Businesses and individuals buy property and casualty (P&C) insurance policies so, in the event of a covered loss, they are protected and can find some benefit in it. Business owners and individuals may be interested in the life cycle of their claims. As the client, understanding the life cycle results in awareness of how long is reasonable until a payout should be expected and what factors determine the benefit amount.
A business or individual relies on their P&C insurance to come through in a timely and professional manner when they need it the most. One of the main reasons for buying insurance in the first place is the added level of protection that it brings. The financial health of you or your business can be impacted by the series of events after a claim is filed. This is why the life cycle of a claim is so impactful and important to those who need to file one.
Many P&C claims are complicated, and the investigation process can take a long period of time to ensure that the information provided is true so that the claimant can receive the correct benefit amount. This is why it is so valuable to have an insurance company that you trust to evaluate the claim in a fair and knowledgeable manner. A good insurance agent or broker will have set you up with an insurance policy that covers what you need and will help you through the claim management process.
A claim is likely to follow this life cycle pattern:
1. Notification of loss: The insurance company must be alerted as soon as possible.
2. Police report and other initial evidence: If property was damaged or stolen, it is vital to file a police report or take pictures of the damage.
3. Possible third-party insurance claim: In the case of an accident, the third party and their P&C insurance must be notified.
4. Damage assessments: A professional surveyor will assess the damage.
5. Possible repair or replacement costs: The quote for how much it costs to repair or replace what was lost, stolen or damaged.
6. Adjudication: It may be necessary for a lawyer to review the evidence.
7. Processing: The insurance company will then evaluate the claim documents.
During the life cycle of the claim, each step will vary depending on the individual case and circumstances in which it was filed. For common and uncomplicated claim types, like a low severity personal auto vehicle damage claim, the above life cycle can happen shortly after a claim submission on your mobile app. The steps remain fairly consistent in most situations, so you can have a general idea of what happens to your claim after it is sent off to your insurance company.
Luckily for all involved, the technological revolution has touched the insurance industry in a very positive way. From analytics to processing software, InsurTech predictive technology has provided great benefits for a claim's insurance life cycle. According to the software company Accenture, "80% of insurance executives say that their organization's business and technology strategies are becoming inseparable— even indistinguishable."
Predictive analytics and predictive models can assist insurance companies by helping claims adjusters more quickly sort through outlier or potentially fraudulent claims while expediting more typical and predictable claims.
This can shorten the life cycle of all claims because claim adjuster resources can be freed up to focus on more intricate nuances of more complex claims.
AI and other tech are tools that can help insurance companies use claims data more effectively. When claims adjusters can access important data faster and more accurately, the lifecycle of the claim can be sped up.
A claim's life cycle may rely on technology, but your insurer's client service and hands-on work are also impactful. They are there to answer any questions you may have about where the claim is in its cycle and how the process is moving along.
If you experience a claim and feel like you are being kept in the dark, be sure to reach out to your insurance agent, insurance broker or claims professionals and start a conversation. You can ask things like: "What else do you need from me for the claims process? Where in the life cycle of the process is the claim?" Simple communication can give you plenty of information and context. Most insurance companies will do this without prompting but reaching out yourself is always a good idea.
Insurance companies know there is often significant competition in the marketplace for their products, hence, it is a very customer satisfaction-oriented industry.]
While working through insurance claims can occasionally be a part of your personal and business life, understanding the life cycle of the claim can help you know what to expect so you can manage your stress level.
Perhaps most importantly know that in most cases people involved are motivated to work through a claim's life cycle with efficiency and professional integrity. Be proactive and ask a lot of questions. If something is not being managed satisfactorily, speaking up may motivate business process changes. If your insurance company is not professionally cooperating with you, your state insurance department or local insurance consumer advocate may be able to assist you.
One often stressful reality of P&C insurance claims for claimants (i.e., the person or business submitting the claim) is that policy protections are not typically designed "to make the claimant whole" or to "make the claimant richer" after an insured event happens. P&C insurance products often use deductibles and policy limits to manage their risk. These realities often come up for claimants during the life cycle of a claim and can cause frustration if you are not prepared.
The P&C insurance system does not aim to promote a society wherein people and businesses lack incentives to act with a reasonable level of care and responsibility. The P&C insurance system works best when claimants also share in the responsibility for the process. This means taking reasonable precautions to proactively avoid a claim occurrence. When accidents do happen, it means, mitigating the severity of damage and cooperating with your insurance company. Pay attention to the life cycle of your claim(s) and self-advocate if something happens that doesn't seem consistent with your policy.