What are the Common and Costly Insurance Claims?

There are some common questions asked by people about insurance claims. These questions include the most common of them, the most costly of them etc. Most of the questions are related to the small business. For this purpose, The Hartford, a financial service company carried out a study. The results of this study are explained as under.

For Small Business…

When insurance policy is purchased by small business owners, the thought of loss never occur in their minds. They thought about insurance as a protection against the losses. According to this study, 40% of small business owners will be facing a liability loss in the coming decade.

Most Common Insurance Claims

According to the Hartford study, most common insurance claims are as follows…

1. Vehicle Accidents

These are perhaps one of the famous insurance claims but their magnitude is up to 5%. To prevent auto accident claims, vehicle safety program is of much help.

2. Theft

They are the most popular reason of insurance claims as their magnitude is almost 20%. The crimes involving theft occur mostly by the outsiders. According to the Federal Bureau of Investigation, 74% of the theft crimes occurred at residential areas. A home security system installation can be helpful to stop these crimes.

3. Fire

One often heard about it that fire burnt the whole building. Fire is one of the most common causes of property damage. The magnitude of insurance claims due to fire is up to 10%. Not only these claims are frequent but also they are among the most expensive as well.

4. Wind and Hail

Wind and hail are also included in most common insurance claims. They are more frequent in areas which are more likely to be hit by tornados and storms. They are mostly covered by home insurance.  There magnitude is almost 15%.

5. Water Damage and Freezing

These claims include roof damage mostly by snow and ice. Also damages of water pipes by frozen ice are also included in these claims. The pipe leakage or bursting due to low temperatures is common in most countries of the world. Insulation of pipes is a common solution to this problem.

6. Customer slips and falls

There magnitude is 10% worldwide. They mostly happen to small business as it is a common phenomenon. Your company can be more vulnerable to this type of claims if the customers regularly visit your work site.

7. Struck by Objects

This happens most of the time in all parts of the world in different ways obviously. Most common of them is on the job injuries. The examples include truck and car accidents, falling from somewhere and hail stones etc. There magnitude of happening is almost 5%.

8. Customer Injury and Damage

Different bodily or other injuries can happen to customer when they visit your work site. For example, consider a scenario that a customer happened to be injured on head by free falling of lamp. In this case, you are in state of bother. There magnitude of happening is almost 5%.

9. Product Liability

Your vulnerability to a product liability claim depends on a variety of factors including the nature of your product and warranties you make when you sell the product. There magnitude of happening is also up to 5%.

10. Reputational Harm

Reputational harm includes third party insurance claims for acts like libel and slander. Plaintiffs argue that there reputation is badly heart by these damages. These insurance claims also cover almost 5% of the magnitude.

Most Costly Insurance Claims

Claims are of different types and there frequency can also vary a bit. Some claims are more costly than the others. Here is a list of most costly insurance claims presented below according to the Hartford Study.

  1. Reputational Harm  ($50,000)
  2. Vehicle Accident  ($45,000)
  3. Fire ($35,000)
  4. Product Liability     ($35,000)
  5. Customer Injury or Damage ($30,000)
  6. Wind and Hail Damage ($26,000)
  7. Customer Slip and Fall ($20,000)
  8. Struck by an Object ($10,000)
  9. Water and Freezing Damage ($17,000)
  10. Burglary and Theft  ($8,000)