Avoid These 10 Common Mistakes When You File Insurance Claims

If you’re a small business owner making an insurance claim, it’s important to look out for some common mistakes. We see the same mistakes made time and again when it comes to insurance claims, but while these errors are common and easily made, they can also have huge consequences for you and your organization.

To make sure you don’t make the same mistakes, read on and learn the 10 most common issues we encounter.

1) Not Notifying the Insurer

Let’s start off with a mistake we see all the time. When you go to make an insurance claim, it’s highly important that you make the claim immediately. Discovered that a laptop has gone missing? Make the claim there and then. One of your team has had a road accident? Make sure they’re okay… and then call.

The faster you act, the more likely you’ll be able to offer reliable and concrete physical evidence and potentially eyewitness testimony. These things deteriorate over time.

Not only that, but it is likely written into your contract that you should offer timely notice. Insurance companies aren’t okay with you decided weeks down the line that ‘actually you would like compensation’. If it’s a real issue, then act quickly. Apart from anything else, this will allow you to get back to normal operation as quickly as possible.

Note that you might be able to report your loss to claim to an insurance agent or broker instead. They can pass on the message and fill out any paperwork on your behalf. It doesn’t really matter how you act… just so long as you do act!

2) Poor Documentation

Companies deal with a whole host of paperwork all the time, and so you might expect that they would be good at this part of the process.

On the contrary though, poor record keeping has scuppered many an insurance claim.

Document all communications that you have with your insurer. Make a note of when each document was posted. Make copies.

It might seem like a lot of work right now, but in the long term it could save you a huge amount.

3) Poor Cooperation

It’s unfortunate, but a lot of companies will enter into their dealings with insurers with something of a bad attitude. Insurers deal with a lot of poorly organized, and even dubious claims, and so they have to be very strict with regards to what they will and won’t accept.

This can then rub clients up the wrong way, who have likely heard horror stories of companies not paying out and who feel entitled to get their compensation.

99% of these transactions go smoothly and insurance companies want to provide a good service. Just follow the guidelines (they’re there for a reason) and take the time to fill out forms properly. It will save everyone a lot of time!

4) Throwing Away Damaged Property

If you are claiming on your insurance for damaged property, then you will be asked to return that property to the insurer. This can catch many clients off-guard, which then becomes a problem if they have already thrown the item away!

This is a very common policy. So, if you only take one thing from this article, let it be this: hang on to your damaged items.

5) Not Informing the Police

If an item has been broken or stolen by a third party, then it is a crime. Therefore, it is actually an obligation that you inform the police. Not only that, but if fail to do so, then you may be in breach of contract.

This is always a requirement in the case of an auto accident. If in doubt, tell as many people as possible!

6) Paying Third Party Claims

Let’s say that a driver in your employ has been in a collision with a member of the public and caused damage to their vehicle and perhaps their health. It’s fairly common in this scenario for the victim to then ask if the driver (and thus your company) would like to pay for the damages in cash/via wire transfer.

While this might seem like a tempting way to avoid paperwork/higher insurance premiums, it is actually recipe for disaster. The reason for this, is that the other party might then take advantage of the situation by inflating the actual cost. Not only that, but they might be unaware of the full extent of the damage. Likewise, it doesn’t exactly look good for your brand that you decided to avoid official channels. It’s a headache, but it’s normally worth doing things by the book!

7) Not Checking Calculations

There’s no secret conspiracy going on here, but it’s always worth ensuring that your insurers have done their math right. They’re only humans and sometimes they mistake like everyone else.

Regardless of the quote you’re given, it’s worth obtaining estimates from experts regarding how much it would cost to repair or replace it. If necessary, be prepared to quibble!

8) Admitting Fault

It’s a big man who can own up to his mistakes. That said, it’s also a fairly foolish move from a business perspective. Not only is it unnecessary to admit responsibility, but you may find that once more details come to light it actually wasn’t your fault.

And in case your conscience is making this a tough one to swallow, keep in mind that liability policies will often actually prohibit policy holders from assuming obligation. So there’s that!

9) Not Following Up

After you’ve filed for the claim, don’t assume that everything will take care of itself and go smoothly from hereon out (when does it ever?). If you haven’t heard from the adjuster after a few weeks follow up with an email or phone call and ask for a progress report. Be proactive!

10) Not Reading the Policy

Perhaps the biggest mistake we see time and time again is a simple failure to read the insurance policy. You should know this document inside out so that you know what you’re covered and against and what you’re not. It will save you a lot of time and headache going forward!