Insurance Claims: Coverage Investigation Should be the First Step in Handling an Automobile Claim

by Chris L.
(Roanoke)

An important first step in the claims process that you neglected to mention is determining whether or not there is actual insurance coverage for the accident or loss. Reviewing the automobile policy's declarations page or "dec sheet" (where policy coverages and covered items are listed) is the first step in coverage analysis. Important information describing the named insured(s) and the covered vehicles can be found in the dec sheet.


The adjuster first needs to determine whether the loss or accident occurred during the time frame covered by the policy (the policy period). The adjuster will also need to confirm whether or not the vehicle involved in the accident is actually covered by the policy. If the policy holder was driving a newly-purchased vehicle, was the vehicle acquired during the policy period and added appropriately?

The claim investigator might need to establish that the vehicle was being used in a manner that the policy was intended to cover. For example, was the vehicle reported as a private passenger vehicle when the policy was purchased, but then used by the policy holder to run a taxi service? Such a misrepresentation might void the policy and cause the vehicle to be uninsured for the accident being investigated.

Also, does the policy holder actually own the vehicle? A vehicle might be listed as a covered automobile on a policy, but if the policy holder does not have any ownership rights (insurable interest) in the vehicle, then there should be no insurance coverage extended to it. For example, if Judy's friend Jack owns a car but is unable to get insurance on it because of his poor driving record, Judy cannot then purchase a policy on the vehicle and expect to really enjoy coverage.

Additionally, the insurance adjuster will need to check the policy coverages and their limits. All of this information is found in the policy declarations which should be referenced as soon as a claim is reported.

This article is approved for informational purposes and is not intended to take the place of competent local legal counsel.

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