What is CLAIMS MANAGEMENT?

 A claim refers to a formal request by the insured to the insurance company for coverage of loss as stated in the policy. In the occurrence of the insured peril, the insurer has a legal duty of indemnifying the insured party. However, there are processes that need to be followed for the insured party to qualify for the claim. These processes comprise what we call the claim management process. 

Claims management refers to the formal claims handling process that is undertaken by the insurance sellers. The following are the preliminary steps that the insured should follow in the insurance claims process.

On the occurrence of the accident, the first thing the insured has to do is to check if the policy covers the situation that they are dealing with, or whether they have multiple policies that cover the same thing. Keeping in mind the deadline for filing a claim (3 to 7 days), the insured should contact their insurer or connect with their broker who will help them navigate the claim filing process. The Insurance Broker has a professional duty of guiding the insured client through the insurance claims requirements and procedures to ensure that their claims are not only promptly paid but paid to their satisfaction.

The insured party should fill out the claim form that is a questionnaire to draw out the basic details about the occurred accident, injury, death, or liability; and attach all the necessary documentation. If a broker is helping, he shall guide the client to the necessary documentation needed, the provisions they are entitled to as per the contract, as well as contract terms that may limit some of the clients’ claim payable; and if need be, they can also file the claim for the client. The required attached documents vary from policy to policy and are quite situational, so the insured should seek guidance from the claims officer or their insurance broker.

After the submission of all the important documents, the claim investigation process begins. The claim officer hires/elects a loss assessor (in our market also referred to as loss adjusters), surveyor, or investigator, depending on the complexity of the case. The loss adjusters shall act as ears and eyes of the claim officer at the accident site in order to establish the proximate cause of the accident and the liability that falls on the insurer by figuring out the total loss suffered. After the investigation, the assessor, surveyor, or investigator will issue a report that will outline all the important details about the accident.

Claims assessment is the last step of the claims management process where the claims officer will review the policy, claim form, all the attached documents along with the report from the claim investigation process and conduct the damage evaluation. If the claim is approved, the claim settlement steps will be arranged, and an appropriate payment method will be devised. Claim payment is an amount payable to the insured under the policy to compensate for loss sustained. If the claim settlement is awarded, claim payments can be done through cash payment, repair, replacement (in case of total loss), or reinstatement as per the policy.

When it comes to healthcare insurance if the insured goes to a hospital that has not partnered with the insurance company and pays out of pocket, he can then apply for the reimbursement. Reimbursement is compensation paid by an insurance company for the out-of-pocket expenses incurred or overpayment made by the insured party. The reimbursement procedure involves submitting the filled claim form and attaching the originals bills, prescriptions, and receipts to the claim officer.

The following is an example of a motor accident claim process:

1. Notify the insurer/ broker upon the occurrence of the accident.

2. Take the picture of the accident.

3. Complete the Claim form.

4. Police documents to be attached

   1. PF 90 – Particulars of the road accident

   2. PF 93 – Vehicle inspection report

   3. Road traffic’s accident sketch map

   4. PF 115 – Final report (issued by the judge)

   5. PF 3 – If there are any injured third-party individuals

   6. Loss report (if anything was stolen)

5. Other documents to be attached: Drivers’ license, motor vehicle registration card and the cover note (policy).

6. Proforma invoice from the garage. Have them send to the insurer directly or deliver it through you.

7. The claims investigation process with loss adjusters.

   1. Loss Assessor who will issue the loss assessment report, or

      1. Internal assessor – for small types of claims

      2. External assessor – for large claims (beyond TZS 5 million)

   2. Loss Surveyor who will issue the loss surveyor’s report, or

   c. Investigator (if there is suspicion of claim fraud) who will issue the

   investigation report.

8. Damage evaluation (Claim assessment)

9. Agreed claim settlement

10. Repair authority

11. After repair.

    1. Release letter (insurer to the garage). The insured should pay the excess before taking the car.

    2. Satisfaction Note (from the insured to the insurer) – The insured will be given a 7-day trial period to test if the vehicle operates well. If any mechanical or electrical problem occurs during the time, the vehicle will be repaired without charges.

12. Invoice from the garage to the insurer.

13. Payments shall be arranged.

Claims management is a really crucial process for any insurance company as it is the way that the insurer fulfills their contractual duty to indemnify. When the insurer enters the contract with the insured, he promises to make good of any financial loss the insured may suffer within the scope of the contract. When such loss occurs, the insurer shall indemnify the insured fully or partially in the form of cash, repairing, replacing, or reinstatement. Insurers manage to indemnify all of the losses suffered in the pool through the pooling of losses where the losses of the few are spread over the group, and the average loss is substituted for actual loss. People judge the value of insurance by how quickly and fairly they handle claims.