Claims handling

What it means

Claims handling is the insurer’s process from notification to payment. It covers inspection, establishing the cause, assessing cover under the policy and calculating the amount.

Documents decide it, not conversation. Photographs from the scene, a police report for theft, repair invoices and proof of ownership carry more weight than any account of what happened.

The Slovak word likvidácia here has nothing to do with winding up a company: the insurer’s loss adjuster is its employee or contracted technician who assesses the damage, not a company liquidator. The injured party does not have to accept the adjuster’s estimate as final and, if the amount is disputed, can commission its own expert report.

How it works in practice

Report without delay and change nothing before the inspection. Keep a copy of everything sent to the insurer, including the list of damaged items with their purchase documents.

On property insurance a current fixed-asset register helps: without one the value of destroyed items is proven after the fact and the insurer works from the lower estimate.

In the accounts, the loss and the insurance payout are recorded separately: writing off the damaged asset or the cost of repair goes to expenses, the payout to income. If the claim is not settled by the balance sheet date but the insurer has confirmed the payout in writing, we book it as a receivable; if the amount is only estimated, an accrual is used.

What to watch out for

If the insurer declines or reduces the payout, it must give reasons. The policy, the terms and your own documentation are the ground to argue on, and often that is what decides the outcome.

By signing a settlement on the amount of the payout, the injured party often waives further claims from the same event. If hidden damage turns up later, for example in the wiring after a flood, an additional payment is hard to obtain. It pays to wait with the signature until the full extent of the damage is known, and to involve an insurance broker for larger losses.