Principles of Risk Management and Insurance, 13th Edition

Claims Settlement

Every insurance company has a claims division or department for adjusting claims. This section of the chapter examines the basic objectives in adjusting claims, the different types of claim adjustors, and the various steps in the claim-settlement process.

Basic Objectives in Claims Settlement

From the insurer’s viewpoint, there are several basic objectives in settling claims.4

• Verification of a covered loss

• Fair and prompt payment of claims

• Provide personal assistance to the insured

The first objective in settling claims is to verify that a covered loss has occurred. This step involves determining whether a specific person or property is covered under the policy, and the extent of the coverage. This objective is discussed in ...