When policyholders take out insurance, they hope they’ll never have to use it. However, when accidents or unexpected events happen, insurance offers a safety net, helping cover the unexpected costs.
So, how exactly are insurance claims handled? Here is everything you need to know about insurance claims, whether you have a motor vehicle, home or personal insurance.
Do insurance agents handle claims?
Insurance agents are essential contacts in the insurance process. However, their role in handling claims is limited. While they guide policyholders on coverage options, answer questions and help clients choose the best policies for their needs, they don’t handle the actual claims process. Here’s a look at what agents can and cannot do when it comes to claims:
- Provide guidance. Agents are often the first point of contact after an incident. They can provide an overview of coverage specifics and answer questions about potential payouts. They may also help clarify any policy language around personal liability insurance or other coverage areas.
- Direct clients to claims departments. The actual claims handling process involves the insurance company’s claims department. After receiving a report, the claims team initiates their investigation, communicates with necessary parties and determines claim outcomes.
- Support through advice. While not directly involved in processing claims, agents can provide helpful advice, such as steps to take immediately after an incident.
How are insurance claims handled?
Insurance claims may be handled differently depending on the type of claim. For instance, personal insurance claims may be handled slightly differently from liability insurance claims. Below are the general steps for handling insurance claims. Contact the certified insurance brokers at Quality 1st Insurance for the exact steps for submitting your claim.
1. Report the claim
The first step is for the policyholder to report the incident to their insurance provider. This report can often be initiated online, through a phone call or even via a mobile app, depending on the insurer. When reporting the incident, the policyholder should provide as much detail as possible, such as:
- Date, time and location of the incident
- Contact information for those involved or witnesses, if any
- Photos or other evidence of damage
- Police report for motor vehicle accidents or criminal incidents like theft or vandalism
2. Assignment of a claims adjuster
After the claim is reported, a claims adjuster is assigned. The adjuster’s role is to investigate the claim, verify details and estimate the damage cost. They may contact other involved parties, review any documentation provided and even perform an in-person inspection if needed. For instance, in liability insurance claims, the adjuster may interview witnesses or request medical records if someone has been injured.
3. Claim investigation
During the investigation, the adjuster will evaluate the extent of the damages or injuries and assess if the situation is covered under the policy.
4. Damage assessment and cost evaluation
Once the investigation is concluded, the adjuster calculates the cost for repairs, replacements or compensation. This cost is based on policy limits, deductibles and coverage type. The adjuster will also examine whether any deductibles apply and what compensation limits are set under the policy.
5. Approval and payout
After evaluation, the insurer will either approve or deny the claim. If approved, the insurance company issues a payout to cover costs, repair damages or compensate affected parties. Who receives the money depends on the type of claim and other factors. For instance, for liability insurance claims where the policyholder was at fault, resulting in a total loss, the money is paid to the vehicle owner.
Keep in mind that your insurer will only pay damages amounting to coverage limits. You’ll have to settle the remaining amount out of pocket unless you have umbrella insurance. You can opt to buy umbrella insurance from the certified insurance brokers at Quality 1st Insurance to avoid complications when it comes to insurance claims.
Final thought
Knowing how insurance claims are handled can be reassuring, especially during unexpected events. Being aware of what to expect will give you peace of mind and ensure you don’t miss any steps when making claims.
