The Claim and the Insurer: Perception Does Not Always Equal Reality

More than half of the survey respondents had not been through a property or business interruption claim greater than $1 million.

By ALLEN MELTON, a partner and the Americas Leader of Ernst & Young LLP's Insurance Claims Services group; and RYAN PRATT, a senior manager in the Insurance Claims team. Together they have more than 30 years of experience assisting companies to measure, prepare and resolve complex claims resulting from catastrophic loss including property damage and business interruption loss.

The quandary facing many policyholders that have never experienced a significant loss is predicting how a multimillion dollar claim will affect their relationship with their insurance carrier. Will the bond that was forged when the insured was paying in money remain resilient now that they have to take out money?

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These are real concerns for the inexperienced. Too often insurance is considered a necessary evil to "bail us out" when the sky actually does begin to fall rather than a financial tool to mitigate risk and compensate insureds for real loss. Large, complex claims can be intimidating. The thought of potentially damaging a valued relationship--or worse, losing your coverage because of a substantial claim--is a worrisome scenario.

But should it be? According to the survey, the answer is decidedly, no. The overwhelming majority of respondents who had claims, regardless of size, indicated that the relationship they had with their insurer was not adversely affected; in some cases it even improved after the claim settled.

Property and business interruption claims are complex and typically a trying experience. However, they are also an opportunity to draw upon a valuable asset--the relationship with the insurer and the coverage it affords--to restore the business, recover the loss and resolve the claim successfully.

May 1, 2010

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