The Importance and Necessity of Insurance Policy Verification Services – InsuranceNewsNet
Insurance policies of different segments such as P&C, motor, etc., have changeable clauses. Thus, all require different packaging and documentation. Insurers need to pay attention to the smallest details when it comes to insurance policy packaging. This includes checking information such as terms and conditions, applicable clauses, terminology, etc. Appropriate policy packaging directly influences the insured’s overall experience with insurers.
However, as your customer base grows, it becomes difficult for insurance companies to put every detail of the policy document under the microscope. Policy verification often takes a secondary place among the huge tasks of issuing new plans, policy renewals and handling claims. This leads to an increase in the number of errors in policies.
Six common insurance policy mistakes:
Here are some of the standard but crucial insurance policy verification mistakes that often give insurers a hard time:
Not maintaining proper coverage:
The foundation of any policyholder’s trust rests on the assurance that the insurer will carefully monitor insurance coverage from time to time and provide correct information to protect its financial health. However, there are situations where the insurer may not obtain the appropriate coverage. In such cases, in the event of any loss suffered, the customer is liable for financial damages.
If the customer thinks it is the fault of their insurer, they can resort to measures such as taking legal action. Legal cases involve a high percentage of errors and omissions claims against insurance agents. You can avoid putting yourself in such situations by following the points below:
- Be sure to review each client carefully to determine their insurance needs, so your recommendations match their exact situation.
- Ensure your customer is informed instantly if the requested coverage cannot be obtained and give them the opportunity to consider alternatives.
- Keep track of all your communications and save memos. If a customer declines a policy, you would at least have the same in writing.
Failing to properly explain coverage:
If you have carefully followed the above points to ensure correct coverage, you are well on your way to protecting yourself from errors and omissions claims. Here are some of the other points that you need to illustrate to your client so that he is fully aware of the factors that could influence his insurance coverage:
- Make sure your clients are aware of all terms and coverage limits before purchasing the policy.
- When renewing the contract, inform him of any premium due or any change in the conditions of the insurance contract.
- Reviewing and updating marketing materials from time to time is a must to ensure the information is consistent with your policies.
Errors are inevitable, especially when using multiple software for new insurance policies, renewals and maintenance. A great way to reduce the risk of claims against insurers is to reduce the workforce that works with a potential policy buyer throughout their customer journey.
Assign policy salespeople to specific customers and let them manage all aspects of policy management, from preliminary consultation to purchase and regular maintenance. Agents should keep their agency staff informed about the insurance plans they sell.
Failure to classify exposures:
Lawsuits for errors and omissions are usually the result of poor risk analysis. This problem means producers need more education on the subject. Protect your agency and its staff by:
- Evaluate new hires to assess their risk analysis abilities
- Require staff to take risk analysis courses
- Find staff to help producers assess the risk of their customers
Failure to Disclose Changes to Insurance Policy:
If there are any changes in coverage, it is the agent’s responsibility to notify their client in a timely manner. This could involve any change in the financial situation of the insurer which could influence the coverage of claims or the continuation of the policy.
Not sending the correct customer details to the insurer:
Always keep in mind that there are three essential information channels:
- The agent of the insured
- The insured to the agent
- The insurance agent to the insurer
Be sure to follow these steps regularly:
- Monitoring Claims Activity: When filing a claim, insurance agents should follow up with both the insurer and the insured.
- Monitoring your operators’ loss ratios: Industry trends can help anticipate issues and critical changes or updates.
- Notify the insurer of every claim: If a customer notifies you of a claim, your first task is to ask the customer to contact their claims handler, or you can submit the claim information yourself. Nevertheless, the follow-up of the complaint, the guarantee of resolutions and the correct and timely management are essential.
Why are policy verification services crucial to prevent errors?
Insurance policy verification services involve accurate scanning of all policy documents. The agents or the insured provide these documents.
Carefully review the documents for potential errors such as incorrect claim filing, wrong address or policy owner details, wrong policy terms, etc.
Now let’s see how to perform policy verification services to rectify errors in the policy:
Data integrity assessment:
A thorough review of all documents can reveal any form of inconsistency in the data. This involves a thorough review of workbooks, quotes as well as proposals. Thoroughly evaluating all of these documents to ensure data integrity helps reduce the risk of complexity when filing a claim.
Walking hand in hand with underwriters: Underwriters generally struggle to ensure the accuracy and integrity of information provided by policyholders in their documents. Eventually, underwriters plan and chalk out the final policy terms based on this information.
Policy Verification Services contribute to essentially simplifying the tasks of subscribers. The initial validation of policy document data ensures that the underwriting team is working with compositions that contain little or no errors.
It also allows underwriters to take quick calls regarding coverage terms, thereby shortening the policy issuance cycle. Overall, this promotes customer satisfaction and allows them to purchase more insurance coverage.
Assessment of policy adjustments:
Coverage information in any policy is not complete until it includes all policyholder advertisements. You must also ensure that both parties, the insured and the insurer, comply with the terms and clauses of the policy.
The correctness of the policy is determined by a detailed evaluation of all adjustments to the terms requested by the customer. This includes assessing the impact of these adjustments on the overall premium amount. Take care of this step before sending the policy to the underwriting team for their final approvals.
Checking policy status:
Managing insurance policies requires a policy verification process to keep customers informed of any crucial information such as the status of their payment made as a premium.
This allows policy owners to check the status of their policy using the insurer’s portal.
Insurance companies will also be vulnerable to less risk since outsourcing partners will assume these risks on their behalf. Insurance outsourcing also allows companies to refocus on their main revenue-generating activities. With this method, companies can continue to bring in more regeneration, keeping extra tasks easier.