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The Complete Guide to FNOL (First Notice of Loss)

June 22, 2022

Filing an insurance claim is rarely a pleasant process. For many of us, it’s as frustrating and cumbersome as the auto incident itself. Yet when the time comes, reporting this information to an insurer is a necessary action that must be taken. Likewise, when you operate a fleet of trucks or delivery vans, the stakes are even higher.

So, what does this look like? And what are the steps you need to take to greatly improve your chances of winning a just verdict?

For your convenience, we’ve put together a comprehensive guide on exactly that - FNOL (first notice of loss) - why it’s important and how to do it right. But before we get into the details, let’s kick things off with an FNOL definition.

What is FNOL?

Formally known as First Notice of Loss, FNOL is the initial report made to an insurer detailing the damage, loss and theft of an asset. It marks the first step towards successfully making an insurance claim, which is usually under the management of a claims handler.

What is the first step in processing a claim?

If you are the claimant, the first step is to submit the claim as soon after the auto incident as possible. This is commonly known as an FNOL report. The information in this report is standard information. You’ll need the following to complete it:

  • Policy number
  • Date and time of the incident
  • Location of the incident
  • Police report number (if applicable)
  • A personal account of what happened

With these details, an insurance claim handler can get to work processing your auto incident, reviewing the details of that incident and the actions that the insurance company should take.

FNOL Insurance: Why is it important?

The FNOL claims process is crucial to understanding if a claim has been made rightly or wrongly. Likewise, FNOL helps to assess the amount a valid claim is worth.

For insurers, how quickly and easily they carry out the FNOL process is a measuring stick for customer satisfaction. As per Accenture’s latest study, 83% of customers switch providers if they’ve had a negative experience with their latest claims process. Similarly, Ernest & Young’s research has shown that in 87% of cases, effective claims processing is a key factor for a customer selecting a carrier.

For claimants, it’s critical for clear reasons. An accurate reconstruction of what happened in an incident significantly impacts the likelihood of winning a claim and its size.

What is eFNOL?

Also known as ‘electronic First Notice Of Loss’, eFNOL is an intelligent and automated version  of the initial report that the insurer receives following an auto incident.

Typically, the claims process begins with an inconvenient phone call and subsequent paper work for a handler. eFNOL replaces this with a user-friendly, phone-based solution that ensures all the data a handler needs is ready and filled out onsite or right after the incident. The idea of digitizing this aspect of claims handling will reduce human error and optimise time spent between claim and verdict.

In the case of auto claims, eFNOL can leverage telematics data through whichever device that is equipped to the vehicle. Whether it’s OBD (On-Board Diagnostics), a smartphone or dash camera, these devices produce GPS and accelerometer data to monitor vehicle position and movement. This is then plotted using reconstruction software and overlays the incident on a map. Ultimately, it allows insurers to accurately visualize what has happened in a particular incident, even moments after it occured.

How can eFNOL help fleet operators?

As mentioned above, eFNOL allows insurers to speed up and fine-tune the auto claims process. This not only saves time and money for insurers, this also protects fleet operators from potential nuclear verdicts.

For example, a fleet vehicle is involved in an incident with another motorist. Without empirical evidence of how the incident occured, assessing liability is a significantly greater challenge. With eFNOL, a claims handler will be able to see a visualized reconstruction of how an incident has come about. This significantly reduces the risk of contentious claims and can save fleet operators millions in unjust payouts.

How are digital claims solutions impacting the insurance industry?

For insurers, FNOL automation allows them to do their job with greater certainty. Receiving a data-driven portrayal of events means that they can be more confident in the claims handling procedure. While verbal testimony from a claimant can provide context, the room for human error is drastically increased.

Additionally, a digitized reporting solution creates a better customer experience. A report by McKinsey & Co. saw that customer satisfaction increased by 20% when insurers adopted digital claim technology. In the same report, it’s shown that claims expenses were reduced by 25%. A speedier and more dependable claims process gives insurance companies a competitive advantage over their rivals and, ultimately, encourages customers to stay and advocate for their services.

The Bottom Line:

First Notice Of Loss reporting is critical to processing auto insurance claims promptly and correctly, so it’s no wonder that it’s becoming a more digitally-focused action.

With eFNOL, we’re now seeing that this report can be more accurate and less time-consuming, reducing the risk of incorrect verdicts and wasted resources. This is a massive plus both for insurers and their clients, particularly when it comes to those with multiple insured vehicles like fleet operators.

If you’re a fleet operator that’s interested in saving money using end-to-end eFNOL, our ROI calculator gives an estimated annual saving based on the size and insurance premiums of your fleet.