Claim Processing Checklist

Steps a claims adjuster runs after FNOL to validate intake data, confirm coverage, review documentation, set reserves, and decision the claim within state prompt-pay windows.

6 sections 21 steps Collects data
1

FNOL Intake and Data Validation

  1. Acknowledge FNOL receipt to the insured

    • Send written acknowledgement per the state's unfair claim settlement practices act. Texas Insurance Code Chapter 542 requires acknowledgement within 15 business days of receipt; other states vary. Document the acknowledgement date in ClaimCenter — this starts the prompt-pay clock.

    Collects text Collects date Collects text
  2. Validate insured and claimant identifiers

    • Confirm named insured matches the dec page exactly, claimant contact info is reachable, and any AOB (assignment of benefits) is on file. Mismatches at intake create payment-routing problems later.

  3. Run OFAC SDN screening on all parties

    • Screen insured, claimant, and any payee or assignee against the OFAC SDN list. Re-screen at every payment — parties can be added mid-claim. A hit blocks payment and requires Treasury reporting within 10 business days.

  4. Classify loss type and severity

    • Severity drives routing: minor PD goes to fast-track; BI, total losses, and any matter likely to exceed 50% of the primary limit go to a senior adjuster and trigger excess-carrier notification.

    Collects list
2

Coverage and Eligibility Verification

  1. Pull the dec page and policy form

    • Pull the in-force dec page, base form, and all endorsements as of the date of loss — not today's version. For claims-made policies, confirm the retroactive date and any ERP endorsement.

  2. Confirm policy was in force at date of loss

    • Check policy period, premium-payment status, and any cancellation or non-renewal notices. A lapsed policy at DOL is a denial; an active policy with a pending cancellation needs underwriting consultation before decisioning.

    Collects list
  3. Issue a reservation of rights letter

    • When coverage is in question, issue an ROR identifying the specific policy provisions in question. Generic ROR letters get challenged in bad-faith litigation; cite the exclusion or condition by section number.

  4. Verify reporting was within policy notice window

    • Occurrence policies require notice 'as soon as practicable'; claims-made require notice within the policy period or ERP. Late notice is a coverage condition issue, not automatic denial — most states require the carrier to show prejudice.

3

Documentation and Investigation

  1. Request loss documentation from the insured

    • Request the proof-of-loss form, photos, repair estimates, police or fire report, medical records (BI), and any third-party invoices. Send a single consolidated request — piecemeal requests reset prompt-pay clocks in some states.

    Collects file
  2. Take a recorded statement from the insured

    • Disclose the recording on the record at the start. Some states are one-party consent, some two-party — match the loss state. Undisclosed recordings are inadmissible and support bad-faith claims.

  3. Order CLUE and prior-carrier loss runs

    • Pull LexisNexis CLUE for the insured and the loss location. Repeat losses or prior denials inform both reserve setting and SIU referral decisions.

  4. Refer suspected fraud to SIU

    • States including NY, CA, FL, NJ, OH, KY, LA, MN, NM require fraud referrals under the carrier's filed Anti-Fraud Plan. Document the red flags that triggered the referral — staged-loss indicators, inconsistent statements, prior-loss patterns.

    Collects list
4

Reserves and Excess Notification

  1. Set the initial case reserve

    • Set indemnity, ALAE, and (if applicable) ULAE reserves based on documented exposure, not on a placeholder. Placeholder reserves that don't update on the carrier's 30/60/90 cadence drive IBNR drift and surface in market-conduct exams.

    Collects number
  2. Notify the excess carrier when warranted

    • Most excess policies require notice of any matter 'reasonably likely to involve' the excess layer; the practical trigger is 50% of the primary limit. Missing notice is a coverage-condition violation that the excess carrier can use to deny.

  3. Open subrogation and salvage files

    • Put the at-fault party on written notice of subrogation interest within the state's statutory window — many states waive recovery if not noticed within 6 months. For total losses, document salvage value before any disposition.

5

Decisioning and Payment

  1. Decision the claim within the prompt-pay window

    • Texas Chapter 542 requires decisioning within 15 business days of receipt of all requested information; missed deadlines trigger 18% statutory interest plus attorney's fees. Match your loss-state's statute — Florida, California, and New York all run on different clocks.

    Collects list Collects paragraph
  2. Issue the denial letter with policy citations

    • Cite the specific policy section and exclusion. Include the state-required appeal language and the DOI complaint address. Generic 'not covered under your policy' denials lose at appeal and surface in market-conduct exams.

  3. Re-screen payee through OFAC before issuing payment

    • OFAC re-screening at payment catches parties added to the SDN list mid-claim and any new payee from an AOB or settlement assignment. Skipping this is a common audit finding.

  4. Issue payment and obtain signed release

    • For full-and-final settlements, obtain a signed release before payment issues. For structured settlements or partial payments, document each tranche separately in the claim file.

    Collects file
6

Closure and File Retention

  1. Close reserves and reconcile ALAE

    • Zero out indemnity and ALAE reserves on closure. Open files with zero reserves and no recent activity inflate IBNR and distort the loss ratio.

  2. Apply the carrier's retention schedule

    • Most states require 5–7 years of claim file retention; workers comp typically requires 10+ years given lifetime medical exposure. Premature destruction creates spoliation risk in any future re-opening.

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Sections 6
Steps 21
Category Insurance
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