While we claim for our insurance, the insurance company will settle our claim within the guidelines, described in our insurance policy. The claim can be made in the form of a replacement, repair, or even solid cash equivalent to the insured parameter. Cash settlement refers to the settlement of cash for the value of property or a commodity that was insured, upon expiration or any damage. Cash settlements for property claims have been increasing lately.
How does a cash settlement work?
The insurance company acquires the required information like the level of damage, requirements for repair, etc. through an insurance assessor. Next they produce a quotation stating the amount of damage and the amount of cash that will be settled. The insurer has the right to demand higher cash values in case of heavy damage to his insured value. Once the cash value has been finalized, the insurer is updated on the status of the claim on every step until the cash is delivered to him.
Advantages of claiming a cash settlement
- The insurer’s cash claim will not meet any claim management fee deduction. Hence the value of the claim will not be reduced in any form.
- While we claim for a cash settlement the process is speedy. Unlike repairs or replacement claims, cash settlements are made almost instantly.
- It is the customer’s choice to either repair or replace the damaged property in cash settlement. But in the case of repair or replacement settlements only the facility provided by the insurance company can be applied.
NOTE:
Once the cash settlement is made to the insurer, he is bound to make the required replacements or repairs, and give a detailed description on the expenditure of the availed cash settlement.
