By Kelly Yates, Vice President of Claims for Topa Insurance Company
What did Founding Father (and purported hemp enthusiast) Ben Franklin mean when he said, “lost time is never found again”? Well, it’s one of those wise-sounding phrases that can apply to many situations, so who knows for sure. For me, it’s an invocation to action: Don’t wait! Act now! What does any of this have to do with insurance? Well, it turns out that timely action is critical when you experience a loss. Stick with me for a brief and hopefully entertaining explanation, and I’m certain you will see that time is of the essence when it comes to insurance claims.
An insurance policy is an agreement between you and the insurance company. Every policy contains a section that describes what you must do when a loss occurs, including that you provide the insurance company with “prompt notice of the loss” (or similar language). While this directive is part of the agreement between you and the insurance company, frankly I think this dry contractual language is the least interesting reason why you should always report a claim or potential claim right away. The best reasons have more to do with why you bought insurance in the first place and what’s in it for you.
“Time Is (not) On My Side”
The Stones sang about being patient and waiting for a girl to come around. I can tell you with great certainty that insurance claims do not get better with time. The sooner the insurance company can start the investigation, the better chance we have of reducing the costs of the claim – both for us and for you. Time is not on our side because:
- Damaged property may continue to deteriorate
- Evidence can be lost, destroyed, or discarded
- Memories of witnesses or employees can fade
All of these factors can increase the cost of an insurance claim. Now, you may be saying to yourself, “well that’s the insurance company’s problem.” True – you bought an insurance policy to pay you when you have a loss. However, I would argue your relationship to insurance is really a partnership. You want to protect against some of the risks that your business faces. Part of how you do that is buying insurance, thereby becoming our partner in protecting your business. By not reporting a claim in a timely manner you’ll make yourself look like a less reliable partner. In short, it’s in both of our interests to act quickly and we’re counting on you to “tag us in” right away so we can get started.
Writing Checks You Can’t Cash
Here’s another reason you’ll want to report a claim right away. Let’s say you experience a water leak that causes damage, mold growth, etc. You want to get your business back up and running so you start repairs. Later, you decide to also turn in an insurance claim. The problem with doing things in this order is that you haven’t given the insurance company the chance to investigate and to help you understand what is covered and what might not be covered. By voluntarily making payments, you run the risk of committing to payments that won’t be reimbursed by your insurance.
You paid for the insurance, so why risk not getting reimbursed due to a delay in reporting the claim? Don’t get me wrong – the insurance company wants to and will be happy to pay you for a covered loss. However, if you don’t involve us at the beginning, you might end up writing a check that we won’t cash because we didn’t have the chance to approve the costs. Remember, it’s a partnership! In order for it to work well, we need to be working together.
What Have You Got to Lose?
Is there a reason not to report a claim (and report it fast)? I can’t think of one. You’re not sure if it’s covered? No problem – I’m not sure if it’s covered either until we see the claim and start investigating. You’re worried your premiums may go up? Well, maybe, but you’ve bought the insurance, and now you’ve had a loss. Seems to me you should turn in the claim.
So, what do you have to lose if you don’t turn in a claim in a timely fashion? Well, you’ve been reading this far, so I’m sure you’ve got a good idea for all the reasons I’ve outlined above.
Thank You For Your Time
I hope you’ve found that reading this article was time well spent. I also hope that you don’t have any claims and never need to call us. However, if that loss ever happens, just make sure you call right away!