What Is an Insurance Claim and How Is It Paid?
policy claims can be made for everything from place price to injuries resulting from car accidents to annual checkup checkups to life policy end benefits .
The requital process can take between a few weeks and a few years depending on the type and size of the title you make .
Types of insurance claims
Insurance claim definition
An insurance claim is a dinner dress request filed by a policyholder seeking compensation for a cover personnel casualty. There are respective different types of indemnity claims — the character of claim that you need to file depends on the policies that you have and what they cover .
Car insurance covers place damage or wound to others when you are at fault in an accident. If your car indemnity policy includes collision coverage, you can file a collision claim for damage your car sustains in an accident, careless of fault. The addition of comprehensive coverage protects against wrong caused by something other than a collision, like fire, larceny, falling objects and natural disasters .
Most car indemnity besides includes uninsured and underinsured motorist coverage, which helps pay for price or injuries if the at-fault driver does n’t have insurance or you ‘re the victim of a hit-and-run .
Homeowners insurance covers the structure of your dwelling, your personal property and your liability for injuries to visitors in your home. Homeowners policy besides includes extra be expenses ( ALE ) coverage, which reimburses you for a lease home or hotel if your home becomes uninhabitable. An insurance company will pay out a homeowners claim if the damage was caused by a hazard covered by your policy, like fuel, larceny or weave .
Renters insurance pays out claims related to larceny of or damage to your personal place, personal liability for price or injury and extra know expenses if you need to relocate temporarily. Like homeowners insurance claims, renters insurance claims are discipline to specific perils .
Health insurance claims are generally handled by your doctor ‘s office. After your travel to, you may pay a copay, and then the doctor ‘s bill department will fill out a health indemnity claim form to determine whether you owe a counterweight .
Most people are n’t involved in the claims summons until they receive an explanation of benefits stating that their claim is denied or that policy will only cover a fortune of the costs. At this point, you can appeal the decision if you feel that the services should be covered by your plan .
Life insurance pays a tax-exempt claim to your beneficiaries after they have provided the insurance company with a copy of your death security. Life policy is normally purchased to help your family with casual living expenses, college tutelage and funeral expenses .
What does it mean to file an insurance claim?
Filing an indemnity claim is the process of letting your insurance company know about a loss that you ‘ve experienced and requesting that it cover the consort costs. traditionally, the guarantee party — besides known as the claimant — would fill out a proof of loss form .
Filing a claim has gotten much easier, and many companies offer options to file on-line, through an app or over the call with an agent .
When filing an policy claim, the policyholder must pay a deductible ( if applicable ) before receiving a settlement check from the insurance company .
How to make a claim
Filing an car or homeowners policy claim is a multistep process, and not all claims follow the same order or schedule. The time limit to file a claim varies by state, so it ‘s authoritative to start the claims process vitamin a soon as a loss consequence takes place .
We recommend following this action for a successful claims feel .
7 steps to file a home or auto claim
Step 1: File a police report If your claim involves a car accident or any illegal action, such as larceny, arson or a traffic rape, contact the patrol immediately. Don’t call 911 unless the situation is urgent — alternatively, use your police department ‘s nonemergency agate line. Depending on where you live, you may be required to visit the police place and file your report in person .
Step 2: Document any damage
following, return time to by rights document the damage — you ‘ll need to submit photos or videos to your insurance company as proof along with your claim .
For car accident claims, take photos or videos of the setting before you move your car if you can do therefore without endangering yourself or others .
Document place damage claims before you clean up any fix to show your insurance company the wide extent of the damage .
Step 3: Review your coverage Before you file your claim, make certain that you understand your coverages, limits and deductibles. Reviewing your policy will help you avoid filing a claim for a passing that is n’t covered, or one where the cost of the repairs is less than your deductible. Your agent can help you with the process .
Claims that are n’t covered may not affect the cost of your indemnity, but they will stay on your record. Making multiple claims in a unretentive menstruation of time can cause your rates to go up because insurers believe that you are more likely to make future claims, regardless of the payout sum. { “ backgroundColor ” : ” ice ”, ” content ” : ” \u003C\/p\u003E\n\n\u003Cp\u003EClaims that are n’t covered may not affect the price of your policy, but they will stay on your record. Making multiple claims in a brusque period of fourth dimension can cause your rates to go up because insurers believe that you are more likely to make future claims, careless of the payout amount.\n ”, ” padding ” : ” doubling ” }
Step 4: Contact your insurance company After you ‘ve determined whether your damage is covered, you need to file your claim with the indemnity company. many indemnity companies allow you to file simple claims online. For larger claims, contact your agent directly or call the phone number listed on your policy .
Before you begin, make sure that you have all of the information regarding your claim handy, including the go steady of loss, patrol report ( if applicable ), receipts for damaged personal property, medical bills for injuries and any other documentation that you plan to use as proof .
Step 5: Prepare for the insurance adjuster once you ‘ve filed a call, your insurance company will send an adjuster to evaluate the wrong. It ‘s the adjuster ‘s job to determine how a lot your policy ship’s company will pay out .
You may not need to be present during the adjuster ‘s visit. however, walking your adjuster through the damage can be helpful. Speaking with your adjuster will give you an opportunity to show them the price, discuss your call and ask questions about your policy .
You can expect an policy adjuster to :
- Inspect your home or vehicle.
- Review your policy to make sure that the damage is covered.
- Interview you regarding the incident.
- Request contact information for anyone who has information about the claim, like doctors, lawyers or witnesses.
You do n’t need to get repair estimates before meeting with your adjuster, but it can be helpful, particularly for large claims. Sharing the quotes with them can give penetration into what local contractors or car shops will charge for the repairs. Some businesses have a lot of experience with indemnity claims and may even help you through the process. { “ backgroundColor ” : ” ice ”, ” content ” : ” \nYou do n’t need to get animate estimates before meeting with your adjuster, but it can be helpful, specially for bombastic claims. Sharing the quotes with them can give insight into what local contractors or car shops will charge for the repairs. Some businesses have a distribute of know with insurance claims and may even help you through the process.\n ”, ” padding ” : ” double ” }
Read more: The 7 Best Car Insurance Companies (2022)
Step 6: Review the settlement offer
After your adjuster sends their report to the policy company, you ‘ll receive a settlement offer. It’s important that you review the offer carefully because after you accept it, your claim will be closed. If you ‘re not felicitous with the liquidation, you can dispute the claim by asking the ship’s company for a moment revue or hiring a public adjuster or lawyer .
Step 7: Receive the claim payment and repair the damage once you ‘ve signed the settlement agreement, your insurance company will pay the agreed-upon measure, minus your deductible. If your policy claim involves place damage, you can move advancing with hiring a professional to make repairs .
How do insurance companies pay out claims?
The requital summons is unlike for every title and is influenced by the type and size of the claim you make. Smaller claims take less time to march and are more aboveboard, so you may receive a liquidation check from your adjuster on the spot. When you make a larger claim, you can expect to receive multiple indemnity checks throughout the haunt action .
Auto insurance settlement
If the cost to repair your car is less than its overall value, your insurance company will issue a village check to cover the rectify bill. respective factors dictate how the payout process works :
- If you own your car outright, the insurance company may send a check directly to you.
- If you choose to have the repairs made at one of your insurer’s preferred auto body repair shops, your insurance company will likely send the check directly to the shop.
- If you have a lease or loan on your vehicle, then your loan company is named on your insurance policy — therefore the insurance check may be made out to both you and the lender. Your loan company may simply verify that your car was involved in an accident and sign the check over to you, or it might ask you to sign the check over to the loan company so that it can pay the repair company directly.
If the monetary value to repair your car is more than its actual cash value, your insurance company will consider it to be totaled. rather of paying to repair your cable car, the insurance company will send you a liquidation check that is equal to the car ‘s pre-accident value .
If you own your car outright, you can use the check to purchase a new vehicle. however, the money is yours, and you can choose to spend it however you like .
If you have a loan on your car, the insurance check will go toward paying off the remaining symmetry .
Home insurance settlement
Most home indemnity claims are paid with multiple checks because claims are by and large more building complex and repairs take longer to complete .
sometimes, the policy adjuster will give you an advance on the total settlement amount at the end of their inspection so that you can get the repair march started. In this case, you can accept the discipline right field away — it does n’t mean that you ‘re bound to their initial liquidation offer .
If your insurance claim includes damage to the structure of your home, your personal belongings and extra live expenses — besides known as ALE insurance — you will normally receive separate settlement checks for each insurance category .
Along with receiving multiple policy checks, the way that your claim is paid out can vary based on several factors :
- If you have a mortgage on your home, then the loan company is named on your insurance policy. Settlement checks that cover repairs will be made out to both you and the mortgage company — the company has a financial interest in your property and wants to ensure that the repairs are being made. Your lender may put the money into an escrow account and pay the contractors directly as the work is completed.
- The insurance company can send payments to your contractor if you sign a direction to pay form. It’s important that you discuss this with your insurance professional before signing because some direction to pay forms can assign your entire claim over to your contractor, which gives them control over the claim. If you do choose to have payments sent directly to your contractor, make sure that you inspect the repair work thoroughly before your insurer sends the final payment and the claim is closed.
Checks for personal belongings and additional living expenses should be made out to lone you. If your personal place is insured at refilling cost, you will normally receive two checks :
- The first insurance check will be based on the cash value — or depreciated amount — of the damaged items, so that your insurer can match the exact cost once you purchase replacements. If you decide not to replace the items, you can use this money however you like.
- Once you provide the insurance company with receipts showing that you have purchased the replacements, it will send the final settlement check for the difference between the cash value and what you paid for new items.
How long does it take to get an insurance check?
Depending on the total of damage, settling policy claims can take anywhere from a few weeks to a few years. For example, if you were involved in a cable car accident and lone had child price, the process may be rather immediate. however, if your entire home plate needs to be rebuilt after a fire, the construction may take a few years to complete. In that case, you ‘ll receive multiple checks, including an progress on the colony improving front to get repairs started .
Can you keep insurance claim money?
If you own your car outright, you can use auto insurance claim money for anything you like. however, your policy policy will not pay for secondary repairs resulting from the initial damage if you choose not to fix it .
The same holds dependable for homeowners insurance claims if you do not have a mortgage. once in a while, you may have home indemnity call money left over after repairs are made, which is yours to keep unless your indemnity policy states that fresh funds need to be returned .
When not to file an insurance claim
insurance companies keep a record of all filed claims, whether they ‘re paid out or not. not all claims will result in an addition in your indemnity costs, specially if they ‘re humble, but multiple small claims within a short circuit clock time time period much lift rates .
Before you decide to file an insurance claim, review your policy to make certain that the wrong or passing is covered. If you ‘re diffident, you may be able to get some insight by calling your insurance agentive role .
For little claims, consider whether the cost of repairing the wrong or replacing items is significantly higher than your deductible. For exemplify, if your calculator is stolen and would cost $ 1,200 to replace but your deductible is $ 1,000, it may not be worth adding a claim to your record to receive a $ 200 indemnity payout. { “ backgroundColor ” : ” ice ”, ” content ” : ” \u003C\/p\u003E\n\n\u003Cp\u003EFor humble claims, consider whether the monetary value of repairing the price or replacing items is significantly higher than your deductible. For case, if your calculator is stolen and would cost $ 1,200 to replace but your deductible is $ 1,000, it may not be deserving adding a call to your record to receive a $ 200 policy payout.\n ”, ” padding ” : ” double ” }
What happens when an insurance claim is made against you?
When person makes a title against your insurance, your indemnity company will work to determine whether you were at blame in the incident .
If you were involved in a car accident, your policy company will review police reports and witness statements to determine whether you were more than 50 % responsible for the collision. When your insurance company determines that you were the at-fault driver, your insurance cost can increase up to 46% if you ‘re not enrolled in an accident forgiveness course of study .
If person is injured in your home, it ‘s best for you to file a indebtedness claim with your own indemnity so that you can tell your side of the narrative and potentially have the claim dropped. Liability claims are frequently dearly-won for indemnity companies and normally result in a significant increase in rates — or even cancellation of your policy .
Disputing a claim
If you are n’t satisfied with your auto insurance claim village, you feel that your claim was incorrectly denied or your car was not properly fixed after an accident, you can dispute the claim by contacting your state of matter ‘s policy department and submitting a ailment. car policy is regulated at the state level, and most states have a division that deals specifically with policyholder issues .
You can besides hire an lawyer to represent you. however, the cost may outweigh any increase in your village .
To dispute a home insurance claim or settlement offer, you can start by asking the indemnity caller to review your call. If you are n’t able to find a resolution with the insurance company, you can hire a public policy adjuster to give you an mugwump estimate for the damage. Their estimate will either confirm that your insurance company ‘s liquidation offer is accurate or provide tell that you can show your insurance company to request an adjustment. In the event that a public adjuster finds the indemnity settlement to be lacking and your insurance company refuses to meet your requests, you can file a complaint with your submit ‘s indemnity department and hire an lawyer .
Frequently asked questions
Can you cancel an insurance claim?
Most indemnity companies will allow you to cancel or withdraw a claim, american samoa long as you are the person who filed it. The claim will remain on your criminal record but will show a $ 0 payout, and it should not affect your indemnity rates unless you ‘ve made multiple claims over a short-change fourth dimension time period.
How soon can you file a claim after getting insurance?
You can file an insurance title american samoa soon as your policy become active voice, but the loss has to take place while the policy is in effect. For example, if you get in a car accident on the same day that your policy policy becomes active, you can file a claim. however, if you were in an accident the day before you purchased your policy, you could not file.
What happens when insurance can’t get a hold of the person at fault?
When your indemnity company is n’t able to contact the driver who caused an accident, it will try to contact the person ‘s policy company directly. If the policy information is not available or the other policy company is not cooperating, your insurance company will generally cover the title under your uninsured/underinsured motorist coverage. This type of claim will not raise your rates.
Can you file a claim with two insurance companies?
There is no police against having two policy policies that cover a one vehicle or home. however, most policies have an “ other insurance article, ” which states that each policy will only pay for a helping of the damage. insurance is meant to make you whole after a loss, and this clause ensures that you do n’t benefit financially from an insurance transaction.
Can you get insurance after a claim?
You can get indemnity after filing a claim, but depending on the type and size of claim you file, the cost of your insurance may go up. After very large claims where you are at defect, your policy company may choose not to renew your policy at the end of the policy menstruation. Depending on where you live, insurance companies are required to give you a 30- to 60-day notice when deciding not to renew your policy so that you have adequate clock time to find a new insurance company .