July 29, 2014

Understanding Claims Language

Insurance claims may sometimes seem to have a language all their own. If you get used to the terminology used in the claims process from beginning to end, though, you’ll have no problem deciphering those puzzling letters and emails you get from your insurance company.

Who’s Who?
First, let’s define who you are — you are the Insured, the person who bought an insurance policy, who has been making premium payments, and who now needs to make a claim for payment from the insurance company for a loss you have suffered. That insurance company is called the Insurer.

The Insurance Agent
Let’s take one more step back to the person who sold you the insurance policy. That person is called the Insurance Agent, whose chief function is to help you figure out what type of coverage fits your needs and what coverage amounts would be adequate in case you suffer a loss.

Types of Insurance
An Insurance Agent can sell you various types of insurance issued by different Insurers:
- Liability: protects you from losses that are suffered by others and that are caused by you, — it does not cover direct damage to your property or injury to you.
- Personal Liability: protects you from a civil claim against you because of an act of negligence on your part.
- Casualty: provides coverage against unexpected damage or loss of property that occurs because of you.
- Home: covers damage to your home and its contents, usually excluding floods as a cause.
- Flood: covers damage to your home from floods and defined by a Federal program.
- Health: covers medical payments for you and your family to treat disease or injury.
- Life: bought either as term insurance for a specific period or as whole life, and paid to a beneficiary in the event of the Insured’s death

Automobile Insurance
There’s also automobile insurance, the laws for which vary state by state — it’s based on three components:
- Comprehensive Coverage for any damage to your car not caused by another motorist, but instead by vandalism, theft, fire, tornado, hail or flood.
- Collision Coverage covers any damage to your car as the result of a collision of any kind.
- Liability Coverage, required by the laws of most states, covers payment for anything you damage while driving and the medical bills of anyone else who may be injured as the result of your driving.

The Claims Process
Now that we’ve gotten the descriptions of all the types of insurance down, we can move on to an insurance claim, the process by which you, as the Insured, request payment from the Insurer because some condition defined in the insurance policy, no matter what the type, has been met. The Insurer evaluates the claim first to see if the coverage given within the policy is consistent with the claim.

The Adjuster
The Insurer then assigns an Adjuster to do the work to see if the claim is valid and what amount should be paid if the claim is judged to be valid. The adjuster can be an employee of the Insurer or be self-employed and hired on an as-needed basis. Sometimes, you can hire an adjuster to work on your behalf.

Marshall Graham is an insurance claims consultant from Great Britain. He recommends that you check online for cheap home insurance and coverage comparisons to get the best value for your money.