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What general rules, requirements and procedures govern the filing of insurance claims?
Once the loss has been announced to the insurer, the process for adjusting the loss will commence. The loss adjuster must collect all relevant information and antecedents regarding the loss and issue his or her non-binding recommendation to the parties. The parties may object to the adjuster’s conclusions within 10 days. For larger insurers, the term is 20 days. The adjuster must respond to the objections within six days (which increases to 12 days for larger insurers). If the discrepancies between the parties persist after five days, the insurer must notify its final position to the insured. In its final communication to the insured, the insurer must inform the insured that it may resort to appropriate dispute resolution procedure in accordance with in the policy or law. As a rule, conflicts must be resolved by arbitration. However, if the controversy does not exceed UF10,000 (approximately $415,000), the insured can file a claim before the ordinary courts.
What is the time bar for filing claims?
The time bar is four years.
Denial of claim
On what grounds can the (re)insurer deny coverage?
In general, the insurer may deny coverage on the following grounds:
- the loss was not disclosed in time; however, in several decisions it has been established that this cannot be validly invoked if the insured was not in a position to disclose the loss, or if the delay in disclosure has not prejudiced the insurer;
- the contract was terminated due to non-payment of the premium;
- false declarations were made regarding the risk;
- there was a lack of support for the claim;
- an exclusion clause existed;
- rescission accrued due to aggravation of the risk; or
- limited measures were taken to prevent a loss or following the loss.
What rules and procedures govern the insured’s challenge of the denial of a claim?
The governing rules are the Code of Commerce and Decree 1055/2012 regarding the loss adjustment process. If the adjuster recommends that the claim be denied, the insured may object to the adjuster’s recommendation. If the adjuster maintains its position and the insurer accepts the adjuster’s recommendation, the insured must follow the policy’s clause regarding resolution of conflicts. In the absence of such a clause, the insurer may commence legal proceedings before an ordinary court or an arbitrator.
On what grounds can a third party file a claim directly with the (re)insurer?
A third party can file a claim directly with the (re)insurer only when it has assigned its rights against the reinsurer to the insured. If the insurer has commenced bankruptcy proceedings, the creditors (through the receiver) may pursue the claim with the reinsurer.
Are punitive damages insurable?
No. Chile does not have punitive damages, and penalties cannot generally be insured, since they are deemed to contravene public order.
What regime governs (re)insurers’ subrogation rights?
On payment (partial or total) of the insurance indemnity, the insurer automatically subrogates the insured in all of its rights and actions against third parties responsible for the loss. No assignment of rights is required.
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