Study 5: First Notice of Loss - Summary Flashcards
1
Q
Relationships in Loss Adjusting
A
- Insurance relationships begin with the two parties to the insurance contract: the insured (first party) and the insurer (second party)
- The insurance contract itself is the policy of insurance. If it’s a liability policy, the claimaint is the third party to the contract (a party outside the contract who claims the insured is liable)
- The intermediary between the two parties is the broker or agent
2
Q
Outline of the Claims Process
A
- Insured party reports the loss to broker, agent, or insurer call centre or via a website or mobile application on a smartphone or a similar device.
- Claims handler records preliminary information and asks for details, or insured may complete questionnaire on web-based site or application on a smartphone or a similar device.
- Claims information is reviewed by a claims handler or by artificial intelligence software
- Claims handler identifies any possible coverage issues that will require further investigation and review and notifies the insured of those potential coverage concerns.
- A loss adjuster is assigned to the claim, and he or she proceeds with the next steps
3
Q
Claims information reviewed by a claims handler or artificial intelligence software
A
- Which policy or policies apply to the property or incident?
- Does the policy period cover the loss?
- Is the cause of loss potentially covered?
4
Q
Next steps after a loss adjuster is assigned to the claim
A
- Verifies the policy coverage
- Investigates the loss
- Evaluates and assesses damage
- Negotiates as necessary or denies the claim
- Arrives at a settlement
- Recommends payment
- Pays the claim
5
Q
Some key functions within the claims process which tend to overlap
A
- Policy contract analysis
- Investigate to gather required information and document the loss.
- Evaluate the amount of damage.
- Negotiate and agree upon the value of the insured damage.
- Settle the loss.
6
Q
Loss reporting process
A
- Insured reports loss to either broker or agent, or to insurer directly.
- Date of loss must be recorded
- Relationship of person reporting the claim must be determined - if not the insured, do they have authority to report a claim? Policy favours an heir, trustee in bankruptcy, or other insured.
- Initial loss report must reach insurer as soon as possible and include details of the loss
- Loss is assigned to an adjuster (in-house or independent)
- Traditionally, brokers monitor progress of the claim and advocate on insured’s behalf
7
Q
Four ways an insured may report a claim
A
- call or visit the offices of the insurer, broker, or agent to report the loss;
- email the broker, agent, or insurer with details of the loss;
- use a web-based form provided by the insurer or broker to report the loss; or
- use an application on the insured’s smartphone, tablet, or computer to report the details of the claim.
8
Q
Examples of supporting service providers
A
- Appraisers
- Estimators and surveyors
- Resortation contractors
- Automobile body shops
- Authorities (police, firefighters)
- Witnesses
- Private investigators
- Lawyers, arbitrators, mediators
9
Q
Supporting service providers and their function in the claims process
A
- Assess the damage.
- Determine the cause of the loss.
- Estimate the cost of repairs and carry them out.
- Supply products or services.
- Assist in resolving claim disputes.
10
Q
Elements of a Sound Response to Report of Loss
A
- Initial response must acknowledge the insured’s feelings. Relationships can be enhanced by a sincere desire to resolve claims promptly
- However, a professional response also requires that these soft skills be tempered with knowledge of the contract terms and a focus on the facts.
- Important to manage expectations - should not comment on when a claim will be paid, or make comments such as “It’s good you have insurance,” before coverage has been established
- Claims handler should assess policy coverage, the seriousness of the claim, what must be done immediately, and who should be assigned to handle the loss
- More than one adjuster might be needed (ex. an at-fault vehicle accident may need an adjuster to assess bodily injury claims and another for accident benefits)
11
Q
Four ways the claims handler should manage expectations
A
- Convey a realistic timeline to the insured when possible.
- If there is a coverage issue or a deductible to be applied, make the insured aware of it as soon as possible.
- Point out policy conditions and limitations relevant to the claim to the insured when the claim is reported.
- Write a detailed letter to summarize the above points, and regularly send further written correspondence, such as letters and emails, confirming updates to the claim status, as well as speaking with the insured.
12
Q
Policy obligations of the insured
A
- Statutory conditions outlined in insurance legislation in common law provinces, and general conditions are outlined in the Civil Code of Quebec
- Coverage benefits may be in jeopardy if they breach a policy condition. When taking notice of loss, information relevant to policy conditions must be recorded
- Policy obligations must be brought immediately to the insured’s attention
13
Q
Reporting loss to the insurer
A
- Loss must be reported as soon as possible (ex. as soon as the loss happens, or as soon as they have been given notice or become aware of a potential liability claim)
- Requirement to report in writing is generally not enforced
- If an insurer is prejudiced, it may affect the insured’s ability to recover their claim. Insurers can be prejudiced by delays in reporting, repairs completed before reporting, claims reported after judgement, or failure to minimize loss
14
Q
Delay in reporting
A
If a delay in reporting the loss affects the insurer’s ability to properly assess damage and conduct an investigation, the late reporting has prejudiced the insurer, and the insured may lose their right to be indemnified for the loss if they don’t have a reasonable explanation for the delay.
15
Q
Completing repairs before reporting the claim
A
Prejudices the insurer by not being able to confirm the cause of loss or the legitimacy of the repair costs. The costs may be inflated or not covered under the policy contract.
