One of the goals of the Office of Risk Management is to reduce claims throughout the University of Texas System (the UT System). Reduced claims and associated administrative costs will have a positive impact on operating budgets across the UT System and improve our loss experience and insurance rates. With everyone across the UT System embracing the risk management process and taking an active interest in controlling claim costs, we can control the financial impact of accidents Systemwide.
Loss prevention activities play a key role in managing and reducing claims and claim costs. The best way to prevent claim costs is to prevent the accident from occurring in the first place. Increased involvement of the supervisory staff in the claim reporting process can help reduce the number of incidents. Each occurrence should entail a thorough review of the cause of the accident and steps which can be implemented to prevent reoccurrence. The key to prevention is to take action. It is not enough to talk about corrective measures or type it on a form. Action must be taken to address the problem which caused the accident to occur.
System Administration employees should be made aware of the financial impact associated with claims and how the timely reporting of claims affects these costs. Workers need to know that part of the reason for waiting another year for a new vehicle, computer, or even a pay raise is impacted by claim costs.
There are two major types of insurance claims: first party and third party. A first party claim is a claim directly to the insured's own insurance carrier. Examples of this include property claims such as fire, theft or wind claims or auto claims involving your own vehicle such as collision when you strike another object or comprehensive for damages caused by wind, hail, flood, theft or vandalism claims. A third party claim is when a claim is made against another party's insurance for damages they cause, or when a third party makes a claim against our insurance for injuries or damages that is caused by our insured. These would be on policies such as Auto and General Liability.
First Party Claims
A first party claim is fairly straightforward. It’s a claim between the insured and the insurance carrier. The adjuster will investigate, evaluate and settle the claim with the insured. The insurance company may send out specialists to inspect the damage, such as an appraiser, who is either a company employee or an independent contractor. Another type of first party claim is when a University has a loss to equipment or property due to an occurrence that could be from a fire, explosion, theft, vandalism or any other type of direct physical loss. These claims are handled similar to the auto claims in which The University of Texas System Institution submits a claim to the insurance carrier.
Third Party Claims
A third party claim can be more complicated. If the claim is for property damage only, then it is handled in a similar fashion to a first party claim. In other words, the appraiser (or body shop for auto claims) prepares an estimate and the claimant (third party) is paid. However, if the claim is for a bodily injury, this will be a longer process.
Bodily Injury claims, or "BI" claims, are not settled until the person has recovered from their injuries. Some injuries, like bruises, may heal quickly. Other injuries, such as a herniated disc, may require surgery and may not heal for a year or more. Once the injuries have healed, a demand is sent to the insurance company. The adjuster should review the demand and respond in a reasonable time, but complicated demands may take several days to review. Also, depending upon the length of recovery time, some claims may involve partial payments to assist with ongoing medical expenses throughout the claim.
Third party claims can occur as a result of injuries or damages sustained by a third party that are caused by the University of Texas System Institution. A slip and fall accident is an example of third party claim. The Office of General Counsel of The University of Texas System requires immediate notice of the essential details of any possible claim that may arise under the Texas Tort Claims Act (Chapter 101, Texas Civil Practice & Remedies Code).