First Notice of Loss (FNOL)

As per the First Notice of Loss (FNOL) definition, it is referred to as the initial report submitted to the insurance provider after damage, theft, or loss of some insured asset. FNOL also goes by the name First Notification of Loss.

It is usually referred to as the first step in the lifecycle of the formal claims process.

How First Notice of Loss Works?

FNOL is made available before the delivery of any official or formal claim. While making the First Notice of Loss (FNOL), there is a proper process that companies and consumers are expected to follow. The process of insurance claims will involve an array of procedures from the moment the insurer receives the alert upon the settlement process.

First Notice of Loss commences at the start of the entire claims cycle. It takes place when the policyholder will be notifying the insurer of some unfortunate event.

FNOL Example

Let us consider the instance of Auto Insurance. In this case, the driver will be informing the insurance company of some crash that involved some vehicle. The driver is then matched with the respective claims adjuster. The role of the adjuster is to determine the amount of settlement and cause of its fault.

The adjuster will determine the severity and nature of the total damage to the vehicle of the policyholder. The assessment of the condition depends on the testimony of the driver, the police report, a report from the medical examiner, any witness account to the incident, and the overall damage to the car.

First Notice of Loss (FNOL) Requirement

In case of the First Notice of Loss (FNOL), it is required that the insured individual will offer access to:

• Data & time of damage and theft
• Policy number
• Incident’s location
• Number of the police report
• Personal details of the occurrence of the accident

Along with the provided information, the claims adjuster will make use of accounts of drivers and witnesses. The adjuster might even consider visiting the accident’s site to analyse the fault.

In case the policyholder is held at fault, the insurance company is responsible for covering bodily harm and the costs of the overall damage for both the parties. The premium cost for the policyholder will rise in case you are renewing the policy for the upcoming term.

Special Considerations to First Notice of Loss

Some insurers depend on techniques related to predictive modelling with Big Data for determining the claim’s risk level and how the same should be handled. The given analytics tool will make sure that fewer mistakes and less time take place during the settlement process. Analysis of the fraudulent claim and its risks is also done with the given technique.