The insurance industry has long been accused of making promises that it does not keep at the time of a claim. Customers are often under the impression that all eventualities are covered under their insurance only to discover at the time of claim that either the loss is not covered under the policy or that the cover is limited and does not compensate them to the full extent of the loss. With some understanding of the essential elements that go into the insurance contract, customers can avoid the commonly encountered pitfalls in dealing with insurers.
The following few pointers would help in enhancing the understanding on the part of the insuring public and ensure that they get their just dues when claiming under the policy.
At the time of purchasing / proposing for insurance:
• Complete disclosure of information pertinent to the subject matter of insurance.
• Previous Insurance History - Claims made, No Claim Discount in Motor policy, special discounts / conditions on previous policy etc.
• Always purchase insurance for the realistic value of the asset - Don't do any under declaration.
• Always ensure that your policy is in force and is renewed well in time without waiting for expiry in order to avail of continued benefits of uninterrupted coverage.
• Make it a point to acquaint yourself thoroughly with the coverage and exclusions of your policy and any special conditions / limitations mentioned therein.
During the duration of the policy:
• Inform the insurer of any material alteration to the subject matter - modification of vehicle or asset, any improvement effected to the asset, any property etc.
• Any change / transfer of ownership - most insurance contracts are personal in nature and hence a change of ownership is a material fact for the insurer.
• Additions to the list of insured items. At all times, the insured should exercise due regard to the safety of the property. The duty of reasonable care expects the insured person to act as though he is uninsured and exercise requisite caution. When claiming under the policy:
• Notify the insurer immediately upon the occurrence of a loss / the loss coming to your notice.
• Inform the appropriate authorities (Police / fire brigade) etc. immediately for their action.
• Take all reasonably necessary measures to minimize the loss / prevent further damage. Damage incurred in the act of minimizing the loss is covered under most policies.
• Provide a comprehensive and truthful account of the circumstances surrounding the loss so that the insurer can quickly decide on admissibility of the claim.
• Provide all necessary documentation and information as required by the insurer to quantify the loss / provide proof of repair / renovation etc.
• Protect yours (and thereby, the insurer's) legal rights against any Third Parties who may have been responsible for the loss.