Who Determines Coverage At The Time of A Claim?
What’s the one question every insured wants answered when they report an insurance claim?
If you answered “Am I covered?”, you win.
You’re probably used to seeing commercials where a claim rep pops in immediately and says “don’t worry, you’re covered.” Everyone is happy and the insured goes on living their life with sunshine and rainbows. If only the real world were so manufactured.
The best way to figure out “am I covered” is to determine who makes that call.
Who Doesn’t Determine Claim Coverage
Start with you; obviously, you’re not the answer, because you’re asking the question. If you knew for sure if you were covered for a claim, you wouldn’t ponder it. If you are not in the insurance field, you may also think an insurance policy is 100 pages of legalese nonsense. Hell, even if you ARE in the insurance field, you might think that.
Move on next to your insurance agent, whom you call after the incident occurs. This might be the first person to whom you turn after your loss. Naturally, the expectation is that they will know whether or not you are covered. The problem is that they are obliged not to speak on behalf of the insurance company in these matters.
If, for example, your agent told you that you were covered for something, but the insurance company says no, that would be a mess for the agent. In an extreme situation, it could result in an Errors and Omissions claim against the agent or losing the account. Your agent can, however, remind you of your duties in the event of a claim, which include cooperating with the insurance company.
Please keep in mind that if you have an independent agent, they are not to be confused with the insurance company. An independent agent is not owned by the insurance carrier. They have a contract to feed business to the carrier, but are not the carrier themselves. Some insureds don’t know where the agency ends and the insurance company begins.
Ultimately, the agent can’t say off the bat that there is coverage. Maybe there are facts or circumstances they don’t know. I once had a claim as an agent where based on how the insured explained it to me, it sounded like there would be coverage. As it turned out, the insurance company did their investigation, and there were facts of which I was not aware on Day 1. Those nuggets of information made it a clear-cut case of a denied claim. Your agent shouldn’t say there’s coverage without all the facts, and they can’t.
Furthermore, as if we needed to make this clear, the person you speak to at the insurance company to report the claim can’t answer your question, either. Most of the time, these are people in a phone bank gathering basic information. They will not be the company representatives investigating the loss.
The Bottom Line
The person who will answer “am I covered” is the claims representative of the insurance company. He or she will compile all the information they need, analyze the policy for coverage and exclusions, and make a detailed determination. It’s not necessarily a brief process, but the company has to be thorough.
Do not feel as if you can’t reach out to your insurance agent when a claim occurs. They can tell you the next steps and what you need to do, but they can’t write you the check or guarantee you that the insurance company will.