INSURANCE - 28.04.2020

Easing the claims process

You pay a small fortune in insurance premiums every year, but whenever you want to make a claim the insurer makes you jump through hoops. Is there a way to make the whole process more efficient?

Small print

The insurance market has become increasingly competitive, so some insurers are using policy wordings to avoid payment. Even with their so-called “plain-English” approach they are entitled to refuse a claim. What you might find is that the insurer takes a very pedantic line. For example, if one aspect of the requested information needed to support your claim is missing, e.g. a risk assessment, it may say “Sorry, claim refused”.

Common complaints. Many claims are made for things like burst pipes and leaking roofs. Insurers will often maintain that any damage is due to a pre-existing condition of disrepair and so throw out the claim. For burst pipes they might argue that the property was vacant or not properly heated. What can you do to improve the chance of your claim being accepted?

Making a claim

It may seem obvious, but the first thing to do is look carefully at your policy. Remember that you are looking for one insured event that gave rise to the claim. Most policies should contain a summary of cover, which will at least give a strong indication of whether you’ll be insured. If not, don’t bother wasting your time.

What’s next? If you think you should be covered, then these steps should make it a little less painful:

  1. Notify the insurer as soon as an event occurs that may give rise to a claim. If in doubt notify and do it in writing. Some policies require you to notify within a set time limit.
  2. If you’ve bought the insurance through an intermediary, see what sort of claims assistance service it’s able to offer. Some can take care of everything for you.
  3. When completing the claim form take care to relate it to an “insured peril”, e.g. storm damage or mechanical breakdown, otherwise the insurer will bounce your claim straight back.
  4. Gather as much relevant information as you can to support the claim. If you can’t produce what’s asked for, see whether alternatives are available, e.g. if proof of purchase is missing can it be corroborated in other ways?
  5. Anticipate in advance the questions the insurer will ask. If you suffer associated damages, e.g. lost orders, don’t simply say, “Losses estimated to be £5,000” . Show how you arrived at the figure.
  6. You’re most likely to claim under a motor policy. If an employee has had an accident, get them to write down exactly what happened. If it comes to an argument later, you may have sufficient evidence to win your claim on that note.

Tip 1. Although a loss you’ve suffered may be covered, sometimes you might want to think about whether it makes sense to claim. If the size of the likely settlement isn’t much greater than the excess you may have to pay, it might be worth bearing the loss yourself.

Tip 2. If you feel that you’ve been unfairly treated by the insurer, you can contact the Financial Ombudsman Service. They have a new SME service (see The next step ) and cover any complaints dating back to 1 April 2019. Microbusinesses (under ten staff and €2 turnover) can actually raise complaints for events before 1 April 2019.

For a link to the Ombudsman, visit http://tipsandadvice-business.co.uk/download (CD 21.15.02).

Notify your insurer as soon as an event occurs that could lead to a claim and make sure you have all the requested paperwork. If you feel that your claim has been thrown out unfairly contact the Ombudsman, it has a dedicated SME team to resolve complaints.


The next step


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