Claims Coverage Investigation (Property)

Read the Policy

To understand a first-party property policy of insurance, the adjuster must read and analyze the policy in a logical and thorough manner. The facts of each individual claim clarify and color the interpretation of the policy contract and bring different nuances to the policy wording. The adjuster must know what coverage is available to the insured, the limits of liability, the territory limitations, and the exclusions, conditions, and endorsements attached.

Before beginning to investigate a claim, the adjuster must first establish or confirm coverage. Many claims need not go forward if the coverage analysis discloses there is no coverage for the loss. Yet in many cases, the file handler proceeds only to find out later that there was not coverage at the outset.

To do this, he or she must get a complete copy of the insurance policy. The company’s copy usually has only a “declarations page” and partial copies of standard forms. However, the policy can be recreated from the declarations page and standard forms from the underwriting department. By viewing a current copy of the policy in the possession of the insured, or automated information on the insurer’s computer database, the policy coverage can be confirmed. The adjuster must also determine the policy limitations and determine the perils insured against. The adjuster must be familiar with each of the exclusions or exceptions from coverage.

Areas to consider in coverage analysis:

• Date of claim does it fall within the policy period?
• Location of claim - Does this meet the contract definition
• Listed Property - is this actually a property we insure
• Exclusions - is the peril excluded
• Endorsements - Is there an endorsement for this peril
• Person - Is the person we insured involved legally with the property
• Peril covered - do we have a covered cause of loss
• Conditions met - have the policy conditions been met or breachedand other peripherals

When handling property claims, the aforementioned list serves as a viable start. Depending on your best practices guidelines and claims investigation requirements, you may add more to this list