We often talk about things you can do to prevent a claim, but what happens when you actually need to file a claim? How does the claims process work? Maybe you're wondering why your premium went up when you haven't filed any claims. Well, look no further because SIA is here to break things down!
How to file a claim:
First, should an incident occur, you'll need to login to your client dashboard on our website to file your claim. When using a computer/tablet, you'll see "submit a claim" on the righthand side of the screen. If you're using your phone, you'll want to scroll past the first set of tabs and current/past policies, then you should see "submit a claim."
Information needed to submit a claim:
- Injured party's information
- If you're submitting an Inland Marine (IM) claim, the "injured party" is yourself
- Accident information:
- The date of the accident
- A description of the accident
- Upload pictures/files
- This is optional, but the more information you include such as pictures or policy reports (when applicable) can help move the claims process along faster. You can also submit these documents directly to your claims examiner once they're assigned (more on that below)
After the information is filled out, click "save," and your claim will be submitted to Specialty Insurance Agency.
The claims process:
Once a claim has been submitted, we report it to the carrier, and then the insured is assigned a claims examiner (a disinterested third party). The claims examiner will then contact the insured to start their analysis. From there, they will determine the outcome, and if it's a covered loss, a check is cut to the claimant (whether that's our insured for an IM claim or a third party for a property damage/bodily injury claim). This is the process when a claim is not a lawsuit.
If there is a lawsuit involved, the carrier defends our insured, provided the lawsuit is for which something the insured is covered.
Why do you see premium increases when you've never filed a claim?
Each year when the carrier renews our policy, the insurance premiums are primarily calculated using two metrics: the number of members in a group, along with the amount paid out in claims the prior year. To keep premium costs low, claim reduction is key - but so is having a large enough group that our underwriter's risk analysis is accurate.
Let's talk about why claim reduction is key.
One of the many reasons we preach safe practices for preventing claims, is because the more claims there are, the higher our loss runs are. The higher our loss runs; the higher premiums will be at renewal. If loss runs are too high, then the entire program could be at risk of being non-renewed.
Loss runs look at claims that were filed/paid out as well as the cost of examining and defending a claim (the cost for a claims examiner's time and legal fees). So, if an insured is defended in court, even for something the judge rules shouldn't be paid out, tens of thousands in legal fees can still affect our loss runs.
Next, why does the size of the group (or total number of insureds) matter?
The law of large numbers is a statistical concept related to probability, and it's a factor underwriters use when determining our rates each year. Their risk analysis will become more accurate the more people are in a group - which means if there aren't enough people in a group, they can't accurately assess risk. If an underwriter determines they can't accurately assess risk, two things could happen: they could deny renewing our policy, or they could increase our premium prices.
Now for the million dollar question, why do you see premium increases when you've never filed a claim? Since everyone is covered by the same program, even if a person doesn't file a claim, they're still affected by the claims of everyone else. This is because you are all a part of the same program, and underwriters have determined the risk of this insuring class to have gone up. Even though premiums may go up because the group as a whole had claims, it is still less risk when it's dispersed among 7,500 people instead of just one person.
If you have any questions regarding the claims process or anything claims related, please feel free to reach out to our office via email or give us a call at 715-246-8908.
