What you need to know about Insurance Claims

First, what is an Insurance Claim?

Let us look at it this way, when a person or an organization takes up an insurance policy and pays a premium to the insurance company, it is expected that the insurance company will provide cover for a certain risk and if that risk occurs and results to a financial loss, the insurance company is expected to pay a compensation. When such a risk occurs, the insured party makes a formal request to the insurance company for the payment to be made. This request is called a claim.

The insurance company validates the claim (or denies the claim) based on the agreement/contract between the insurance company and the insured party. If it is approved, the insurance company will issue payment to the insured or to another party earlier agreed (often called the beneficiary).

Now, it’s possible you have experienced an instance where you filed a claim, and it was denied. It’s understandable that the next question you would ask is:

Why are Insurance Claims denied?

It is very frustrating to have a claim rejected by the insurance company. However, sometimes this is the case and there are many reasons for this including the following:

1. The insured party failing to disclose something at the beginning of and during the policy that could affect the policy. In a health insurance policy for example, an insured person may fail to disclose to the insurance company that they have an already existing condition. A claim made on this pre-existing condition may be denied.
2. The insured party failing to keep to a condition in the contract. An insurance agreement/contract would usually carry terms and conditions. If a condition in contract has been breached and this comes to the knowledge of the insurance company, the company may deny the claim.
3. The policy is not in force when the event covered occurs. If an event (for example an accident) happens outside the period of cover, then the insurance company may deny your claim.
4. Claiming on an event that is excluded in the insurance policy: Most insurance policies have exclusions which are usually expressly stated in the insurance policy. In the case of a motor insurance policy for example, if damage caused by flood is stated as an exclusion, an insurance company may deny a claim arising from flood damage.

Where then does this leave you as?

Well, to ensure that your claims are validated and treated in a timely manner, it is important to:

1. Read the insurance policy document issued to you at the start of the policy to ensure that you don’t breach any of the terms and conditions of the policy. Also read and understand the clauses therein and ask questions from your insurer should you be confused.
2. Be up to speed on the expiry of your policy to avoid claiming on a policy that has lapsed.
3. Notify your insurance company of claims early enough to avoid delay in treatment. Be sure also to supply the claims supporting documents to enable the company to treat your claims swiftly.
4. Disclose all information material to your policy at the start of and during the policy.

Claims processing may take varying amounts of time depending on the type of event and policy. Some claims may be straight forward enough for an insurer to treat alone and other claims may need the intervention of a claims adjuster (a professional who is engaged by an insurance company to measure the true value of its liability).

AXA Mansard provides you with great financial solutions including protection, asset management and health insurance. For more information, call us on 0700 AXA MANSARD (0700 292 626 7273) or send an email to ccare@axamansard.com.