11 - Valid Claims and claims settlement Flashcards
Under claims what does it mean by the onus of proof rests on the insured
It is the insureds responsibility to prove that they have a valid claim
What two ways can the insured prove that they have had a valid claim
- That an insured peril arose (The insured must prove that they have suffered a loss directly caused by the insured peril; usually in a completed claim form)
- That they have suffered a financial loss - show a receipt etc
If the insurer wants to void the claim their responsibilities are to prove that:
- The cover was in force at the time of the loss
- The insured is that named in the policy
- The peril is covered
- The insured has taken reasonable steps to minimise the loss
- All conditions and warranties have been complied with
- The duty of fair presentation has not been breached
- No exceptions are appropriate
- The value of the loss is reasonable
What three policy terms means that a claim may only be partially met
- The sum insured (re property Ins) or limit of liability (liability ins) limiting the maximum amount recoverable. If the loss is greater than this sum or limit, the insured’s recovery is limited to this sum
- Operation of the average clause (the insurer may apply average to under-insured claims)
- Excesses
What does ex gratia payments mean
They are made out of favour
What happens if an insurer makes an ex gratia payment
It acquires no subrogation rights
Nie nabywa prawa subrogacji
What are the implied duties of the insured after a loss
Should act as though uninsured and take all reasonable steps to minimise the loss
May be required to advise authorities (fire service over fires)
Must take all steps to prevent the loss from spreading
Must not hinder the insurer in the claims investigation process
What is the notification condition.
It sets out the duties of the insured on the happening of the event insured against
MSZ- Some require the insured to notify the insurer asap after the event that is likely to lead to a claim. The notification can be in writing, sometimes telephone or by calling the local branch office); could be also done digitally;
What are the 4 basics of the notification condition
Prompt notification to the insurer
Involvement of the police
Reasonable prevention of further damage
Proof and details of loss in writing
What are the purposes of a claim form
Establish whether the insured is entitled to indemnity under the policy
Provide sufficient info
Enable the insurer to take a view to the severity
Enable to insurer to take a preliminary view whether a third party can claim
Enable to the insurer to consider whether any potential recovery rights can exist
Why is a motor claim form called an accident report form
It is a condition for the insured to report any incident regardless if they are going to make a claim.
What is the typical contents of a property claim form
- Description of the property damaged
- Date, cause, circumstance and monetary amount of loss
- Situation and occupancy of the premises
- Capacity in which the insured is claiming
- Whether any other person is interested in the property loss or damage
- Whether there is other insurance in force
What is the typical contents of a motor accident claim form
- Details of the insured
- Date and time of the accident
- Vehicle involved
- Who was driving
- Details of the accident
- Other parties involved, etc.
- Any witnesses
How can claim apps help the insured
Help to make a claim by using helpful step by step guide
Giving all phone numbers at hand
Allowing them to send claim details straight to the insurer
What are the 3 things an app can help with in regards to a motor accident
- Use GPS to show the insurer exactly where the claim occurred
- Upload photos of any damage
- Take down the name and address of anyone who saw it happen
What two things can a household claim app do
- Keep copies or receipts and warranties for valuables
2. Phone camera to show damage to their home and belongings
What is the supporting evidence required for theft claims
Compare details of the property stolen
What is the supporting evidence required for accident claims
May be desirable to obtain an engineers report, scale plans and photographs or accident book
What is the supporting evidence required for personal and accident claims
Medical evidence
What is the supporting evidence required for motor claims
A vehicle registration document
What is a loss adjuster
An independent and professionally qualified expert in processing claims from start to finish.
Loss adjuster completes a claim report, providing detailed comments on the incident leading to the claim and recommends to the insurers what settlement should apply.
What does a loss adjuster do
Checks that the cover was in force and was adequate at the time of the loss
Provides estimates of the potential loss
Completes a claim report
What is a claims contribution
Where the insurer has the right to call on other insurers similarly but not necessarily equally to share the loss of a payment
What is the typical base formula for contribution
Sum insured by individual insurer divided by total sums insured x loss
How is average worked out
Sum insured divided by value at risk x loss
Can average apply to liability policies
No because there is no chosen limit of indemnity
What is subrogation
Where there are third parties involved who were the cause of the loss of damage insurers can put pursue these to recover monies lost
What is arbitration
The arbitration clause deals with disputes which arise as to the amount paid in settlement of a claim
What happens under the Civil Procedure Rules
Courts are under a duty to encourage the parties to use an alternative resolution procedure
What are the benefits of an alternative dispute resolution
Speed of completion
Can be timed to suit the parties
Less costly than a court trial
Settlements are confidential
What is meant by mediation alternative disputes resolution
Where the parties choose to participate and any agreement reached to settle the dispute is made solely by the parties themselves
The mediator acts as a facilitator and helps the two parties reach a decision
What is a conciliation alternative disputes resolution
It’s similar to mediation except the conciliator leads the parties to a settlement
The parties have to agree they are bound by the conciliation recommendations
What are the 3 stated purposes of the ABI personal effect contribution agreement
- Avoid adverse publicity and criticism of the insurance industry cause by insurers
- Avoid costly and time consuming handling of payment of part or all of the claim
- Sets out rules for contribution between participating insurers
What are the contribution rules for motor accidents
No contribution
What is the contribution rules for specified items
Generally no contribution
What is a bilateral agreement
Insurers are entering into bilateral agreements with others who operate in the same market.
e.g. the motor insurance subrogation portal
Goes on a subrogation portal and it helps reduce time getting claims recovered from other insurers
What is the uninsured drivers agreement
It exists to deal with a situation where cover is not in place to provide compensation where a third party is concerned
Step up to settle the damages to third parties for personal injury’s
What is the untraced drivers agreement
Covers ‘hit and run’ cases, where the motorist involved in the accident cannot be traced.
When will the MIB pay out on untraced drivers agreement?
Where damage has been made to third-party property.
Or significant personal injury to the same accident subject to death. Or 4 or more days of consecutive hospital treatment
What is the untraced drivers agreement 2017
There’s no exclusion for vehicle damage claims where the vehicle was insured
There is an excess on property damage of £400
The claimant is required to report the accident to the police
Interest in general damages runs from the date of the accident
What happens if payment for a claim is paid by money
Requires a form of discharge to completed by the recipient to confirm they have received the payment
Who can pay for repairs
Insurers can pay for the cost of repairs directly to the repairers
What is the third parties act 2010
Under the act a third party doesn’t need to first obtain judgement against the insured before issuing a claim but the liability of the insured to the third party must be established
What is the document request under the third parties insurers act 2010
Enhances third parties with a right to request insurance info from insurers provided they can show a reasonable belief that liability is owned by an insured
What is the Enterprise Act 2016
It requires insurers to pay sums due following a claim within a reasonable time. It gives policyholders the right to claim damages if a unreasonable delay causes additional costs
Accuracy of the reserving process is crucial because
Insurers are required to submit financial statements each year to the PRA (Prudential Regulation Authority)
May have an impact on premium rates
It’s important element of its liability is adequately estimated for the profitability of an insurer
How do insurers determine a claim reserve
Examination of past data on claims
What is meant by right of recovery under claims
The insurer has a certain rights following an incident which gives a rise to a claim. One of these rights is the recovery or stolen of lost property.
If fraud is committed does an insurer have to pay a claim
No liability to pay that claim And any payment already made can be recovered
What three bodies are used for fraud prevention
The Insurance Fraud Bureau
- not for profit organisation funded by the insurance industry
The Insurance Fraud Investigators Group
The Insurance Fraud Register
What measures are undertaken to detected fraud within the insurance industry
Claims and underwriting exchange- insurers submit details for individual claimants to check history
Art loss register - deals with stolen art
Motor insurance anti fraud and theft register
Claims handler
How soon just the MID update vehicle details
Seven days for private car risks
14 days for commercial
What are the 5 other possible Indicators of fraudulent claims
- Too much documentation
- Insured changes their story
- Loss was not reported to the police
- Claim is not consistent with the insured lifestyle
- Poor claims history
What is the consequence of fraud in the insurer
Claims costs can rise which increases premiums which means less competitive
What are the consequences of fraud on the insureds
Premiums will increase
