Damages or Claims
When we search for auto insurance many times, we focus only on finding an affordable policy. We compare multiple quotes trying to obtain instant auto insurance with no down payment. However, there are many equally important things that we must take into account as well.
Any accident may result in the death or injury to the third parties. The claim is decided based on various factors, including the age, occupation, gender, and income of the person injured or dead. The Court usually awards the damages. The damages are the money recoverable by the victim from the party responsible for death or injury. The damages can be categorized into the following,
- General damages
- Specific damages
- Punitive damages
General damages flow naturally from the party responsible for the wrongful action. The value of general damages cannot be measured financially. It is the compensations sought for the pain and suffering, mental agony, loss of healthy life, loss of opportunity, and leading a low-quality life. The award for these damages is generally on a case-by-case basis; hence it will be difficult to benchmark these losses. These are usually occurring in third party personal injury claims.
These are usually measurable financially. These damages can be documented and are easy to assess. In case of hospitalization, it is easy to know the cost of treatment. The loss is based on the treatment cost. Whereas in case of damage to the bumper, the bumper’s cost is known, and the cost of replacing the bumper is also known. Hence the insured will be in a position to submit the claim with the necessary vouchers and bill to claim the award. A vast majority of motor claims come under the specific damage claims.
Punitive damages are financial compensation awarded to an injured party. It is over and above the average compensation, and the purpose is to punish the party at fault. Almost all insurance policies do not cover these types of damages. Covering punitive damages under the insurance policy will encourage people to become more reckless and commit gross misconduct. Hence the insured is left uninsured as far as the punitive damage cover is concerned. The insured has to pay the cost of punitive damage to the concerned authority or the third party.
Motor Insurance Claims process
Each insurance company has its own system of processing the claims. The following threads are included in the general process performed by insurance companies regarding claims:
- Receipt of claim notice from the insured
- Claim registration
- Building rapport with the customer
Receipt of claim notice from the insured
As soon as it receives the claim notification from the insured, the insurance company has to respond to the insured as per the regulatory requirement or as per their internal standards. On receipt of the claim intimation, the insurance company will make the necessary checks on the validity of the claim, the payment of premium, adequacy of the coverage, the validity of the policy, insurable interest, and estimate of the loss, etc. Once the claim is found to be in order, the insurance company will proceed to the next step.
The insurance company will register the claim. During the claim’s registration process, a claim reference number is allotted, and it is used as an identity for the claim. A docket is prepared, and the provision is made for the claim amount based on the estimate provided or evaluated. The claim docket will contain all the information related to the claim, such as:
- policy number
- period of insurance
- insured name
- registration number of the vehicle
- date of intimation
- date of the accident
- third party claimants
The loss reserve is allocated based on the estimated amount claimed, legal fees, and even the legal advisor’s name. All the papers pertaining to the claim are filed in the docket. Generally, at the time of registration, a close estimate of the claim is taken not to have a significant deviation at the claim’s final assessment and settlement. The claim estimate is used to make a provision under the claims.
Building rapport with the customer
One of the functions of the claims department is to build a relationship with the customer, especially in excellent and Direct Auto Insurance companies. The claims department representative will contact the insured and guide him in completing the claim lodged formalities.
The claims representative may invite the insured to the office to meet or visit the insured to formalize the claim and seek the requirements. The claims representative should understand that the insured has suffered a loss and not in a good state of mind and should express empathy while dealing with the claimant.