How Do Insurance Claims Get Paid?
If you are in the unfortunate situation of having to claim on your insurance policy, you may be wondering how your claim might be settled.
Most insurance policies will give the insurer the option to replace or repair the damaged or destroyed insured property or offer a cash settlement.
Cash Settlements of Insurance Claims do not always benefit the insured party
In the event of a catastrophe involving a large number of claims, it is often advantageous to an insurer, to settle a claim by paying cash. This does not always benefit the insured party and can leave the insured exposed to increased repair or replacement costs, supply chain issues, and problems maintaining insurance coverage in the future. The insured may also forfeit some additional benefits which might otherwise be payable.
The Insurance Council of Australia has some advice in relation to homes and buildings that might be worth a read.
Generally, the insurer has the right to decide how they might settle your claim
Some key Insurance Claims takeaways:
- Within your insurance contract, it is almost always the insurer who has the right to decide how they might settle your claim.
- Seek advice from your insurance broker who can assist you through the claims process.
- They can advise you on what policy benefits (some are in addition to the sum insured on your buildings) might also be payable.
- They can assist to maximise the amount you receive.
- They can inform you why you are being offered cash instead of the other options available to the insurer.
- Make sure you are fully aware of the ramifications of your insurance going forward.
- A half-finished or damaged building is unlikely to be an acceptable risk to an insurer.
Seek advice from your insurance broker
Please ensure that you use the services of an insurance broker to guide you through the claims process and maximise your policy entitlements.
To find out more on how to get an insurance claim, check out our ‘3 Important Tips to know before making an insurance claim‘ article written by our Claims Manager, Darren Free