07/10/2024
First Notification of Loss (FNOL) Explained
Here we explain everything you need to know about First Notification of Loss (FNOL) in insurance, including how the process works, why it’s necessary, and the potential for its automation.
What is the First Notification of Loss (FNOL) in insurance?
First Notification of Loss (FNOL) is the first step in the insurance claims process. This is when your insurer is first notified of damage, loss, or theft of an insured vehicle.
How does FNOL work?
Your driver can call the broker or insurer directly, call your traffic office who can then relay the information or even use a claim reporting app that will notify all parties quickly.
This is critical information, so reports will ideally from the roadside as soon as it safe to do so. This information will allow the claim to be managed in the most efficient way and defend your position by controlling costs when your vehicle is at fault.
When should FNOL take place?
As soon as practically possible after an incident or collision occurs. The policyholder will normally contact their broker in-house claims team, insurer claims department or log the claim via a claims app. Typically, the immediate questions to answer are:
- Your driver and vehicle details
- Location of the incident and a summary of what happened.
- Third party details including vehicle, name, and contact details.
- Details of any witnesses.
- Confirmation of whether the police have or are attended.
Further evidence is very useful, such as pictures of the damage, dashcam footage, and the driver's detailed account of the incident.
This provides you’re claims team and insurers with the information they need to inform the next steps of the claims process, including identifying the potential costs involved.
Why is FNOL important?
Early FNOL reporting is crucial, as it enables claims teams to meet customers' needs when they need them most and provides important insight into the claim.
There are a range of ways costs can quickly escalate without FNOL, such as high credit hire costs or exaggerated or false injury claims. Insurers can better control these with appropriate information.
FNOL allows the claims team to assess who is at fault and set an expected claims reserve to work towards; this might be calculated for a replacement vehicle(s), vehicle hire, or an item of company property which has been lost or damaged, or possible injury claims.
FNOL also allows the claims team to offer a hire vehicle to a third party (when you are a fault) and start the process of assessing your own damage to get your vehicle back on the road as quickly possible to minimise interruption to your business.
FNOL has been proven to significantly reduce overall costs and the impact of the claim on your business.
The benefits of FNOL for your business
#1 – Faster incident reporting
Timely reporting ensures that liability assessments, validation processes, and third-party intervention in fault claims can be completed quickly and easily.
The claims team can intervene early on a fault claim and offer services to support the non-fault third party.
The quicker your claims team is informed of an incident, the quicker the claim can be dealt with, and costs managed.
#2 – Damage reports at point of incident
FNOL at the point of incident is crucial, as damage can be captured (and evidenced) at the scene. Thanks to the images and data captured post-incident, it is easier for your claims team to review vehicle damage remotely.
This allows insurers to assess the scale of the damage quickly and pass their analysis straight to their repair partners for costing.
#3 – Quality claims data
A good FNOL process captures evidence at the point of the incident. Parties involved in the incident often remember more details straight after an accident, than they do significantly after the event, which helps to reduce human error or unreliable testimony.
Using information and data from the point of incident also informs the claims process, allowing for consistent claims services and incident reporting.
At FNOL, fraudulent activity is often spotted, so early reporting is critical for insurers to assess the information and collect more if needed. If a claim does have any fraud indicators, claims specialists can investigate and clear the claim or address areas needing further attention.
This helps ensure a more positive outcome for customers, quicker claims processing, and mitigation of delays in the repair process.
FNOL at One Broker
At One Broker, we give your clients the choice of claims service, whether they would like to use our specialist in-house claims team or go directly to the insurer.
Regardless of the chosen avenue, FNOL is crucial in effectively managing a claim. Call 01603 218228 to speak to our specialist haulage insurance and fleet team for more information.
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