What is the definition of a First Notice of Loss (FNOL)?
The first notice of loss (FONL) refers to the primary communication submitted to an insurance provider after theft or damage to an insured item.
The first notice of loss (FNOL) is the opening stage in the official claims procedure.
First Notice of Loss (FNOL) Process
Losses are usually reported before formal claims are filed. Consumers and companies usually notify customers of losses in a certain way. The insurance claims process involves several steps, from alerting the insurer to settling.
The claims cycle begins when the policyholder notifies the insurer of a loss. A driver reports a car crash to their auto insurance company.
Drivers are paired with claims adjusters to determine fault and settlement amounts. The adjuster determines the policyholder’s car damage type and severity. They consider the police report, the other driver’s testimony, witness accounts, a medical examiner’s report, and the insured car’s damage.
FNOL Requirements
The insured must provide the policy number, date and time of theft or damage, location, police report number, and personal account of the incident in the first notice of loss.
In auto damage claims, the insured must include the other party’s insurance information in the First Notice of Loss.
Besides this information, the claims adjuster may visit the accident scene and use the other driver’s and witnesses’ accounts to determine fault.
If the policyholder is at fault, the insurance company pays for repairs and bodily harm for both parties. Continuing the policy will increase the policyholder’s premium.
Outcomes Following the FNOL
The claims process can have many adverse outcomes. The adjuster may receive conflicting accounts of how and when the event occurred, resulting in an unfair settlement.
Due to duplicate medical bills, the insurer pays out more to the insured, who reaches their policy limits sooner.
It may take weeks from FNOL to final settlements because the adjuster must travel to investigate the event and its causes. A negligent insurance company may pay a fraudulent claim.
Technology and FNOL
Companies are using technology to improve insurance operations by solving claims system issues. Insurtech creates apps and tools to enhance consistency, efficiency, and accuracy for insurers and insureds while reducing claim costs.
Insurance companies are using telematics for claims. The telematics box of a car alerts the insurer of a crash immediately.
The box uses GPS technology to record an incident’s date, time, and location and send it to the insurance company. Telematics data is the insurer’s first loss notice.
This assures the adjuster that the information is accurate and consistent with other accounts. Telematics tools can also detect fraudulent claims.
Special Considerations
Some insurers use predictive modeling and big data to assess claim risk and treatment. This analytics tool reduces settlement time and errors. This method also analyzes the risk of a fraudulent claim, preventing the insurer from paying it.
Insurance dashboards simplify the claims process for insurers and policyholders by allowing FNOL. Upload pictures and other essential documents with adjuster-required information using the dashboard. Insured saves time and resources mailing documents, and the insurer travels to the damaged asset to inspect it.
Conclusion
- When an insured asset is lost, stolen, or damaged, the first notice of loss (FONL) is the initial report to the insurance provider.
- An official filing is made after an insurance company records the first notice of loss.
- The first notice of loss report must include the date and time of theft or damage, police report (if filed), location, and a personal or eyewitness account.
