Prompt Claim Reporting: Why It’s Important to Report Your Claim Quickly
Reluctance to report an insurance claim, whether it’s a homeowner, auto or another type of insurance claim, could hurt you in the end. Prompt claim reporting allows your insurance company to act swiftly.
This is good news for you as studies indicate managing claims promptly costs less when all is said and done. In fact, Risk Control Online reports that the sooner claims are managed, the less they cost, indicating a direct relationship between prompt attention and lower costs.
Why is it Important to Report Claims Promptly?
Claims come in all shapes and sizes. It’s easy to see why reporting a pipe burst immediately is critical. Until the pipe is repaired, water will continue to cause further damage to the property. The more damage water causes, the more it costs to repair the damage. The need for prompt reporting in this instance is pretty obvious.
When it is a liability claim, many people are reluctant to report them. Often out of fear. The problem with that is the possible loss of important evidence that could help solidify your defense. The more time that passes, the easier it becomes for details to grow fuzzy or witnesses to be coached. This is bad news for you.
Many people hope these types of claims will go away or dismiss them as nuisance claims. If you don’t have the appropriate time to mount a strong defense and gather evidence, though, it becomes more difficult to show a clear picture of the events as they occurred. This places your chances of winning your claim in jeopardy.
Here’s where it gets real for you.
If you fail to report claims promptly, you could be in violation of your policy and may result in your claim being denied for coverage by your insurance company. Adjusters International reports that this is one of the most common reasons for denials in property damage claims.
Why Do Insurers Want the Extra Time Prompt Reporting Provides?
We’ve already discussed some of the reasons insurance companies prefer prompt claims reporting. They include the loss of evidence, lack of information, and the potential for further damage. But there are other reasons timely reporting is essential as well, including:
- Affords insurance companies the opportunity to consider third-party responsibilities.
- Provides the opportunity to build rapport and display empathy for the injured parties (which may help to reduce settlements).
- Offers insurers opportunities to thoroughly investigate the claim and the circumstances surrounding it.
- Allows for claims to close more quickly. According to the National Council on Compensation Insurance, that the lowest median costs per claim occur when injuries are reported within one to 14 days of the damage taking place.
- Results in earlier hearings to facilitate swifter returns to work in the case of workers compensation claims– costing businesses less money.
- Gives insurance companies more time to investigate the potential for fraudulent claims in the case of worker’ compensation claims, for example.
Then there is the additional, personal benefit, for reporting a claim promptly, especially if it involves injuries to another person. It helps you protect your reputation by responding quickly to the claim.
Proper insurance is crucial for you and your business. No matter how large, small, inconsequential, or fraudulent you believe the claims to be, reporting them promptly can save you a great deal of money, reduce the risks of having your claim denied, and ensures you have access to evidence for your defense that might otherwise have been lost. You want your insurance to work for you when you need it. Prompt reporting of claims gives your insurance company the best opportunity to do just that.