Whether your neighbors flooded your house, you were involved in a car accident, or experienced a natural disaster, you may have already come across the term "claims settlement." This refers to a series of steps that begins with filing a claim with the insurance company, and ideally ends with the insurance company providing you with compensation. In the worst case, the insurance company may inform you that you are not entitled to compensation, or that you are only entitled to part of it. To maximize your chances of success, it's helpful to have at least a basic understanding of how this process works. Although insurance conditions can vary by type, here is a simple overview of the claims settlement process.
Filing a Claim for Insurance Payout
The first step in getting compensation from your insurance company will always be to file a claim with them. It is important to submit your claim as soon as possible after the event that triggered the claim. You must also provide truthful information about all relevant facts, including a detailed explanation of the cause, extent, and consequences of the incident. You should also inform the insurance company of any third-party claims or if you have additional insurance with another company that might apply to the same event. All the above should be supported with appropriate documentation (such as certificates or photographs). In short, you must use all available means to prove that the insured event occurred, and to the extent you claim. Finally, it’s always a good idea to review your insurance policy or the general terms and conditions, which you can likely find on your insurance company's website. A practical note: the claim doesn't necessarily need to be made by the person named in the insurance contract, but can also be made by other parties with a legal interest in the payout, such as your spouse.
Insurance Investigation
Once you've filed your claim, the insurance company will promptly begin a process known as an "investigation." During this phase, the company will verify the occurrence of the event you described and the damages it caused. After the investigation, the insurance company will compare its findings with the insurance policy and its terms to determine whether, in its view, you are entitled to a payout. The investigation will always conclude when the insurance company informs you of its decision and provides written justification for the amount of compensation granted, or explains the denial of your claim. This should generally be done within 3 months of reporting the event.
If you have provided any false or grossly misleading information in your report, or if you have failed to disclose any relevant details, the insurance company may seek reimbursement for the costs it incurred during the investigation. This is why it's important to carefully verify everything you submit when making your claim. Also, in general (with certain explicitly stated exceptions), you are not entitled to a payout if you caused the insured event yourself. For example, if you drive under the influence of alcohol and cause an accident, the insurance company will cover the damage to the other party, but it will seek reimbursement from you for the damage caused.
Payout of Granted Compensation
If your claim is correctly filed and the insurance company grants you compensation during its investigation, it must pay you within 15 days of informing you of the investigation results.
Denial or Unreasonably Low Compensation
If you're dissatisfied with the results of your insurance company’s investigation, the simplest way to challenge it is to file an appeal with the insurance company itself. Another department will then examine whether the investigation was conducted properly. If this appeal doesn't succeed, alternative dispute resolution methods are available, such as through the Czech Trade Inspection or the Ombudsman’s Office of the Czech Insurance Association. If these options fail, you can pursue your claim in court (we’ve written about how court proceedings work here). In such cases, judges often rely on expert opinions to assess the claims settlement process. Legal proceedings against an insurance company can be complex in terms of arguments, so it’s advisable to be represented by an attorney during such a process.
Different Types of Insurance
The rules mentioned above are based on the general legal framework for insurance under the Civil Code and pertain only to general insurance rules. The Civil Code further distinguishes specific types of insurance, such as property, life, accident, and others, each with its own particularities. Therefore, it’s always important to carefully review the specific rules for your type of insurance or seek legal assistance if you’re unsure about how to proceed in your case.
We used a publicly available AI translation tool to translate this article from Czech to English. Please contact us if any of the above information is unclear to you.
