Insurance Industry faces ongoing challenge from Technology Claims

Whether you love it, hate it, embrace or avoid it, the computer chip and digital technology enter our lives every day. Home, workplace, or the great outdoors technology is all around us. It would be hard to find a business that doesn’t use digital technology in some format in its daily operations in 2012. If you own a mobile phone or a calculator, you have signed up to the technological age.

We are surrounded by plasma tv’s, laptop computers, mobile phones,  gadgets, and home entertainment systems, some adding up to thousands of euro’s in value. In the workplace our machinery and equipment ranges from the basic computer and telephone equipment to high spec computer operated machinery and equipment ranging in value from hundreds to millions of euro.

It is a fact of technological life, that should the equipment policyholders have bought and insured  become the subject of a claim, that it will be impossible to replace on a like for like basis once it is two or three years old.  Replacement will more than likely result in betterment if the damaged model is no longer available and replaced by a series of models with a higher spec.

The difficulty for the Loss adjuster, Loss assessor or Insurer is firstly establishing if the claim is valid and if so, determining whether the equipment should be repaired or replaced.  Managing the expectations of the insured in relation to the claim can present other challenges.

Some policyholders will produce documents from their supplier to substantiate their claim that the equipment should be replaced with the newer model as it is

(a)    unable to be repaired or

(b)   more expensive to repair than replace with the new model.

The ideal solution for the claims industry is to obtain a quick, independent assessment of the damage to the equipment, together with a comparison between the cost of replacement with a model that performs all the functions of the damaged item and the cost of repair.

The other difficulty in assessing the claim, is establishing whether the equipment has stopped working due to faulty components or the damage reported on the claim form.

Tech Claim Services is an Irish company specializing in all aspects of technology claims providing support for insurers, Loss Adjusters and Loss Assesors.  Robert Mulhall claims they can assist with any loss that contains a plug, a battery compartment, or even a solar panel.  In the last three years they have assisted in the settlement of over 4000 claims and advised on equipment from telephone systems, laptop and desktop computers, shop epos systems, complete IT systems, industrial and even medical equipment. Their activities have attracted attention across the water resulting in offices being opened in the UK earlier this year.

Reducing the cost of claims is high on the list of all insurance companies and the recent trend of increasing excesses on household policies will help reduce claims costs. However, Dave McDonald believes that the Insurance industry could reduce the cost of claims significantly if they engaged the help of technology specialists for both personal and commercial lines claims.  “I have seen numerous cases where claims were about to be settled with the purchase of new equipment for thousands of euro, when replacement components could be sourced and fitted for a few hundred euro”. 

McDonald and Mulhall have recently launched a web portal to assist Loss Adjusters and Insurance Companies keep track of the progress of technology claims by logging in and checking the status in real time. They believe by providing a cost effective turnkey approach to claims support including collection of the item, assessment of damage, documentation confirming whether the claim is valid or not, and  valuation for repair or replacement that a prompt resolution can be achieved to help minimize disruption to the claimant and reduce costs for the insurer.

McDonald says “insurers already suspect that their costs can be reduced in relation to technology claims”. He also believes that Insurers exposure will increase over time as technology weaves its way further into our daily lives. “It is the objective of Tech Claims Services to provide Loss Adjusters and Insurers with the advice and tools to assist them reduce the cost of these claims” he says. 

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Tech Claims Services is a technical support and advisory service for the Insurance and Loss Adjusting industry. Their aim is to provide all the relevant technical information required to claims personnel to assist them process claims containing items of a technological nature.  For more information visit www.techclaims.ie

Photo: Dave McDonald and Robert Mulhall of Tech Claims Services

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