Chapter 4 - Claims Handling Procedures And Related Services Flashcards
Process for private motor - cars and bike
Insured must report ALL accidents
Generally have to compete an accident report form
Repairs generally carried out by insurers own repairer
Third party may claim for damage to their vehicle/property
If customer has non comprehensive cover they must still report the accident but the insurer will take no further action for damage to their own vehicle as not covered for this. If insured has comprehensive cover and has a claim against a liable third party their insurer would surrogate on their behalf to recover.
Process for health claims - personal accident and sickness
Benefit policies- don’t indemnify
Insurers will check a valid contact is in force and will need supporting evidence including things like a death certificate, proof of lost limbs, medical certificates depending on circumstances.
HH process- buildings and contents
Contents split into durable contents (furniture, fridge, freezer) and consumer goods (things that wear out more quickly like curtains, towels and clothing).
Durable goods - settled on a new for old basis
Consumer goods - settled on new for old basis less wear and tear
Buildings - main settlement is repair/reinstatement at the time of loss less an allowance for betterment
Travel process
Process depends on which section of the policy the claim is covered.
Personal accident/sickness - considerations that apply to health claims generally apply
Travel interruption- insurer will make enquires with travel authorities
Medical expenses - usually authorised prior treatment to ensure costs are reasonable
Baggage - insurer will request proof of purchase for items and check loss has been reported to relevant people
Extended warranties process
Settlement will generally result in appliance being repaired or replaced.
As there is no cash incentive to be gained fraud is less common.
Pet process 🐕
Typical policy covers vets fees required followed accidental injury or illness as well as theft, boarding fees and even euthanasia 😫
For dogs policy can be extended to cover liability caused by the animal such as biting.
Property claims process (commercial) 🏠
Fire and special perils - insured must notify insurer immediately, mitigate loss, provide full details and proof. Insured would then establish 1) was policy in force 2) is claim valid 3) whether policy covers the loss. Settlement will generally be cash 💸
All risks claims- same as fire and special perils
Theft claims - insured must notify appropriate authorities and will generally liase with police 🚔
Glass claims - insurer will generally use an approved repairer as little financial incentive to overstate cost. Subject to XS to avoid small claims
Money claims - insurer will request proof of money etc was on the premises, details of circs and confirm matter was reported to authorises. Lots of scope here for customers to commit fraud so special investigators assist with enquires if needed💰
Legal expenses process (pecuniary insurance)
Different from other policies- insurers can access its potential liability before the claim starts.
Insured has no obligation to notify their insurance before legal action, insurers can take necessary steps such as appointing solicitors etc
Business interruption process (pecuniary)
Covers insured’s loss of profits after damage to their property caused by an insured peril.
There is aways a property damage condition with BI insurance (property itself must be insured before BI is taken out).
Q’s at proposal stage are based around what the customer would do in the event of the claim.
Indemnity period (usually 12, 24 or 36 months) is the max length of the claim.
Creditor insurance process (pecuniary)
Provides protection to the insured if they’re unable to pay a loan due to death, disability or unemployment.
Insurer would need proof the insured isn’t working/evidence of payments insured needs to make.
Employers liability process
Compulsory for UK employers, covers indemnity against injury or death in course of employment. Policy is usually combined with public liability and claims are common in industries such as mining (High risk).
Policies are written on a loss occurring basis.
Public liability process
Covers loss or damage to third party property and injury caused by negligence or breach of statutory duty.
Often combined with products liability - claims made basis
Public liability policies are written on a loss occurring basis
Professional indemnity process
Protect the insured against their legal liability to third parties for injury, loss or damage from their own negligence.
Policies are generally written on a CLAIMS MADE BASIS. Means claims against the insured must be made during the period of insurance.
What types of liability insurance are written on a claims made basis?
Professional indemnity
Product liability
Q’ are - when was the claim made, did cover exist at the time?
What types of liability policy are written on a loss occurring basis?
Employers liability
Public liability
Q’s are - when did the loss occur, did insurance cover exist at the time?
With liability claims, the insurer must negotiate directly with the TP - true or false?
True- insured must pass any claim made against them to the insurer
Damages are paid to a claimant for PI claims under which 2 headings?
Special damages - losses that can be quantifed (medical expenses, loss of earnings)
General damages - less tangible losses (compensation for pain and loss of use of vehicle)
Commercial vehicles process 🚗
Claims considerations are the same as private motor.
Main difference is that the insured will arrange and pay for repairs and submit the invoice to the insurer.
What services do legal helplines and advice offer?
Purpose is to offer immediate practical advice to customers.
2 main services include - advice and assistance in respect of potential claims and advice only (legal)
What services do authorised repairers offer?
Benefits include discounted rates, convenience and quality (as approved repairers are vetted)
Motor insurers use repairers the most
Tow-ins may be arranged through insured repairers if vehicle isn’t driveable
What is an uninsured loss recovery service?
Uninsured losses are losses that a customer may suffer that are not directly covered by a policy of insurance:
- cost of vehicle
- loss of use
- personal injury
- loss of earnings/alternative transport
Which act sets out the rules on recoverable costs and introduced the concept of ‘after the event’ legal expenses cover?
Access to Justice 1999
What is ‘after the event’ legal cover?
Most legal cover is designed to cover legal costs associated with an incident likely to give rise to a claim (known as before the event cover ).
After event cover underwrites the possibility that the court action will be unsuccessful. Premium is paid to the insurer in exchange for the guarantee of payment of legal associated with the Prosecution of the claim.
Used to be the case that if the claim was successful the premium for the ATE cover could be recovered from the defendant. LASPO act now prevents the recovery of the ATE and introduced qualified one way cost shifting.
What is a conditional fee agreement?
Orgs such as accident management companies and solicitors who offer a service to recover uninsured losses (usually on a no win no fee basis).
What are risk control and advice services?
Companies use risk management to control the risks that impact their business. Risk controls can be financial or physical.
Financial- customer will make sure money is available to meet losses that occur through risk retention and/or risk transfer. Retention = meet the losses yourself
Physical- using practical techniques to reduce frequency/severity of losses through avoidance or reduction
What is a rehabilitation service?
When a TP is injured and makes a claim against someone who has liability insurance, the insurer may help the TP by offering rehabilitation.
(Process can help with long term recovery and could reduce future costs).
What requirements does the personal injury pre-action place on insurers?
Consideration of rehabilitation where liability attaches to the policyholder (benefits of funding early to reduce long term costs).
What are 3 options for rehabilitation?
Medical - traditional medical methods such as surgery
Vocational - if claimant cannot return to work vocational care helps them find alternative employment
Qualitative - helps claimant overcome their problems
What 2 main services to legal helplines offer?
Advice and assistance for potential claims
Advice only
Why do insurers use authorised repairers?
Discounted rate, convenience and competence
What is an uninsured loss recovery service?
When you recover expenses following an accident, it’s designed to prevent someone being left out of pocket following an accident that wasn’t their fault.
Cost of hire vehicle
Loss of use
Personal injury
Loss of earnings and alternative transport
Which act sets out the rules on recoverable costs and introduced the concept of “after the event” legal expenses cover?
Access to Justice
What is after the event cover?
Deals with the possibility that the court action will be unsuccessful.
An ATE agreement can sit alongside a conditional fee arrangement.
Which act prevents the recovery of the after the event insurance premium from the paying party?
Legal aid, sentencing and punishment offenders act (LASPO)
What is “qualified one way costs shifting”?
Concept which prevents the recovery of costs from the losing claimant, introduced by LASPO.
What is the aim of the civil procedure rules? (PI)
Reduce costs/delays in handling PI claims and prevent litigation.
Objective is to encourage all parties to isolate areas I’m dispute asap.
What are pre-action protocols? (PI)
Designed to help early settlement of PI claims.
There are 3 different tracks in the courts - small, fast and multi track
There are 8 pre-action protocols with strict penalties/timetables - each protocol is slightly different but contain basic principles (letter of claim from a TP’s solicitor must be acknowledged within 21 days and there is a 3 month time-frame to investigate the claim/decide liability.
