Claims handling, assessment and settlement
What this domain tests
The claims lifecycle: notification, cover assessment, investigation, quantum, settlement and recovery, with attention to New Zealand consumer-protection expectations.
Claims process
- Notify and acknowledge. Record the claim, check the policy and confirm next steps.
- Cover assessment. Identify the insuring clause, exclusions, conditions and excess.
- Investigation. Use loss adjusters or specialists; establish causation and quantum.
- Reserve. Set a realistic reserve and review it.
- Settlement. Repair, replace or cash; apply indemnity, depreciation, betterment and excess.
- Recovery. Preserve subrogation rights; pursue third parties where appropriate.
- Liability claims. The insurer may have a duty to defend and control settlement.
EQCover interaction
For natural hazard claims, establish what EQCover pays and what the private policy pays above the cap, avoiding double recovery.
Worked example
Storm damage exposes a roof with pre-existing rust. The assessor must decide whether the storm is the proximate cause or whether gradual deterioration is the effective cause. If storm is proximate, the claim is covered, but the insurer may deduct depreciation or betterment for old roofing. The decision and reasoning must be documented.
Traps
- Admitting liability before cover is confirmed.
- Settling without preserving subrogation.
- Ignoring the insured's duty to mitigate.
- Under-reserving complex liability claims.
- Failing to explain excesses and depreciation to the client.