Step 1: Investigation
When a claim representative receives the initial report of a claim, he or she must investigate to gather further information relevant to the loss. This investigation is necessary to determine the cause of loss, to assess the damage, and to verify the coverage.
Determining the cause of loss and assessing damage
For a property insurance claim investigation involves visiting the site to inspect the damaged property in determining the cause of loss and assessing the damage occurred. Investigation must reveal sufficient information to verify whether the coverage exists under the policy and the physical condition of the property before the loss occurred. Assessing damages involve such activities as valuation of the property damaged by verifying the market value, bills of purchase, other books of records, etc., as required on a case-to-case basis.
Verifying Coverage
In addition to determining the facts surrounding the loss the claim representative must determine the coverage provided by the policy will pay any or all claims submitted.
Following are the checklist of questions which forms part of verifying the coverage: -
· Does insured has an insurable interest in the property?
· Is damaged property covered under the policy?
· Is the cause of loss covered under the policy?
· Do any additional coverages, endorsements or limitations on coverage apply?
Step 2: Valuation
For a claim representative the valuation of loss can be most difficult aspect of settling property insurance claims. In order to indemnify the insured according to the policy provisions, the claim representative must be able to answer two questions: -
· How does the policy specify that the property be valued?
· Based on that specification, what is the value of the damaged property?
CHAPTER: 6 CLAIMS
