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Claims Reporting Timing is Everything
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The key to making sure your claims are honored per your policy is to first read and understand your obligations. The same education process you use when taking a new medication would be a valuable tool as you take the time to understand your policy. It is a simple analogy, but if one can remember to take their medication with food then one should also remember what is required in reporting an insurance claim. 
  

That same attention we pay to our personal lives would be well-served if we paid it to our business lives also. Your claim reporting requirements are usually listed under the conditions section of your policies, but in some policies it may be found in the beginning of your policy under the insuring agreement. Wherever it is found, the requirements are specific and detail your requirements depending on the type of claim. For example, if one of your vehicles is stolen, your reporting requirements state that you must file a

police report.

 July 2011 

 

As we go through our lives and traverse life's various events, we often comment that "timing is everything." Many of us have mastered the art of procrastination since we are so busy; but in the case of filing a claim this procrastination may have detrimental effects.

 

An insurance policy is similar to many other legal documents in that both parties have responsibilities that must be performed for the contract to remain valid. Although it is clearly stated in the policy that failure to report a claim can jeopardize your coverage, many people treat this duty as any other mundane chore and neglect to comply with that direction. Within most areas of the law ignorance is not an excuse to not follow the rules set out and this is the case also when it comes to your insurance coverage.   

 

Unlike your electric bill there is no firm date that states a claim needs to be reported within 30 days, but one should not infer that this means there are no limitations. A policy holder needs to be informed as to what type of policy your coverage is under to ensure you are always in compliance. For example, if you have a "claims made and reported" policy the timing of reporting your claim is more restrictive in that the claim must be made and reported within the policy year.

 

It is also important to note that even if you have a "claims made" policy, not reporting a claim before you renew your coverage may be cause for a claim denial. If we revisit some of our procrastination habits, it is easy to take those statements that say to report your claim as soon as it is "practicable" or "promptly" as being ambiguous and certainly open for interpretation during our busy days. The fact remains that if your delay to report a claim in any way affects the insurance company's ability to investigate and settle the claim you could be held accountable.

 

It may be helpful if we cover the basics of filing a claim regardless of the type of policy you have. First and foremost, not reporting a claim as quickly as possible could have adverse effects. This rapid reporting is not just so that the insurance company can start all its paperwork, this is to protect you. You are not allowed to commit to any obligation or to incur any expenses without notifying your insurer. If there is physical damage the additional step of filing a police report must also be done as soon as possible. If you take both of those steps in a prompt manner you have greatly increased your chances of the successful processing of your covered claim. You do have some further obligations in this contract. One of them is to take all reasonable steps to protect your asset from any further damage. In order to accomplish this part of your obligation, after reporting your claim, you are allowed to incur expenses as long as you keep adequate records and prove that they were necessary. This is not to imply that you can perform non-safety required repairs without allowing your insurance company the opportunity to inspect the loss.

 

To avoid any denial of claims for losses that are covered under your policy there are a few basic housekeeping activities that might help avoid any unwanted surprises. Make sure that all questions were answered appropriately when applying for your policy and that any changes to that information have been submitted to your insurer. The next step is to go over your policy with members of your staff responsible for insurance matters and make sure everyone understands your coverages so it will be an easy decision on whether a claim should be filed in the first place.

 

After reviewing your policies, put a procedure in place so that a review is done before your policy renewal dates to ensure all potential claims have been filed. When you file your claim do so, or follow up, in writing. If you decide you need to file a claim make sure that you notify all possible insurers that may be at risk for the loss; never be concerned about over communicating. Anytime there is even an inclination that someone may be holding you accountable for an action that might give rise to a claim, notify your insurer. Do not wait on making critical repairs to keep your business safe and operational but do remember to get multiple estimates as soon as possible. It is always a good idea to have cameras available to help document damages to your property and vehicles and cameras available to your staff to photo accidents occurring on your property and while using company vehicles. 

So to sum up, your responsibilities are clear. Educate yourself and your staff regarding policy reporting requirements and report claims as soon as possible so there will be no confusion or risk on your part. Know your obligations under your policy and execute them in a timely manner. Provide as much documentation as possible and cooperate fully with your insurer. The sooner you report a claim and include as much documentation as possible with your initial report, the sooner your insurance company will be able to resolve your claim. Be proactive and avoid the procrastination tendencies and your relationship with your insurer will improve.