The Importance of a Solid Claims Process


Insurance isn’t just all about the SALE! It is however all about relationships and a client’s claim experience will create a long-lasting impact and impression of that relationship, either as a positive or as a… I will probably be looking for another agency soon. This is truly where the rubber hits the road and it is vital your agency has a game plan and a consistent and methodical approach!

Keep in mind that any issues that arise during a claim’s experience can leave your clients with a bad opinion of you and your agency! Even if you have no control in the matter. After all, your client came to you because they needed to protect their assets and you won them over with how great your agency is along with the value you bring. If something goes wrong, they may ascribe their frustration with the carrier to you…remember you did recommend this carrier in the first place. With all this being said, you must not underestimate the role you can play and the impact you have on helping the claims process go smoothly for your client and winning major points and even referral business, not to mention the potential of a long-term client.

The path for good service is clearly marked for a captive agent. The insurance company they work for instructs them on how to handle a claim. For the independent agent, things can get a little murky because every carrier has a different philosophy and follows different procedures. That said, you can still manage your client relationship by following and implementing these main steps within your agency:

What You Should Have in Place Prior to a Claim Even Being Filed

  • Right from the start it all beings with making sure your entire Sales staff is able to educate your clients throughout the sales process by making the immediate distinction that insurance is not a commodity! It is not a one-size fits all or the lowest price wins, because all coverage options are NOT the same and the coverage selection can have a long-term impact on the wellbeing of your client’s future. What your client is, in fact, buying and entrusting you with, is a policy to help protect their assets, loved ones and help mitigate their exposures and risks. Make sure your agency and all sales producers are trained not to just sell on price, but to give good counsel and advice, as it relates to your insured’s unique risks. This requires a mindset of you are not just selling on price alone, but rather that it is your agency e truly interested in providing coverage options that are in your client’s best interest.

In addition, make sure a part of your sales processes consists of ALWAYS going over the coverage that your insured has elected NOT to take. (Some agencies provide coverage rejection forms, which may include, Earthquake, Flood, Underinsured Motorist, Rental Car, Towing, Comprehensive and/or Collision, including lower limits).

Make sure there is someone in the agency who is assigned, trained and is responsible for your agency’s claim process. This means they are following a step by step process, which includes everything from start to finish. Make sure they know how to file a claim with each respective carrier and their process. They need to have a full list of contact numbers and be able to properly direct your clients to the right claims departments and provide claim numbers and provide your client with a claim number. A key function will be to make sure the claims process is moving forward and to make sure your clients have a proper expectation of what happens next! This means they will need to be able to know:

 How to:

  • Respond to an insured who wants to file a claim, (providing empathy, active listening skills)
    • Educating your clients on when it makes sense to file a small claim, (but NEVER implying they should NOT file, this decision is up to them), but you can provide them with how a claim can and most likely will impact their future rates, loss of discounts, surcharges, etc. so they can make an informed decision. AGAIN, NEVER RECOMMEND THAT THEY DO NOT FILE, ALWAYS LEAVE THAT DECISION UP TO THEM.
    • Helping them understand the entire claims process
    • Include, “What’s next and timeline, ALWAYS set proper expectations
    • Explain your role and how you are there to help them, but the actual claims processing is handled by the carrier, but you will act as a liaison and on their behalf.
    • Let your client know that you are here to assist if a problem should arise and make sure FOLLOW UP is included in your process, making sure the claim is moving forward, letting your client know when additional information is needed and addressing their concerns. Making sure all claims are closed and getting feedback from your client on their claims experience.

IMPORTANT Things to keep in mind

Make sure your staff is trained to correctly identify CAT claim losses by this I mean that they are able to correctly identify a correct CAT loss date when filing. If not, this will adversely impact your loss ratios, (As with most carriers CAT losses are not counted against you). This will have an impact on your Profit Sharing or PMSF if claims are not reported correctly.

In addition, if you do not monitor open claims, this will also impact your PMSF, as an open reserve – (the amount of money a carrier has initially set aside to payout on a claim) can be higher than the actual amount paid out. This is why you will need to make sure claims that are outstanding are closed. Once closed the reserve amount is then reconciled with the actual amount paid out.

Make sure you have an internal process that is monitored and adhered to. Making sure your sales team is properly underwriting the risk PRIOR to binding. Writing bad business or not having a set procedure to pre-underwrite your business leads to high loss ratios, loss of revenue, angry customers, wasted time and energy.

Below is an Example of a Claims Process:

Personal Lines Claims Procedures:     Activity – ACCOUNT MANAGER/PRODUCER:

1           Receives verbal or written claim information

             a.          From insured

i.           Enter information in Agency Management system claims screens

ii.          Counsels insured on claim information, handling and desire/recommendation to submit

•           Deductibles applicable

•           Possible scenarios/examples of the claim process

•           Refer to preferred vendors if applicable

             b.          From third party/another carrier

i.           Enter information in the Agency Management System claims screens

ii.          Contact insured for confirmation of loss and desire to submit

iii.         Counsel insured on claim information and handling

•           Deductibles applicable

•           Losses covered/excluded

•           Possible scenarios/examples of the claim process

•           Refer preferred vendors from referral list in S:/ Drive > Personal Lines if a client asks

             c.          From insurance company direct (Insured called into the carrier)

i.           Enter information in the Agency Management System claims screens

•           most now come through downloads

ii.          Close the claim in Agency Management system, the same day 

1           Submits claim onto company – same day info received within 24 hours

•           Catastrophe Claims

i.           Recommend insured call in directly to company

ii.          Prep insured with info they will need to provide

iii.         Provide the insured with company’s claim number to call and policy number for reference

•           Call into company

i.           Enter claim information into the Agency Management system same day

ii.          Close claim in Agency Management system same day

•           Online

i.           Enter claim information in Agency Management system same day

ii.          Close claim in Agency Management system same day      

2           Send Claim confirmation email sent to insured            

•           See Signature Lines    

3           Enter claim number and adjuster info into Agency System as available    

4           Notify the Producer of claim – once it filed

•           If major (large) loss/catastrophe

i.           Fire

ii.          Theft

iii.         Water

iv.         Death

v.          Multiple Vehicle Damage (more than 2 cars)

•           Potential claim declination

•           Note If claim may need special handling

5           Assist insured with claim communication and processing as needed

6           Attach claim documents as received – mainly done by Processor

•           Adjuster assignment

•           Coverage notifications from adjuster

•           Claim payment/settlement

•           Closed claim notifications   

Note: Some companies require claims to be filed within maximum 6 – 12 months after the time of loss.  If filing past that period get an explanation as to why delay in filing for company consideration. Make sure you identify all Cat claims, if it was a big weather event, make sure the date you choose is the right date, as Cat claims in most cases will not count against your Loss ratios.

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