Claimant – A party that makes the claim
Imagine a severe thunderstorm damaged your business property, causing extensive water damage. Your next step is typically filing a claim with your insurance company. But who exactly is the claimant?
TL;DR
- What a Claimant is: A claimant is the person or entity that files an insurance claim, often seeking compensation for a loss or damages.
- Why it matters in day-to-day agency work: For insurance agencies, understanding the role of claimants is crucial in processing claims and assessing risk.
- Common pitfall: Without clear distinction, claimants may wrongly assume the responsibility or role of the first party, the insured.
- Best practice for agencies: Maintain clear and consistent communication to guide claimants through the claims process.
What Is the 'Claimant' in Insurance?
Plain-language definition: A claimant is the individual or business that makes a claim on an insurance policy due to a loss they’ve experienced.
Technical definition: Claimants are typically found in the liability section of an insurance policy where they are presenting a claim for property damage or loss against the insured. This often varies by state and carrier; always check the specific policy form.
Key Related Terms to Know
- Insurance quotes: Estimated premium based on the information you provide about your risk profile.
- Insurance claim: Request by a policyholder or third party to an insurance company for compensation for a covered loss or policy event.
- Claims adjuster: Professions who investigate insurance claims to determine the extent of the insurer’s liability.
- Insurance carrier: The insurance company that underwrites the promised coverage, issuing the insurance policy and insuring the risks of policyholders.
- Coverage review: A comprehensive review of an insurance policy to understand the scope of coverage.
Common Questions About Claimant
Who can be a claimant?
A claimant can be a policyholder who has suffered a loss and is making a claim on their insurance policy. Alternatively, a third-party claimant might be someone who has suffered a loss and is making a claim on someone else’s liability policy. Say a customer slips and falls in a small business. The customer, injured and incurring medical expenses, could become a third-party claimant on the business’s commercial insurance.
What is the claimant’s role in an insurance claim?
The claimant’s main role in the insurance claim process is to present the claim to the insurance company and provide necessary details or documentation to support their claim. This includes providing evidence of loss and cooperating with the claims examiner through the process.
Can a claimant be an additional insured?
Yes, a claimant could also be an additional insured. For instance, in a commercial property insurance claim, a tenant (the claimant) who has suffered a loss and is listed as an additional insured on the landlord’s policy might make a claim following property damage.
Claimant vs. Risk Management
In the context of insurance, risk management deals with identifying potential risks and creating strategies to handle them. This differs from the role of a claimant, who acts after a loss has occurred.
Comparison Table
Comparison Area | Claimant | Risk Management
|
Primary use case | Filing a claim after a loss | Identifying and managing risks before a loss |
Typical exclusions | Excluded losses on the policy | N/A |
Who is most affected by errors | The claimant and the insured | Policyholders and businesses |
Common mistakes | Incorrectly filed claims | Inadequate risk analysis |
Real Claim Examples Involving 'Claimant'
Scenario 1: A homeowner whose property was damaged by a neighbor’s fallen tree becomes the claimant, filing a claim against the neighbor’s home insurance policy. The clarity of the tree’s health before it fell may affect the claim’s result.
Scenario 2: In a car accident where both drivers claim the other is at fault, both drivers could become claimants against each other’s liability insurance. Investigation by claims adjusters may dictate the claim outcome.
Scenario 3: A shopper slips on a wet floor in a grocery store and injures herself. She becomes a claimant against the store’s commercial liability policy, seeking compensation for medical expenses.
Limitations and Common Mistakes
- Misidentifying the claimant can cause confusion and delay in the claims process.
- Not understanding that claimants can also be additional insureds can limit access to coverage.
- Claimants may misunderstand their role and mismanage the claims process, potentially jeopardizing their claim.
How to Explain 'Claimant' to Clients
Personal Lines client: “I want you to understand the term claimant, should you ever need to make a claim. Simply put, a claimant is the person who makes an insurance claim. That could be you if you’re filing a claim on your own policy, like after a house fire, or someone else who might file a claim against your policy, like if someone slips and falls on your property.”
Small Business owner: “In the event of an accident at your business, such as a customer slipping and falling, the injured party becomes a claimant. They would file a claim on your commercial insurance policy seeking compensation for their injury.”
CFO or Risk Manager: “When managing risk, we must take into account the possibility of claimants. These can be third-parties making a claim against our policies in the event of a loss they believe we’ve caused, such as through a liability suit.”