Claims 101

Throughout our lives, we accumulate assets, such as cars, houses, furniture, jewellery and other personal belongings. Many people choose to take out insurance to protect their property from a potential loss. Should something go wrong, this allows them to make a claim with their insurance company.

When you suffer a loss caused by events such as fire, storm or theft, you may feel very overwhelmed and unsure of the next steps. The below will help you to understand some key terminology and guide you through the claims process.

Key Terms

Defined (insured) events

When you are making a claim, it means you have suffered an injury or a loss that is generally related to a defined event listed in your insurance policy.
These defined events are outlined in the insurance contract and are what the policy provides cover for. Common insured events include fire, flood, theft, explosion and earthquake.

Product disclosure statement

Your product disclosure statement, also known as a PDS, is a legal document you receive when you take out a policy that includes all the finer details of what your policy does and does not cover. It’s important to read your PDS as it outlines your rights and obligations if you have to make a claim, and it protects both you and the insurer.

Exclusions

Exclusions refer to circumstances and situations where a claim cannot be made. These exclusions are always listed in the PDS you receive when taking out an insurance policy. It is important you are aware of the exclusions under your policy when it comes time to make a claim or when deciding whether a policy is right for you.

Excess

Your excess is the amount you have to pay for each insured event should you need to lodge a claim. When taking out an insurance policy, you can elect your excess amount from a number of options. This excess can increase or decrease your monthly premium. In general, the higher your excess, the lower your premium.

What to do in the event of a claim

Once you have suffered a loss, it’s important to notify your insurance company so you can commence the claims process. The process involves answering a number of questions that will help the insurer gain a better understanding of the type of loss, how it occurred, the extent of the damage and what may need to happen to get you back to a pre-loss condition.

You may have a representative from the insurance company (such as a loss adjuster or a claims assessor) visit your home to assess the loss or damage.
The insurance company may request a form of proof of purchase such as a copy of a receipt, a bank statement, a photo of the item or a statutory declaration. This helps the insurer establish that you owned the item being claimed for and how much it cost at the time of purchase.

Your insurance company will generally look to get you back to a pre-loss condition. This could mean to repair the damage, replace the item, or make any appropriate payments to compensate for the loss.

To make the claims process easier, and hopefully much quicker, make sure you notify your insurer of a loss as soon as possible, take note of any important details and collect any necessary evidence or requested documentation. You should also ask questions if you feel you need to gain a better understanding of what is happening or what is required.

While an insurance claim can be overwhelming, it’s important to remember that your insurance company is there to help you during this difficult time.