Claims Practice. Handling and Settlement

Transcription

1 Claims Practice Handling and Settlement

2 Topic Objectives Contents 6. Handling Personal Lines Claims Explain the impact of regulatory requirements on handling personal lines claims Explain the typical personal lines policy coverage issues Explain how to investigate a personal lines claim Describe how personal lines claims are negotiated and settled Describe the process that is followed if a personal lines claim is declined and then disputed by the policyholder Personal lines claims Claims notification Assessing coverage Investigating the claim Claim is covered Claim is not covered

3 Characteristics of personal lines claims Policyholders with little understanding of insurance Consumer Insurance (Disclosures and Representations) Act applies TCF applies ICOBs applies FOS is available There is an emotional perspective Claims service influences future buying

4 Basic Considerations Is the claimant covered by the policy? Did the loss happen within the period of cover? Did the loss happen in a place that is covered? How did it happen? (was it by a peril that is covered?) Is the subject matter covered?

5 Preliminary Claims Decisions Reject cover Accept liability subject to agreeing the amount Appointment of loss adjuster, lawyer, motor engineer, etc. Further investigations to be carried out

6 Assessing Coverage Has the premium been paid? Has the claim been notified in accordance with requirements? Is the claimant covered by the policy? Did the loss happen within the period of cover? Did the loss happen in a place that is covered? How did it happen? (was it by a peril that is covered?) Is the subject matter covered? Warranties and conditions complied with? Any conflict between underwriting and loss information?

7 Use of experts Large property damage claim Loss adjuster Third party personal injury claim Lawyer The insured vehicle is written off in an accident possibly due to faulty brakes Motor Engineer What exactly do you want them to do? It is important to give experts clear instructions.

8 Who is the expert working for? Loss adjuster Appointed by insurer Must be impartial Expert advisor or consultant Duty only to who instructed them (insurer or could be both parties) Defence lawyer Works for insured in defending the claim Also works for insurer in advisory role Expert witness (e.g. Doctor) Over-riding duty to the court Single joint expert also has duties to both instructing parties

9 Experts potential conflict of interests Lawyers Law society guidelines Loss Adjusters Chartered Institute of Loss Adjusters (CILA) rules Surveyors, engineers, doctors, etc. Professional bodies with own guidelines Must never give instructions to professionals that go against these guidelines or rules Expert witnesses Civil Procedure Rules (CPR) and Protocol for Expert Evidence Claims Handlers Regulatory requirements

10 Instructions to expert Why are you instructing them? What do you want them to do? What don t you want them to do (limits on their authority)? What information do you want them to give you? When do you want it? How do you want it?

11 Independent Adjusters and Advisors Internal Claim Adjusters Independent and impartial Not independent Reinsurers usually treat as loss expenses Expenses not included in reinsurance claims Similar principles and procedures apply (e.g. importance of clear instructions)

12 Possible Limitations to Indemnity Sum insured or limit of liability Valuables limit (e.g. household) Inner policy limits Pairs and sets clause Underinsurance and average clause Excesses and deductibles Franchises

13 Methods of providing indemnity Cash Repair Replacement What is the most appropriate method for the claim? Which methods help to deter fraud? Reinstatement

14 Agreed value policies No need to: Prove value of the items insured Obtain estimates Make deductions for wear and tear Worry about underinsurance Do need to: Investigate the loss Value partial losses Apply a reserve to the loss

15 Claim is not covered Must inform insured quickly Reasons for declining claim must be put in writing FCA requirement to handle claim promptly and fairly TCF applies Disputes go through complaints procedure All personal customers have right to go to FOS Claims in foreign jurisdictions are different (e.g. in US dispute more likely to be taken to court) Careful record keeping is vital