairs as they should be reimbursable under the terms of your insurance policy. No receipts can mean no recovery.

Keep damaged property for examination. The policy allows the insurance company to inspect damaged property, proving the loss or damage.

Make a complete inventory of damaged and undamaged property, including quantities, costs, values and amount of loss claimed. Below you will find some suggestions on how to make this easier by planning ahead.

Have your books and records up to date. Remember, the insurance company will have the right to examine not only the damaged property but your books and records to test and analyze damaged and undamaged property to allow the company the privilege of determining the cause of the damage. The company may even want to make a copy of your books and records to complete the documentation in its files.

Sign a sworn proof of loss and include it with all requested information to investigate the claim. You will have only 60 days to return this to the insurance company. Of course, it goes without saying that you will be expected to cooperate with the insurance company during an investigation or settlement of the claim.

Make every effort to return to your normal operations as soon as possible to reduce any loss of income or extra expense that you may incur as a result of the claim.

Assume no obligation or try to settle a claim by payment without the approval of the insurance company. If you do, you will run the risk of not being able to recover your out-of-pocket expenses incurred without company approval, as the company could still be held responsible for other damages as a result of the event.

If you receive any legal demands or suit papers, get these to your agent or directly to the company immediately. Most of these documents are time sensitive and require a written response. Should you not forward the papers to the insurance company in time for them to make an appearance or respond on your behalf, the court has the option to enter a summary judgment wherein you are obligated to pay whatever the court finds is due to the adversarial party.

To avoid a claims frequency problem with your insurance company, you may have been told by your agent that it is sometimes appropriate to pay damages from a loss, even when it is covered by the terms of your insurance policy. This may be true when there is damage to your own property and the amount of the loss is only somewhat more than your deductible.

However, anytime there is an incident and there is a possibility of bodily injury to others, you certainly need to make your insurance agent/company aware of the event. If you do not report the incident you may risk the