Facing a community scheme claim event can be a stressful experience. To ensure a smooth process and maximize your chances of a successful insurance claim, it’s crucial for the owners concerned and the trustees and managing agent to understand the duties of the insured party. In this article, we’ll provide an insurer’s list of duties for the insured following a claim and provide guidance on how to fulfill these obligations effectively.
Duty to minimise and prevent further loss or damage:
When an event occurs that may result in a claim under your insurance policy, your first responsibility is to take all reasonable steps to minimise and prevent any additional loss, damage, or liability. This means doing everything within your power to mitigate the situation and prevent it from worsening.
Immediate notification to the police:
If the loss or damage is due to theft, attempted theft, malicious damage, violent disorder, riots, or civil commotion, it’s essential to notify the police immediately. Obtain a case reference number from them, as this information may be required during the claims process.
Timely reporting to your insurer:
One of the most critical steps is reporting a claim to the insurer as soon as reasonably possible. The insured (the owner or scheme) usually has a maximum window of 31 days after the event or occurrence to do so. Failing to report within this timeframe may result in your claim being rejected at the discretion of the insurer.
Accurate and detailed information:
When submitting the claim, one will need to provide full and accurate details of how the event occurred. It’s essential to assist as much as possible and complete any forms or documentation requested by the insurer promptly.
Third-party claims:
If a third party indicates their intention to make a claim against the scheme, the insurer must be informed immediately. Prompt communication can help the insurer address potential liability claims effectively, sometimes preventing a claim altogether.
Timely notification of incidents:
The insured (the scheme) should notify the insurer (insurance company) in writing as soon as they become aware of any incident or occurrence that might lead to a claim against them. Transparency and timely communication are key. We call this a claim intimation or first notification of a loss or potential loss (FNOL).
Providing legal documents:
If the managing agent or scheme receives a summons related to an incident, send it immediately to the scheme’s insurer. They need this information to assess the situation as accurately and speedily as possible.
Additional duties:
In addition to the duties listed above, it’s crucial to remember the following:
- Keep the damaged property intact to facilitate inspections by the insurer.
- Allow the insurer access to the property for inspections, as required.
- At the insured’s own expense, all necessary records, invoices, documents, information, explanations, and other evidence requested by the insurer for the purpose of investigating or verifying the claim, should be provided. This may include statutory declarations.
What not to do
To protect one’s interests and ensure a smooth claims process, refrain from:
- Making any admission of guilt or fault where third parties are involved.
- Offering or negotiating payment for a claim.
- Admitting liability for any incident.
- Authorising repairs or replacements of insured property without your insurer’s consent, except in emergency situations or when safety is at risk.
- Disposing of damaged items without your insurer’s consent.
Understanding one’s duties as the insured following a claim is vital to ensure your insurance coverage remains effective. By promptly reporting incidents, providing accurate information, and cooperating fully with the insurer, owners and trustees can navigate the claims process more smoothly. Remember, insurance is a partnership, and fulfilling one’s obligations as the insured is crucial for a successful resolution.
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