A formal request for coverage or compensation for a covered loss or other policy event made by a policyholder to an insurance company is known as an insurance claim. The insurance company confirms the claim (or denies the claim). On behalf of the insured, the insurance company will pay the approved interested party or the insured if the application is approved.
Insurance claims include everything from routine and extensive medical exams to death benefits on life insurance policies. In some circumstances, a third party may file claims on the insured person’s behalf. However, the majority of the time, only the person(s) named on the policy is/are eligible to make a payment claim.
KEY LESSONS
- A formal request for coverage or compensation for a covered loss or other policy event made by a policyholder to an insurance company is known as an insurance claim.
- When a claim is verified and approved, the insurance company pays the insured or an approved interested party on the insured’s behalf.
- Filing a claim can result in increases to your future premiums for property-casualty insurance, such as that for your home or car.
Contents
How to File an Insurance Claim
A paid insurance claim protects a policyholder from monetary loss. As payment for the conclusion of an insurance contract between the insured party and an insurance carrier, an individual or group makes premium payments. Costs for medical supplies and services, property damage, fatalities, landlord and tenant liability, and liability resulting from the operation of automobiles are the most frequent types of insurance claims.
Regardless of the severity of an accident or who was at fault, the number of insurance claims you file affects the price you pay to obtain coverage for property and causality insurance policies (typically through installment payments called insurance premiums). The likelihood of a rate increase increases with the quantity of claims that a policyholder files. If you file too many claims, the insurance company might in some circumstances decide to exclude you from coverage.
Your rates will almost certainly increase if the claim is being filed because of the property damage that you caused. However, if you are not at fault, your rates might or might not go up. For result, it is obvious that events like being struck from behind while parking your car or having the siding on your house blow off during a storm were not the policyholder’s fault.
Even if your most recent claim was for damage you didn’t cause, mitigating factors like the number of prior claims you’ve filed, the number of speeding tickets you’ve made, the frequency of natural disasters in your area (earthquakes, hurricanes, floods), and even a bad credit rating can all raise your rates.
Not all claims are created equal in terms of insurance rate increases. Mold, water damage, dog bites, and slip-and-fall injury claims can all serve as warning signs of potential future liability for an insurer. These things typically have a negative effect on your rates and the willingness of your insurer to keep offering coverage. Unexpectedly, speeding tickets might not even result in a rate increase. Many businesses won’t increase your rates if you get your first speeding ticket, at least not immediately. In the same policy, a small car accident or homeowner’s insurance claim will not cause much financial harm.
Different Insurance Claims
Insurance Claims for Health
Surgical procedures and inpatient hospital stays continue to be unaffordable. Patients are protected by individual or group health insurance policies from financial obligations that could otherwise result in crippling financial damage. Patients need not exert much effort to submit health insurance claims to carriers on behalf of policyholders; the majority of medical claims are processed electronically.
When medical providers do not participate in electronic transmittals but charges are incurred as a result of rendered covered services, policyholders must file paper claims. In the end, filing an insurance claim shields an individual from the possibility of facing significant financial hardships as a result of an accident or illness.
Claims for Property and Casualty
One of the most expensive assets an individual will buy in their lifetime is typically a house. A claim submitted for damage from a covered peril is first forwarded via the Internet to an insurance company representative known as an agent or claims adjuster.
It is the policyholder’s responsibility to report damage to any deeded property they own, unlike health insurance claims. Depending on the type of claim, an adjuster examines and evaluates property damage in order to determine how much the insured should be paid. The adjuster starts the process of compensating or reimbursing the insured once the damage has been verified.
Claims for Life Insurance
The original policy, a death certificate, and a claim form must be submitted with a life insurance claim. To make sure that the insured’s death did not fall under a contract exclusion, such as suicide (which is typically excluded for the first few years after policy inception) or death as a result of a criminal act, the process, particularly for large face value policies, may require in-depth examination by the carrier.
Without extenuating circumstances, the process typically takes between 30 and 60 days, giving beneficiaries enough time to replace the deceased’s income or simply pay for final expenses.
Filing an insurance claim could increase upcoming insurance premiums.
Particular Considerations
Regarding rate increases, there are no unbreakable laws. Another business won’t forget what one company forgives. Understanding your policy is the first step in protecting your wallet because any claim at all could put a risk on your rates. The choice of whether or not to file a claim can be made with advance knowledge of the effect it will or won’t have on your rates if you are aware that your first accident is forgiven or that a prior filed claim won’t count against you after a certain number of years.
It’s crucial to discuss the insurance company’s policies with your agent before you ever need to file a claim. If you even bring up a potential claim and decide not to file, some agents are required to notify the company. For this reason, you also shouldn’t wait to find out your insurer’s policy on agent consultation until you actually need to file a claim.
Regardless of your circumstance, reducing the number of claims you file is the secret to protecting a significant increase in your insurance rates. Only file a claim in the event of a catastrophic loss is a wise rule to abide by. You might be better off if you handle the cost on your own if your car gets a dent in the bumper or a few shingles blow off the roof of your house.
Filing a claim becomes more financially viable if your house’s entire roof collapses or your car is totaled in an accident. Just keep in mind that your insurance company may decide not to renew your coverage when your policy expires, even though you have coverage and have paid your premiums on time for years.
How Do I initiate a Claim for Insurance?
You can initiate a claim by contacting your insurer if you have an insurance policy and have experienced losses that are covered by it. You can accomplish this over the phone and increasingly online. The insurer will request pertinent information from you once the claim has been initiated, and it may also request evidence (like photos) or supporting documentation. Additionally, the insurer might send an adjuster to speak with you and assess the validity of your claim.
Why Do Insurance Premiums Rise After Making a Claim?
Filing a claim can occasionally result to future increases in insurance premiums. However, this isn’t always the case; for instance, some insurers will overlook the first accident. When you file a claim, your insurer will likely view you as a greater risk than before and raise your rates accordingly. You might be able to stop such an increase if you can show that a claim was made against you when you were not at fault. No matter who is at fault, the insurance company may decide not to renew your policy if you file too many claims in a short amount of time.
If the damage is less than my deductible, should I still file an insurance claim?
It might not make sense to file a claim to your insurance company if the damage you experience is less than your deductible. For instance, it wouldn’t make sense if the estimated damage was $200 but the deductible was $1,000. However, you might want to file a claim even if you believe the other party is entirely to blame and want their insurance to cover your damage. Always consult with your insurance agent before filing a claim.
