chapter 8 Flashcards
What are the common methods of settling claims?
Common methods include cash settlements, repair or replacement of damaged property, payment of medical expenses, and settlement through structured payments for long-term injuries.
What is a “full and final settlement”?
A full and final settlement means that the policyholder agrees to accept a certain payment in exchange for releasing the insurer from any further liability related to that claim.
What is the role of a loss adjuster in the claims settlement process?
A loss adjuster is responsible for assessing the extent of the loss, evaluating the claim, and recommending the settlement amount to the insurer.
What factors influence the negotiation of a claims settlement?
Factors include policy terms and limits, evidence of loss, repair estimates, market value of damaged items, and legal considerations.
What is a “cash settlement”?
A cash settlement is when the insurer pays the policyholder a sum of money instead of organizing repairs or replacements, allowing the insured to manage the repairs themselves.
How does a “replacement in kind” settlement work?
This involves the insurer replacing a damaged or lost item with a similar one, rather than offering cash. It is common in property and auto insurance claims.
What documentation is typically required to settle a claim?
Documentation may include proof of ownership, repair estimates, invoices, police reports (if applicable), and any correspondence between the insurer and policyholder.
What is a “structured settlement”?
A structured settlement involves paying compensation in regular instalments over a specified period, often used in cases involving long-term injury or disability.
What is the role of the Financial Ombudsman Service (FOS) in claim disputes?
The FOS helps resolve disputes between policyholders and insurers when a claim is denied or if the settlement is disputed, offering an alternative to legal action.
Why is customer communication important during the settlement process?
Clear and regular communication helps to manage expectations, build trust, and ensure transparency about the progress and outcomes of the claim.
What is the purpose of a settlement release form?
A settlement release form is a legal document signed by the policyholder to release the insurer from further liability once a claim is settled.
What is the impact of policy exclusions on the settlement process?
Policy exclusions can limit the amount payable or exclude certain damages, which can affect the final settlement amount offered to the policyholder.
