If you suffer a loss to your insured property due to an insured event, you need to follow certain steps in order to avoid any complications later during the claims process. For all three fire and allied insurance policies, namely, Standard Fire and Special Perils (SFSP), Bharat Laghu Udyam Suraksha (BLUS), and Bharat Sookshma Udyam Suraksha (BSUS), the claims process is as follows:
As soon as any loss, damage or destruction occurs to your insured property due to an insured event, you must immediately inform your insurer. This is known as the First Notice of Loss (FNOL), and marks the first step in the claims cycle. It usually comes before any formal or official claim, and following this the entire claims process is triggered.
The following details need to be mentioned in the FNOL report :
- Policy number
- Name of the policyholder
- Details of the event
- A brief statement of the loss
- Details of report to the police or any other authority
- Date and time of loss or damage
- Location of the incident
- Estimated amount of loss
In addition to the above, you should collect and preserve evidence such as photographs of the loss or damage wherever possible.
On receiving the claim intimation, the insurance company might depute an external surveyor to inspect & assess the loss. This would depend on the nature of loss & estimated amount of loss. The policyholder is expected to give full cooperation to the insurance company’s surveyor in order to ensure smooth processing & finalisation of the claim.
You must immediately report the event to the police, fire department or any other appropriate legal authority. The details and time of this report will be taken into consideration by the insurer during the claims process.
- In case of any damage due to fire, explosion, implosion or lightning, the local fire department must be immediately called.
- In case of land subsidence, landslide or rockslide, the district administration must be informed.
- In the event of impact damage of any kind, or riot, strikes, malicious acts, acts of terrorism, and theft, the police must be duly informed.
However, some insurers may waive the condition of an immediate report to a legal authority as a determinant during the claims process, if the insurer feels that such reporting was not possible due to extreme hardship experienced by the policyholder or any other person on their behalf.
You must take all reasonable steps to minimize the loss or damage to the insured asset. This can include prompt notice/report to legal authorities like the police or fire department, who can come in and assuage the effects of the insured event (be it fire, riots, strikes, or theft). The insurer will also take into account the security steps that were taken before the occurrence of the insured event- these can include establishment of adequate fire control systems, anti-theft devices, etc.
Additionally, you are not allowed to sell, give away or dispose of any damaged property or any items therein without the consent of the insurance company. You should also avoid carrying out any repairs, or washing and cleaning of any item, except for an urgent necessity.
You must submit the claim form to your insurer at the earliest opportunity and within 30 days from the day you first notice the loss or damage. The claim form must be duly filled in with details of any other insurance policy that covers the damage or loss for which you are filing the claim. The insurance company will not be liable for any loss or damage after 12 months from the occurrence of the insured event, unless the claims have been filed or are subject to arbitration of pending action.
In order to prove that the loss/damage was caused due to an insured event, you must present documentation that can support your claim. These documents can include plans, specification books, vouchers, or invoices pertaining to costs incurred for reconstruction/replacement/repairs to the insured property.
Adding to this, you should also assist the insurer and its representatives (surveyors, claims adjusters, etc.) in collecting evidence, taking measurements and samples, taking photographs, and inspecting information mentioned in the business’s books of accounts and relevant records.
Know more about which event will be covered by your Fire Insurance Policy here