Insurance Claims settlement process begins if the loss occurs. The process varies depending with Insurer but most are as follows:
Identifying the cause of the loss
This is the responsibility of the claims adjuster. He will confirm the damage, verify your initial statement and, if necessary, consult with specialists. At his request, you will have to provide him with certain information or documents to help him identify the cause of the loss. Depending on the results, he will confirm whether your claim is admissible or not under the terms of your insurance contract.
Estimating the damages
The claims adjuster must also estimate the amount of damages and decide on how much compensation the insurer will offer to pay you. He will sometimes be assisted by an appraiser or other specialists. However, it is your responsibility to properly document and justify your claim, and, in particular, to prepare an inventory of damaged, destroyed or stolen property with as much proof of ownership as possible (invoices, pictures, etc.). For each item, indicate whether you wish to salvage it by having it cleaned or whether you feel it is unsalvageable. Ultimately though, it is the claims adjuster who is responsible for declaring an item a total loss.
The faster you submit your inventory, the faster your claim will be processed. Be aware that the insurer could refuse to pay if you make a claim for more than you actually own or overestimate the value of your property.
Choosing the contractor
You are free to choose the contractor who will do the repairs or you can do them yourself. Insurers can also suggest service providers with whom they already have a business relationship. No matter what, the decision is always up to you. Discuss your decision with the claims adjuster in charge of your file and come to an agreement on the terms and conditions of the settlement, since they may differ if you do the work yourself.
Authorizing the work
Review the quotes for the work, taking care to verify the proposed costs for each step of the process—for instance, rebuilding and storage; or cleaning, repairing and replacing personal property—as well as timelines. Confirm it all with the claims adjuster and verify whether your insurance contract provides lump sum compensation or breaks down the compensation into fixed “line items.” If there is a limit on the amount of insurance, you may have to prioritize between repairs to your home and replacing damaged personal property.
Negotiating the settlement
Once the claims adjuster has received the inventory of damaged personal property (with the items’ origin and replacement value as of today’s date), he can calculate the settlement offer using the information in your contract concerning coverage, limits and exclusions, and, in particular, replacement cost or depreciated value.
If you have replacement cost insurance, your property will be repaired or replaced by new items of the same nature and quality, even if replacing them costs more than what was originally paid. If you decide, however, not to have certain items repaired or replaced, the insurer will compensate you for the value of the damaged goods on the day the loss occurred, in other words, at their depreciated value.
Paying compensation and the deductible
Depending on the extent of the damages, payments are made throughout the settlement process, as the service providers submit their invoices. Make sure you have told your insurer whether or not you are satisfied with the work that was done before the insurer pays the service provider. If damages do not exceed the limit of insurance, your deductible will be deducted from the compensation or the insurer will ask you to pay this amount directly to the service provider.
Claiming the amount of the deductible from a liable third party
If a third party is liable for the damages you suffered, you can claim reimbursement from this party for both your deductible and damages that your insurer did not reimburse. Do not forget that there are limitation periods for taking legal action. Be careful! Ask your claims adjuster for more information and consult a lawyer, if necessary. A model letter is available at chad.ca.