Claims lifecycle · Stage 03 of 08 · Coverage verification
AI coverage verification: the policy read against the loss
A cited coverage position on every claim, with the endorsement that decided it quoted in full.
In short
Hesper AI is an AI claims resolution platform for P&C carriers, TPAs, and MGAs. At the coverage stage, its agents read the policy, its endorsements and its exclusions against the facts of the loss, write a coverage position that cites the governing language, and draft the reservation-of-rights or coverage letter. The coverage decision, and the signature, stay with your adjuster or counsel.
Why does coverage take so long to pin down?
The policy is rarely one document. It is a form, a stack of endorsements, a schedule, and whatever was added at renewal, and the clause that decides the claim is often the one added last. An adjuster working a queue has minutes for that, so coverage questions get deferred, escalated, or answered from memory of a similar claim.
Deferral has a cost. The NAIC Unfair Claims Settlement Practices Act makes it a prohibited practice to fail to affirm or deny coverage of a claim within a reasonable time after the investigation is complete, and California gives an insurer 40 calendar days from proof of claim, with any denial citing the specific policy provision. Meanwhile reserves sit wrong, and a position taken without the governing language quoted is the one that gets disputed later.
What does the coverage agent do on each claim?
- Assembles the policy as it stood on the date of loss: base form, endorsements, schedules, and any mid-term changes.
- Reads the loss facts from the claim file, not just the coded loss type: the notice, the photos, the statements, the reports.
- Matches facts to language: which grant applies, which exclusion is in play, which endorsement modifies it, and what the limits and deductibles do to the exposure.
- Writes the coverage position with the governing text quoted and cited, including the parts that cut against the position.
- Drafts the reservation-of-rights letter or coverage letter for review, and flags where a coverage question needs counsel rather than an adjuster.
Why does a cited position matter later?
Because the file is the defence. When a coverage position is questioned months later, by the insured, by counsel, or by a regulator in a market conduct exam, what matters is whether the reasoning can be reconstructed: which language applied, what facts it was applied to, and who decided.
Hesper writes that record as it goes. The same evidence file supports the investigation if the claim turns suspicious and the recovery screen when it closes.
Does it replace our coverage counsel?
No. It does the reading and the drafting, which is most of the hours, and leaves the judgment. Ambiguity, novel questions, and anything heading for a declaratory judgment still belong with your coverage counsel, and the agent flags those rather than guessing.
Hesper connects to Guidewire, Duck Creek, Majesco and other claims systems through its API, and can pick a claim up at intake, at triage, or here.
What does Hesper do, and what does your team decide?
| Hesper's agents | Your team |
|---|---|
| Assembles the policy as of the date of loss | Confirms the policy record is complete |
| Writes a coverage position with the governing language cited | Makes the coverage decision |
| Drafts reservation-of-rights and coverage letters | Approves, signs and sends |
| Flags questions that need counsel | Decides when to involve coverage counsel |
What does the output look like?
- Loss
- Water damage from a burst pipe in an unoccupied rental property
- Policy as of loss
- HO-3 form plus a vacancy endorsement added at the last renewal
- Question
- Does the vacancy provision exclude the loss, and was the property vacant as defined?
- Position
- Coverage likely applies: occupancy evidence in the file places a tenant on site within the policy's vacancy window
- Letter
- Reservation-of-rights drafted, citing the vacancy endorsement in full
Evidence cited
- Vacancy endorsement text quoted, with its definition of vacant
- Lease and utility records in the file showing occupancy dates
- Adjuster photos of the failed pipe with their timestamps
Recommended next action: Adjuster reviews the position, confirms the occupancy evidence, and signs the letter.
Frequently asked questions
What is AI coverage verification?
It is software that reads an insurance policy, its endorsements and exclusions against the facts of a specific loss and produces a coverage position with the governing language cited. It does the document work an adjuster or coverage lawyer would otherwise do by hand.
Does Hesper decide coverage?
No. It produces a cited position and drafts the letters. The decision and the signature stay with your adjuster, claims examiner or coverage counsel, and anything ambiguous is flagged for a person rather than resolved by the agent.
Can it handle commercial policies and manuscript endorsements?
It reads what is in the file, including manuscript wording, rather than matching against a fixed library of standard forms. Unusual or hand-written wording is quoted in the position so a reviewer can see exactly what the agent relied on.
How does this help with unfair claims practices requirements?
Timely, documented coverage decisions are what those rules ask for. Every position Hesper writes carries the language it relied on, the facts it applied, and a timestamp, so the reasoning can be reconstructed during an audit or a market conduct exam.
Which systems does it work with?
Guidewire, Duck Creek, Majesco and other claims systems through the API. Hesper picks the claim up wherever it already is; there is no rip-and-replace.
Other stages of the claim
Book a demo of Hesper's coverage agents
A 30-minute walkthrough on your own policy forms: how a position gets written, cited and drafted.
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