Claiming insurance? Follow these dos and don'ts

There are instances where the insurance company will not pay out claims... Beware!

Most of us end up taking various sorts of insurance covers to ensure that we are not too badly affected in any eventuality. However when it comes to processing claims against these  covers, there are some important aspects to watch out for to ensure that the process goes off smoothly. There are instances where the insurance company will not pay out claims -- mainly due to suspected fraud, non-coverage/ under coverage for the eventuality, non-payment of premiums, etc.

Truthfully discuss with the insurer

One should ensure that all the information is given correctly and honestly to the insurance company at the time of taking the insurance. For example if you smoke it is advisable to let the insurance company know before paying the premium. If one hides crucial information, the insurance cover is liable to be made null and void and any claims can be rejected. Also, ensure that you relevant documents carefully while filing your insurance claim.

Submit the claim at the correct time

Many insurance companies do not directly take claims or process any claims; they instead outsource them to dedicated third party administrators. These third parties act as the front end for the insurance company's claim process, and collect the necessary paperwork from the insured, as well as organise for the insurance surveyor to verify and value the claim. Once this is done, they pass on the paperwork along with the valuer's reports to the insurance company for payment.

Keep proof

Ensure that you keep all documentation and other evidence supporting your claim, for example if the claim is for a damaged car due to an accident, take pictures of the vehicle along with the accident scene, FIR copy, etc. It is prudent to give the insurance company (or the third part administrator) enough information to ensure that your claim is not rejected.

Fine print

It is advisable for you to know what is and is not covered under one's insurance scheme.  One should also ensure that their insurance company's policy covers the damage before filing for a claim.

Read your insurance scheme to know in what ways you can file a claim and how long you have in order to file the claim and process the same. It is also important to keep in mind the time line, for some insurance polices are time dependent (example: in the case of an accident the insurance cannot be claimed after a year or so, but within a stipulated time frame).

Deductible

Keep in mind that the deductible is a major component of the insurance; one is liable to pay this money out of one's own pocket before the insurance company will be willing to settle any claims. This can limit the amount of insurance claim money one receives for smaller claims. Also, most insurance companies offer 'no claim' bonuses for their clients, that is, they reduce the premium amounts for clients who do not have any claims during the year, and the more number of years without a claim, the lower the premiums. Hence, it might work out cheaper in the long run to pay for small damages rather than claim insurance always.

Summary:

Read your insurance scheme carefully

Be honest with your insurance company to avoid issues later on

Know how much you can claim for specific damages and keep in mind the time line

Submit all the documentary evidence supporting the claim

Photograph: Dominic Xavier/Rediff.com