To make insurance claims successful, policyholders must have comprehensive knowledge of policies, documentation, warranties, terms and conditions, and checklists which may vary from product to product. But most of them don’t possess it and in order not to be messed up, they always prefer to hire insurance brokers for assistance.
In accordance with the IRDA regulations declared in 2013, insurance brokers can offer consultancy to claims up to Rs 1 crore. These claims should not be based on policies which have been placed by any other broker. This is an unfamiliar but reassuring way for brokers to boost your income potential.
4 things every insurance broker must know about claim consultancy:
As per IRDA regulations,
- A genuine broker should assist policy holders on the right insurance cover, terms and conditions, and claim negotiations.
- A broker could not work as a claim consultant for a policy which has not been serviced through him.
- Potential holders usually don’t have much knowledge about claim settlements, particularly smaller policy holders. Consequently, the risk cover is relatively low if they are working with insurance companies who deliver biased knowledge and information. Hence, the authority has insisted brokers to offer more appropriate information to policyholders especially in the matter of settlement of claims.
- The authority has decided to ease the condition (which is mentioned in (2)) and permitted brokers to work on limited claim consultancy satisfying the following conditions.
- Insurance brokers or companies can offer consultancy for claims not exceeding Rs 1 crore, provided those claims does not originate from a policy that has been placed by any other broker.
- Before rendering consultancy, a broker should ask his client for a written mandate. It has to represent the client with the insurance company concerned for the claim for which the client seeks consultancy and broker delivers it.
- A broker can charge a fee for the above services based on mutual decision between the client and the broker. Anyhow, this fee will not be taken under claim percentage.
- A broker’s deal with such clients could be governed by the provisions of Code of Conduct.
- If there is any disagreement between two or more brokers emerging out of such consultancy, it could be considered by Insurance Brokers Association of India (IBAI). Then, the IBAI could put together all the disagreements and forward to the IRDA for final disposal.
Apart from the regulations, insurance brokers have to pay attention for actions like receiving the client’s documents, sending them to claim processor, reminding clients about queries (if any), responding to queries (if any), and many more. So, brokers must record all these actions to avoid missing any updates. Using a notebook or excel sheet is of no use because human minds are prone to making mistakes. Also, it gets harder with more claims. That’s why it’s highly recommended to purchase Sibro – No.1 Insurance Broking Software in India. This helps you track, follow up, and proactively get your claims processed in a seamless way.