If you are fortunate,
you may never have to make a claim against your insurance. However, when things do go wrong and
you are involved in an unexpected accident, disaster or other loss that is covered by your insurance policy, you can make a claim with your insurer.
The policy you buy is a
promise of assistance when things go wrong, provided you fall within the
policy’s terms and conditions. You need to lodge a claim to activate the
insurer’s response. If your claim is accepted (and almost all are), the insurer
will fulfil the promise it made in the policy. This is commonly through
repairing or replacing damaged property or items, covering legal fees, or
through a payment.
Insurers are there to
pay legitimate claims, and more than 97 per cent of all claims made each year
are accepted and paid to the limits of the policy’s terms and conditions*. Each
year, Australian insurers write more than 50 million general insurance policies
and pay $25 billion in claims*.
About 5 per cent of home
and contents policyholders and 16 per cent of motor vehicle insurance policy
holders will make a claim in a typical year*.
* Financial Ombudsman Service General Insurance Code of Practice Overview for the Year 2011-12
*APRA Quarterly General
Insurance Performance Statistics June 2013 (issued 29
August 2013)
*ISA data
What is a claim?
When you make a claim on
an insurance policy, you are formally notifying the insurance company that you
have suffered a loss or damage that you believe is covered by the policy and
you are requesting action.
The insurer will review
your claim and see if the event or circumstances are risks covered by the
policy.
You will need to provide
proof it is a genuine claim and the insurer will need to be certain the claim
satisfies the terms and conditions of your insurance policy.
If your claim is
accepted, the replacement or repair of your property or any payment by the
insurer is called the benefit or payout.
The insurer will work
out the value of the claim and provide the appropriate benefit specified in
your insurance contract.
The claims process
Insurance companies try
to make the claims process as smooth as possible, but the policyholder must go
through a few steps in the claims process.
Steps in making your claim
If you are well prepared
and organised, and you have all the information that the insurance company
needs to see, making a claim is usually straightforward and quick.
The first thing you must
do is contact your insurance company as soon as practical after the event
happens, especially if the loss is due to theft or a serious accident.
You may choose to review
the Product Disclosure Statement (PDS) for your insurance policy to see if you
have a valid claim and that the event is not on the list of exclusions for your
policy. Your insurer will do this anyway once you lodge a claim
You can make your claim
progress much more smoothly if you take an organised, step-by-step approach.
The following guidelines will help you to make sure that you don’t overlook any
of the important steps in the process.