By Andrew Clark
The majority of Australians have never had the need to make a claim on an insurance policy so, if you're in that category, here is some important information designed to help you get the best value from claiming on your policy should the need arise.
First things first
Step one is to contact the insurer to advise them as soon as practical after the incident has occurred. It is also highly recommended that you make as many notes about the circumstances surrounding the claim as you can.
These notes may prove invaluable in completing your written claim form.
Having comprehensive notes to refer to will also assist you to maintain consistency in the details of your story if you are required to recount the events at a later time.
You should also keep copies of all documentation in relation to the claim, including a copy of the claim form itself.
It's also important to ensure that you are easily contractible by the insurance company's claims personnel. should they need to reach you.
It is possible that an insurance company may turn down your claim, despite the circumstances actually being covered by the policy.
If you think that you have been unfairly declined, it may be worth your while seeking legal advice.
You can also refer to our article 'Challenging a rejected Insurance claim decision' for further assistance.
Read your policy document
When a company refuses to pay a claim, you are within your rights to request the reason including details of the exact clause within the policy that the company is relying on.
You can also ask for a copy of the policy document if you cannot locate the original.
How did it happen?
Some policies will not cover you if you were the cause of the loss yourself, even accidentally. The policy document will confirm this.
You may wish to pursue this further if you are rejected on this basis but believe it not to be the case.
For example, if your house burned down and it was established that you were smoking in bed at the time, an insurer may reject the claim on that basis.
However, if it could be established that the fire was actually caused by something else, such as a faulty electrical appliance, your smoking in bed would be purely a coincidence and should not be a valid reason for your claim to be rejected.
Your insurance policy may exclude coverage for conditions that may already have existed the time that you took out the insurance.
E.g, if you own an income protection policy and when you took it out you had cancer.
From a legal standpoint, it would be critical to determine if you were actually aware of the cancer because your policy should still cover you if you didn't know that you had already contracted the condition..
Ignorance is bliss!
Before you sign up for your insurance, the insurer has a legal duty to supply you with a copy of the insurance policy document of the type that you are purchasing, the wording of which must be clear and unambiguous.
In the event that you weren't provided with this, a claim that falls outside the terms of the policy may actually be covered.
You may wish to consult a lawyer to confirm this should the need arise.
Should I bother making a claim?
Some policies will have a deductible, or excess, which will reduce the amount of payment that you receive from your loss.
Your policy may even have accrued a no claim discount that would be impacted by making a cvlaim and resulting in an increase in cost for subsequent years.
If either or both of these situations apply to you policy, you should weigh up these costs against the amount of the claim that you are making to ensure that it is worthwhile for you to proceed.
Your Insurance Broker
If you purchased your insurance through a broker, you will find that he/she is a valuable resource at the time of claim.
Not only should your broker be conversant with the policy that you have and the terms and conditions that apply, your broker's first duty of care is to you, so you should reasonably expect your claim to be dealt with much more efficiently than if you were to handle it on your own.