the Claim process
how it works, why it works and who's involved
There are several different types of policies and coverage available to an even wider range of applications in today's economy. Due to the extent of coverages we can not accurately describe the claims process for each specific application but there are several general rules and theories that apply to every claim. This summary of the claim process below is not meant to be legal advice. Contact an attorney if you seek legal advice.
First there are a few basic terms to understand. The insurance company is referred to as a carrier and the person they are insuring is the insured. If another party is involved (as if in an auto-accident) they are refered to as the claimant. Conversely, the same is applied from the other party's point of view having their own insured and you as the claimant. There is usually a peril involved (cause of loss such as wind, fire, etc.). Either the insured, claimant or both may be found liable for damages.
With the rising cost of litigation insurance companies seek to resolve claims between themselves "in-house" or without the use of costly court proceedings. If you've incurred a potentially insurable loss then you have likely notified your carrier about the claim. Simple claims such as theft with no significant property damage (a burglary involves forced entry or property damages), or a general liability case such as a slip and fall may only involve a claims rep directly from a carrier's home office. If your carrier is a larger company they may employ a salaried adjuster who will come out to review your loss. A salaried adjuster is not an independent adjuster and is employed by your insurance company. The adjuster will likely perform his job as described here.
If an offer for settlement is made or an agreed figure is reached then the adjuster will likely seek permission to pay based on findings. If coverage is afforded based on the conditions of the policy, then a payment may be drafted in order to indemnify the propert party. When the affected parties accept the proposition than the claim is closed and completed.
If the offer is refused (usually after a 2nd or written attempt to negotiate) and a formal disagreement found, then the parties may consult the policy for dispute resolution. Some policies call for an "appraisal" process which is akin to mediation, while others may call for similar or more adverse resolutions. Generally an award is made by a qualified neutral party under these circumstances.
Almost all insurance policies today include a clause explaining that the insurer has the right to subrogation, which is the direct right to collect their losses from a responsible party, should there be one. Usually the insured is not made aware of this process and the claim process ends.
