119258831One of the more challenging things that can happen during a claim rep’s day is to receive a “new” file on an incident that happened months and possibly years earlier, especially if it’s a liability file.

When it’s a small property loss, we can understand why it might have taken so long to file the claim. You thought that missing piece of jewelry would turn up (they often do). Or maybe you weren’t home when a storm occurred and didn’t realize it had hailed until a neighbor told you a couple of months later when you asked why he was having a new roof put on his home. Then there’s the time you turned on the AC for the first time that season and it was acting up, but you just believed it needed some maintenance…until your repairman told you it was hit by lightning. In these types of cases, late reporting usually will not hamper our ability to investigate, evaluate, and pay the claim.

But then there are the other times.  Like the accident where you were not at-fault, but there were serious injuries involved. Another insurance company contacted you and paid for the damage to your vehicle. Thankfully you weren’t injured. Your passenger went to an emergency room, and despite being a little sore wasn’t seriously injured. You may feel especially lucky, since one of the passengers in the car that hit you was taken from the scene by helicopter, and then admitted to the hospital in very serious condition.  But in your case, you see no reason to report the accident to your insurance company.  Everything is settled. Or so you think…

Six months later, you receive a letter from an attorney who represents that seriously injured party from the other vehicle. They allege you are partly responsible for the accident and urge you to have your insurance company contact them! In a panic, you contact your agent or company to report the claim. By now, the company’s investigation could be hampered due to the passage of time. Police markings made on the street at the time of the accident will probably no longer be visible. The details of the accident are no longer fresh in the minds of any witnesses, and other parties may now be represented by lawyers who will not allow their clients to give statements. An injured party might be swayed by knowledge of limits available to the responsible party and be grasping at any possibility of recovery from another source. Your passenger, who has been unable to settle his small injury claim with the other company is frustrated and uncooperative when your company asks him to assist in their investigation.

While it may have seemed there was no reason to report the claim when the accident occurred, keep in mind that your insurance policy outlines your duties in the case of a loss. Common provisions will include under those duties (often first) something like “Give prompt notice to us or our agent.” Failure to comply with your policy’s notice requirements, especially if the failure hinders or prejudices the company’s investigation, could jeopardize coverage which would otherwise have been available.

While we would like all claims promptly reported to us, regardless of how small, we understand there can be legitimate reasons for a delay, as mentioned at the beginning of the post. But whenever you are involved in an accident, even if it appears there is no way that anyone would believe that accident was your fault, it is best to let your insurance company know as soon as possible. You can save yourself a lot of grief down the road by doing so.

Have you ever had to report a claim well after the loss occurred?  How did the process work out for you?

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