How Natural Disasters Affect Insurance Claims and What to Do Immediately After

 

In 2023 alone, the Emergency Events Database (EM-DAT) recorded a staggering 399 disasters related to natural hazards. These catastrophic events led to 86,473 fatalities and impacted the lives of 93.1 million people.

Beyond the immediate loss of life and property, these disasters also cause significant emotional and financial turmoil. Having an insurance policy and understanding the claimsettlement process is essential for converting potential chaos into manageable steps toward recovery.

This blog will explore how natural disasters affect insurance claims, common insuranceclaim-related issues, and the steps you should take immediately after a disaster to ensure a smooth claims process.

How Natural Disasters Affect Insurance Claims

When a natural disaster strikes, insurance companies are flooded with claims. This rush can lead to delays, misunderstandings, and even insurance claim-related issues. Knowing the claims process can ensure that your claim is processed smoothly and efficiently.

 In the case of Ansuya Prasad Sharma v. The Oriental Insurance Co. Ltd. and others, the complainant, Ansuya Prasad Sharma, faced a significant challenge when his insurance claim for damage to his hotel, "Hotel Devbhoomi," caused by a landslide and heavy rain, was repudiated by the insurance company.

The insurance company argued that the damage predated the policy, asserting that it started before the insurance was issued. However, the State Consumer Disputes Redressal Commission of Uttarakhand ruled in favour of Sharma, stating that the insurance company could not avoid liability after accepting the insurance premium and issuing the policy. This case highlights the importance of being vigilant about claim rejection-related issues and ensuring that the insurance company fulfils its obligations

What to do Immediately After a Natural Disaster

1. Contact Your Insurance Company Immediately: As soon as it's safe, reach out to your insurance agent or company. Determine whether the damage is covered under your policy, understand the timeframe for filing a claim, and verify if your claim settlement will exceed your deductible.

2. Keep a Record: Before starting any repairs, thoroughly document the damage. Take clear photos or videos and make an inventory of damaged items. This step is important in avoiding claim rejection and ensuring that your claim is processed easily.

3. Make Temporary Repairs: To prevent further damage, make necessary temporary repairs and keep all receipts. However, be cautious about contractors who may demand large upfront payments, as this could lead to claim rejection or inadequate repairs.

 4. Adjuster's Visit: An adjuster will likely visit your property to assess the damage. Be ready with your documented inventory, receipts, and other relevant information. Providing detailed records can boost the claim settlement process.

5. Identify Structural Damage: Carefully inspect your property for structural damage, such as cracks in walls or missing roof tiles. Make a list of everything to show the adjuster and consider hiring a licensed contractor to provide written bids for repairs.

 6. Keep All Documentation: Maintain copies of all documents you submit to your insurance company and records of your interactions. This can be invaluable if you face any claimrejection services.

Common Insurance Claim Issues and How to Avoid Them

 Many policyholders face insurance claim-related issues after a disaster. These can range from delays in claim settlement to outright claim rejection. To avoid these problems:

 ● Ensure All Documentation is Complete: Missing or incomplete documentation is a common reason for claim rejection.

● Understand Your Policy: Have a good read of the policy in detail including coverage limits, deductibles, and exclusions. This can prevent unpleasant surprises during the claims process.

 ● Consult a Subject Matter Expert: If you encounter difficulties, consider consulting aprofessional like Bima, who specialises in claim rejection services and can guide you through complex insurance claims.

Natural disasters are extremely unpredictable, but your actions don’t have to be. By being proactive and understanding the insurance claims process, you can reduce your financial burden caused by natural disasters.

If you find yourself overwhelmed or facing a claim rejection, don’t hesitate to seek expert guidance, who can provide the support and expertise needed to overcome the complex world of insurance claims.