The Loss Adjuster Paying and Settling Claims

Insurers are expected to promptly assess all of the claims that are made and to pay out all claims that ...

Insurers are expected to promptly assess all of the claims that are made and to pay out all claims that are covered by the wording in the policy. 

Under the General Insurance Code of Practice, insurers promise to respond to your claim within 10 business days and tell you whether they will accept or deny your claim based on the information you have provided.  

When a claim is made the Claimant will need to provide enough proof of their financial loss under the policy. This may include proof of ownership of claimed items, photographs, valuations, contracts, police or medical reports, and receipts or invoices. These will depend on context i.e personal injury, home burglary, business interruption, crops, stock, inventory, inventory in the process of manufacture, catastrophic events such as a hurricane, flood or fire.

If the insurance company needs more detailed information before making a decision, it will tell the Claimant what information it needs within 10 business days of receiving the claim.

The insurance company might decide to appoint a loss adjuster or a licensed private investigator to get more information. If so, the insurance company will provide the Claimant with an estimate of how long it will take to make a decision about the claim. It will also notify the Claimant within five business days of appointing that person and it will update the Claimant, every 20 business days, about the progress of the claim.

If a claim is complex, the insurance company can and is allowed to negotiate to arrange a different timeframe for settling the claim.

Claimants can have access to any information about them that was used by the insurer to assess the claim unless the company is investigating the claim. Insurers are not allowed to be unreasonable in denying requests for information and reports about claims to Insureds.

If a mistake is identified in dealing with the claim the insurer promises to correct that information straight away.

If an insurance claim is denied, the company must provide written reasons for the decision to deny the claim and information about its complaints handling procedures. This process may have already been to Internal Dispute Resolution (IDR).

If a Claimant asks for them, the insurance company will also supply copies of any reports from service providers that were used in assessing your claim.

The General Insurance Code of Practice addresses insurance company responses to an event declared by the ICA to be a catastrophe because the companies may not be able to meet tight deadlines when a lot of people are making property claims at the same time. If you have a property claim resulting from a catastrophe and insurers have finalised your claim within one month after the catastrophic event causing your loss, you can request a review of your claim if you think the assessment of your loss was not complete or accurate, even though you may have signed a release. Insurers will give you 12 months from the date of finalisation of your claim to ask for a review of your claim.

Settling the Claim

The end of the claim negotiation process is the agreement between the insurer and the insured to settle. A level of skill is required to know the right time and the right level to do this.

In many contexts from hobby sailing to skyscraper building timing is vital. Some claims need to go through an extended process before they are ready for settlement others need to be settled quickly before they deteriorate into a legal dispute matter. Loss adjusters are used as professionals in knowing when and how to close a claim.

When a Loss Adjuster is faced with unrealistic expectations, it can take some time for those expectations to be managed to a level where an appropriate settlement can be achieved. In some cases, certain events have to unfold before the claim can be properly gauged. It can also take time to complete the research that is needed to make an accurate assessment. However, there may be certain points during the process where the best outcome can be achieved by negotiating an early settlement.

There is no perfect system for identifying the right point within the ‘settlement zone’ where the settlement should occur. Experience, skill and intuition are needed, along with a sense of the dynamics involved in the relationship between the insurer and the insured to guide both.

The Loss adjuster identifies the right time to close a claim, decisively, sensitively and effectively. Claim conclusions opportunities include:

• An offer is on the table within the limit available to the Adjuster.

• A deadline is approaching that is critical to one or both of the parties.

• The other party clearly wants to settle.

• External factors mean that the claim will only move in the wrong direction from this point. This could be the case if time-critical decisions need to be made based on the settlement e.g. with a business interruption claim).

At one of these moments, the time will be suitable for the Loss Adjuster to put the final proposal and secure the other party’s acceptance. Obtaining agreement at this point is the final task of the Loss Adjuster.


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