Claims under a fire insurance policy should be reported immediately to the insurance company to ensure timely settlement of claims. Once the claim is intimated to the insurance company, you should give a brief description of the accident and mention the extent of loss or damage to the property.
Damage or loss to the property should be given on a tentative basis. Once the claim is intimated, the insurance company would give a claim reference number which should be used for all future communications with the insurance company regarding the claim.
Once the claim intimation number is available, insurance companies would deploy the surveyor to assess the loss or damage to the property. You are bound to act as uninsured and try your level best to mitigate the loss by moving the property to a safe place or using appropriate measures to reduce the loss.
Let’s look at the things that can be considered by you to maximize your claim settlement in case of the occurrence of an event:
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6 things that can help you maximize your fire insurance claim settlement
Report the claim on time:
The most important thing to do in case of a claim is to report it to the insurance company as early as possible. This way insurance companies could appoint the surveyor immediately to carry out the loss assessment. This action could benefit the insured and the insurance company.
For example, let us assume that there was a fire in your godown, damaging your property partially, but the smoke from the fire incident spread throughout the godown and is now attached to the unaffected property.
If you delay in taking measures to remove the unaffected property from the premises, it could lead to damage to the unaffected property. If the claim intimation is delayed, the loss could aggravate which would be rejected by the insurance company. In such cases, insurance companies may reduce the overall claim amount to be paid by stating these reasons.
Mitigate the Loss:
The other important thing to do in case of a claim is to strive to mitigate the losses. Insured should act as uninsured in case of a claim and take all possible measures to reduce further loss. For example, if your stock has caught fire, you should take all possible measures to prevent the fire from spreading to all the locations and aggravating the loss.
Since, the insurance company provides the costs incurred in this process, it is advisable to take all necessary precautions to reduce the extent of the loss. One should not have a lackluster attitude when it comes to taking loss prevention measures. Moreover, you should not think that it is ok to let the property get damaged as it is covered by fire insurance policy.
Engage professionals:
The other important way to maximize your claim settlement is to engage professionals such as surveyors and engineers to carry out the loss assessment. If you are not satisfied with the survey report of the insurance company, you could go for private surveyors to provide a detailed report and the possible claim amount that could be given by the insurance company.
If there are minor differences in your report and the one provided by the insurance company, then it is ok to go ahead with the claim settlement process. In other cases, where there is a huge difference between your report and that of the insurance company, you should share the report with the insurance company and request for an increase in the claim amount. Insurance companies may agree to this and both the surveyors would discuss the issue and arrive at a conclusion.
Submit original invoices:
The other thing to ensure at the time of claim settlement is to submit original invoices. To ensure timely settlement of claims, it is important to submit all the original invoices of the damaged items to the insurance company on time.
It is advisable to submit the original invoices at the time of taking the policy so that even if you lose the original invoices due to an insured peril, it would be easy for the insurance company to process the claim. If original invoices are not submitted, then it may result in the insurance company taking the market value of the product which might not as well be similar to the value you purchased.
Keep track of your expenses:
There is a provision in fire insurance policy to provide additional rent expenses in case of loss or damage to your property. The rent amount required should be mentioned in the proposal form before taking the policy and the house you take on rent temporarily after a fire accident should be almost equal to that of the amount mentioned in the policy. Since, the liability of the insurance company is maximum up to the amount mentioned in the policy, any extra amount should be incurred by the insured customer.
Negotiate the salvage value:
It is important to remember and negotiate the salvage value of the property damaged. Insurance companies would deduct the salvage value from the final claim amount and ask the insured to take over the salvage value which is the common practice in India.
It is actually the responsibility of the insurance companies to take care of the salvage but they would pass on the responsibility to the insured. So, it is advisable to negotiate the salvage value with the insurance company as they would reduce the salvage value and pay the remaining claim amount. The higher the salvage value, the lower would be the claim amount.
FAQs
When should I initiate the claim procedure in a fire insurance policy?
Claim process should be initiated immediately after the occurrence of an event in case of fire insurance. Early claim intimation would provide room to the insurance company to appoint surveyor and assess the extent of the loss.
What are my responsibilities in case of a fire accident?
As an insured your first responsibility is to intimate the insurance company regarding the loss and at the same time take measures to reduce the extent of the loss.
What are the Surveyors, Architects and Consulting engineer fees?
There would be a certain fee amount that would be incurred by you in case of a claim for activities such as surveying the damaged property, architects to plan the reinstatement and other consulting engineer’s fees for claim settlement.
How many days would it take for Fire insurance claim settlement?
Once all the required documents are submitted to the insurance company, then the process would take between 10-15 working days. Any delay from the insurance company side would result in payment of interest on the late payment of the claim amount.
How to decide the additional expenses of alternative accommodation in a fire insurance policy?
The additional expenses of alternative accommodation are the expenses that would be incurred by you in case of damage to the property due to an insured peril. You should calculate this value based on the type of house you require to accommodate you in case of damage to your property, rents in your desired location etc.
For more details on the tricks to maximize your claim settlement in case of a fire insurance claim, please book a call with Ethika insurance broking.
