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Explain the Claim Settlement Process in Fire Insurance

  • Author :
  • TATA AIG Team
  • Published on :
  • 15/04/2024
  • 2 min read

Fires can cause extensive damage to property, leading business owners to require financial assistance to get back on their feet after such losses. This is where a fire insurance policy can be helpful, as it is designed to protect businesses from such major losses.

However, there are many factors when it comes to identifying a good fire insurance policy. One such factor is an easy claim settlement process.

In this blog, we will talk about the claim settlement process in fire insurance and what you can expect when you file a claim under your fire insurance policy.

What is Fire Insurance?

A fire insurance policy is designed to protect the insured property or business against various perils such as fire, earthquakes and more. The policy provides compensation to the insurer against damages and losses for the repair and reconstruction of the insured property.

However, to get compensation, the insurer needs to go through a claim settlement process. Insurance providers design this process to recover the amount for damage and loss caused by perils mentioned in the policy.

The coverage and claim settlement amount of a fire insurance policy may vary depending on the type of policy purchased and its terms and conditions.

Procedure for Settlement of Claims in Fire Insurance – Steps Involved in Fire Insurance Claim

The claim settlement process in fire insurance involves various steps. Let’s examine them in detail.

Step 1: Estimate of Losses

The very first step to initiate the fire damage insurance claim is to estimate the losses and the extent of damage to the property caused by the fire.

Policyholders need to revisit the damaged site and collect the proper evidence of the damage caused by the perils. This can be photos, logs of lost inventory/stock, etc., It is best to keep track of all the losses before intimating the insurance provider.

Step 2: Intimate the Insurance Company

The next step is to inform the insurance company about the incident. Every insurance provider has a time limit for reporting the incident or accident after it occurs.

It is an essential step in approving or rejecting a claim request. Failure to report an incident within a time frame can lead to claim rejection.

Step 3: File a Claim Request

After intimating the insurance provider, the next step is to file a claim settlement request by visiting the insurer’s website. Policyholders need to fill out the fire insurance claim settlement form with details about the incident, such as date, time, losses, etc.

Along with the form, policyholders also need to provide necessary support documents such as FIR copies of incidents, evidence, policy copies and more.

The policyholder needs to file the claim request within the stipulated time frame. Delay in filing a fire insurance claim request may lead to rejection.

Step 4: Claim Assessment and Loss Valuation

Once the claim request has been submitted to the insurance provider. The company will assign a surveyor to assess the damaged site for the loss evaluation. The surveyor will verify the extent of damages and verify whether your claim application is admissible.

The job of the surveyor is to present an impartial report about the incident to the insurance company, and based on that report, the insurance company accepts or rejects the claim request.

The surveyor may need documents or evidence to verify the claim request. Policyholders need to cooperate with the surveyor in questioning or documentation.

Step 5: Review Policy Terms and Conditions

After receiving the report from the surveyor, the insurance company will verify the policyholder’s policy terms and conditions.

The policy has details about the coverage limits, inclusions, exclusions, deductibles, etc., that can affect the claim settlement amount.

Step 6: Claim Settlement Offer

After verifying the document and everything, the insurance company will make a claim settlement offer to the policyholder as per the policy conditions.

Step 7: Negotiation (If Required)

Once the insurance provider makes the offer or compensation amount, policyholders need to decide if they are happy with it.

If the policyholder is not happy with the settlement, they can negotiate with the insurance company. However, they need to present proper documentation and evidence to support their negotiation request.

Step 8: Acceptance of Claim Settlement Amount

If the insurance provider and policyholder settle on the amount, then the offer is made to the policyholder. The policyholder needs to accept the offer to initiate the release of the claim settlement amount.

Step 9: Issuance of Claim Amount

After the approval, the insurance provider will release the decided claim settlement amount to the policyholder for the repair or reconstruction of the damaged property.

Step 10: Claim Closure

Once the policyholder receives the payment, the settlement request is closed by the insurance provider.

Documents Required for Claim Settlement Process in Fire Insurance

  • Authorised insurance or policy document.

  • Duly filled and signed claim form.

  • Newspaper clip of the accident or fire incident.

  • Evidence photographs of the incident site.

  • Copy of first information report (FIR).

  • Copy of fire brigade report.

  • Former claim history, if any.

  • Forensic report if required.

  • Initial investigation report for the cause of the incident.

Tips for Settlement of Claims in Fire Insurance

Policyholders must submit a fire insurance claim on time to get the claim settlement amount. Below are some tips that help in the settlement of fire insurance claims.

The very first tip is to inform the insurance company as soon as possible about the incident. This one step will smooth the whole claim settlement process.

Further, it is essential to document everything. Policyholders need to have a list of damaged or lost items.

Another crucial tip is to get the right repair estimate for damaged property. It is best to hire an expert to determine the exact cost of rebuilding the affected site.

Proper documentation is essential for getting a claim amount on time. Any discrepancy in documentation can lead to a claim request rejection.

Do not forget to inform the respective government authorities about the incident. A first information report needs to be filed by the policyholder in their police station. Further, the fire brigade needs to be informed about the accident that caused the fire.

Another crucial thing is to pay the fire insurance premium on time to avoid rejection of claim requests. Insurance companies also consider the timely payment of premiums when assessing the claim request.

Lastly, suppose the policyholder is not happy with the claim settlement amount offered by the insurance provider. In that case, they can consider hiring a public adjuster or litigator to do the settlement on their behalf.

Policyholder Rights In Fire Insurance Claim

  • When it comes to the claim settlement process in fire insurance, the policyholder has several rights, which are listed below:

  • In case of fire accidents or covered peril, the policyholder has the right to file a claim with their insurance provider. While filing an insurance claim, ensure proper documentation to support the claim request.

  • Further, the policyholder has a right to receive a fair settlement amount from the insurance provider. The offered settlement amount should cover the repair cost of loss or damage.

  • If the insurance provider has rejected the insurance claim request, the policyholder has the right to appeal the decision. They can provide additional documentation and evidence to request insurance providers to review their decision.

Conclusion

Incidents like fire, burglary, etc., can cause great loss to business owners. These incidents are not only financially draining but also emotionally challenging; that’s why various business insurance plans, such as fire and burglary insurance, are available in the market.

The plan offers financial assistance to business owners against various mishaps. However, knowing the terms of the fire insurance policy is not enough. Businesses should assess the claim settlement procedure to get a well-rounded review of how the policy will operate post-purchase.

Tata AIG is a reputable insurance provider that offers cost-effective fire insurance plans.

FAQS

Can I make an online claim for fire insurance?

Policyholders can make online and offline claims in fire insurance based on their insurance provider options.

What to do if the settlement of a claim in fire insurance has been denied?

If the fire insurance claim request has been rejected, the policyholder can appeal the decision.

Is the fire insurance claim process easy?

If the policyholder maintains proper documentation, the claim process in fire insurance is very easy.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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