Taking the uncertainty out of insurance claims

04 November 2015

Insurance can take many forms. Throw an umbrella in the car just in case - you don’t need to use it now, but you’ll be glad you have it when it starts to rain. Insurance for yourself or the things you own is just the same. And if you do need to make a claim with your insurance provider the last thing you want is not getting the payout you think you should get.

The good news is that the majority of claims for insurance are paid out by insurance providers. Insurance and investment provider AMP has a claims payout rate for life insurance and home, contents, car insurance that sits around 97-98%. But with such a large number of claims submitted to all insurance providers each year, there’s some that aren’t paid in full or even declined altogether.

Here are a few tips to give you the best chance of getting a payout should you ever need to claim.

Make sure items of value are specifically listed and valued.
When it comes to contents insurance, make sure you specify certain items such as jewellery, or even a new road bike which can be quite expensive. If they’re not detailed and the real value isn’t given then making a claim for them will be limited to the value that’s specified in your insurance policy. That could mean getting a claim payment of $3,000 for an item of family jewellery that was probably worth closer to $6,000, but was never specified.

Know what you’re covered for.
Policy documents aren’t the most exciting documents to read, but they are important. Make sure you’ve read and understand your policy. There will be specific exclusions in the policy meaning those can’t be claimed on, especially if they’re not caused by unforeseen and unexpected events. This could be something like gradual rust on a car or deterioration of an investment property.

Be upfront with your insurance provider.
A classic example of this would be mum and dad buying a cheap second car for the kids. They get it insured but only tell the insurer that they are the drivers. As people under 25 aren’t covered (i.e. the kids), they could crash and leave the parents faced with a hefty bill. And keep your insurer aware of any changes as the policy comes up for renewal each year.

When it comes to health or life insurance, it’s really important to complete the policy declaration correctly. Your insurer has the right to decline your policy at claim time if they discover that certain information wasn’t disclosed, which may mean losing out on years of premiums that you’ve already paid. If you’re not sure, it’s always better to tell your insurance provider.

Keep your payments up to date.
If you can, pay your premiums on a regular basis such as automatic payments each fortnight or month. It makes sure you stay on top of your payments. If you don’t and fall behind then you may not be covered if something happens before you can get back up to speed.

These can help you make things easier for any claim you may need to make in the future. If you’re still not sure, have a chat to your financial Adviser or insurance provider and they should be able to answer any questions you might have and make the claims process as easy as possible.

The claims process

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Important information

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The content provided is intended to be used as information only and does not constitute financial advice. Before acting on any of the results provided, we recommend that you seek advice which takes your individual circumstances into account.