To Claim or Not to Claim?

Each and every one of us insure solely with one interest in mind - that we should be protected from the loss caused by an adverse event. The purpose of every insurance cover is to place the insured in the same financial situation as he was before the occurrence of the insured risk.

Most of us take insurance covers without reading the full policy wordings which specifies the policy coverage, terms and conditions. This very often leads to dissatisfaction with the insurance cover we have purchased.

There are three important criteria for claiming under any insurance policy. Clarity in these three criteria can lead to easy claims and better satisfaction from the covers you have purchased. When you feel that a claim can be raised under a particular insurance policy ask yourself the following questions

1. Has the loss occurred to the insured property or individual due to an insured peril?

Every insurance policy is aimed at covering specific perils or dangers that may occur to the the property or individual in question. There is would be a list of risks or situations which are named under the policy. Claims would be paid only on occurrence of these perils and subsequent loss, damage or injury occurring to the insured or property.

2. Is the cause of loss falling in any of the exclusions of the policy?

Every policy will have a set of exclusions listed, and claims arising out of these exclusions would not be payable. Before you proceed to claim under your policy, please confirm whether the cause of the loss is not listed in the exclusions. Under Personal Accident policies, death or any injury leading to disablement as a result of high risk sports activities are not usually covered. Here the cause of death or injury is an exclusion under standard Personal Accident policy. The losses directly as a result of an accident to a motor vehicle are covered, however,  losses occuring indirectly or consequential to the accident will not be covered.

3. Whether occurrence of loss is within the policy period?

Every insurance policy will have a specific coverage period, usually one year from the date of inception. Some policies are even timed- it specifies the particular time, on the inception date, from which the policy is active and the risk is covered. When you have encountered a loss and plan to claim under your insurance, please confirm whether your policy is still active. 

4. Effect of Excesses or Bonuses.

If all the above conditions are met, then check if your policy has any excess/deductable or accumulated bonuses. Excess is an amount which an insurance companies deduct from each and every claim or claim is only paid over and above the said excess amount. Bonuses are amounts which your policy accumulates over many continuous claim free years, which may be lost if we claim. Is it worth losing the bonuses? So before submitting the claim calculate the deductable/excess amount and losses in bonuses if any, vis-vis the claim amount.