Moment of truth in a policy contract

One objection to purchasing insurance, especially non-life insurance, is that the premium is a ‘worthless’ one if you do not make any claims.

Your premium is not an investment and the claim is not a Return on Investment (RoI). If yes, the premium will not be so low! Premiums of a large number of people are deposited to cover the loss of some. According to past experience the amount is calculated based on the probability of loss. Nevertheless, for you and me, our claim represents a moment of truth in an insurance transaction. We, as customers, are claiming our right and the insurance company has to fulfill its duty under the contract to bear good financial loss.

Iffy Offer

Let us understand the reason for the common belief that claiming payment by insurance companies is a reasonable proposition.

Insurance is a legal contract and everything is in writing. It is our duty, as parties to the contract, to know what we are paying, what we can get and under what terms and conditions.

In fact, this fee begins with due diligence before purchasing an insurance policy because the best of the contract, if they are for the wrong product, will not serve our purpose.

Making a successful claim determines the following. You have a valid insurance policy, that the loss for which you are claiming falls within the scope of the policy, and you can support the nature, cause and amount of the loss with documentary evidence.

In addition, insurance companies claim that the claim itself is genuine because fraudulent claims are difficult and are a financial burden on honest policyholders. To independently ascertain the facts and properly determine the loss, the insurance company may initiate a survey or investigation. It is your responsibility to give them your full support.

The process of making claims is simple in concept.

Take an example. Suppose your car meets an accident on the way to work and the bumper is badly damaged.

For your claim to be acceptable, your car insurance policy must be current and your documents such as a car registration certificate and the driving license of the person driving the car at the time of the accident must be valid. Further, while violating any law should not result in an accident, the vehicle should have been used for its stated purpose and the driver should not have been under the influence of narcotics.

Medical attention

What do you do when an accident happens? Before you formally inform your insurer, it is your moral duty to help anyone injured in an accident seek emergency medical attention.

You have to inform the police if they are not already there and call your dedicated call center number and inform your insurance company.

It would be a good idea to call your agent as he can assist you with all the instructions and handle the claim process by submitting your documents. In the next installment, we need to see the details of the documents you need and how to file your claim.

(The author is a business journalist specializing in insurance and corporate history)