Editor’s Note: The following article represents Part 1 of Claims’ exclusive series in which
we chart the progression of a claim from beginning to end. Be sure to look for the second
installment in the upcoming January, 2014 issue.
As a light turns green, a driver, whomwe’llcall Bob, proceeds into the intersec- tion. Moments later, Bob
is broadsided by another car, becoming
one of the more than 5 million traffic
accidents reported in the U.S. each year,
according to National Highway Traffic
Safety Administration (NHTSA) data.
Fortunately, both Bob and the other
driver carry automobile insurance. They
exchange information, and each begins
the process of filing an insurance claim.
This article, the first of three, follows the
path that Bob’s claim will take during the
Now Bob’s first step is to contact his insurer, thereby creating a first notification
of loss (FNOL). In this case, he reaches a
call center. The information he provides
and the evidence the call center representative gathers will have a direct impact on
the outcome of the loss. For Bob’s insurer
to resolve his claim, the representative
must complete the investigation by ascertaining coverage, as well as the extent of
the damages and liability. The representative asks Bob a few questions, adding that
an adjuster will be in touch shortly.
Everything that happens, from the
FNOL onward, will determine how
quickly and cost-effectively Bob’s claim
is settled and ultimately how satisfied Bob
is with his insurer. Although this should
be a straightforward process, it is pre-
cisely at this point that a number of costly
things can—and often do—go wrong.
What Can Go Wrong?
One of the key problems in the FNOL
process is that not enough information
is gathered. Typically, the call center rep
merely records the facts of the loss and
hands off the claim to an adjuster. By failing to complete the proper triage, the rep
may make inaccurate assumptions. In
Bob’s case, the assumption has been made
that his car can be repaired. As a result,
the vehicle has been misrouted to a body
shop. In actuality, his air bag deployed,
and the car is a total loss.
A Day in the Life of a Claim:
The Initiation Phase
FNOL Sets the Stage
By Vidya Dinamani and Paul Rosenstein