Teresa Franklin3/11/2021 5:08:38 AM 6/23/2021 5:14:15 AM
Are you an insurance policyholder and want to file an insurance claim? Then you’ve come to the right place! Here’s a complete walkthrough on what insurance claims are, how they work and how you can get paid for your loss?
What is an Insurance Claim?
In case of any unfortunate incident covered by the insurance policy, you can make a formal request to your insurance policy provider called the "Insurance Claim." An Insurance Claim binds that provider to pay for the damages encountered during that incident. But before you receive any payment check from your insurance provider, the insurance company makes sure that the occurred incident falls under that insurance policy's conditions. For that, the company sends an insurance investigator to investigate the situation. The investigator observes the situation and reports back to the company. If the claim is authenticated and confirmed, the insurance company sends you the relevant amount of money to cover your losses.
There are some restrictions and rules you need to take care of before claiming the insurance, and you should be able to interpret the severity of the situation before filing a claim.
When should you file a claim?
It is advised to claim for the insurance if the situation falls under a particular criterion such as,
- When you are involved in an automobile accident, either you or any other person faces some health hazard.
- When there is devastating damage to your property that you can’t afford to pay for yourself, for example, in the situation where your car is destroyed, and you’re eyeing up on a considerable amount to make it whole again, it is probably the best time to request a claim.
- When you can’t figure out who is at fault during an incident.
- During a colossal geographic discrepancy resulting in heavy property damages.
When not to file a claim?
The answer to this question is simple! Know what your insurance covers and what your deductible amounts are. To have an advantage in the long run, do not make insurance claims over insignificant losses or repairs. Having a high deductible amount will offer you protection against immense losses as well as complex long-term premiums.
The concept of an insurance premium and deductibles: The amount of money you pay for your insurance is considered an insurance premium. This money acts as an income for the insurance company. In comparison, a deductible amount is the amount of money you must pay in case of an incident before your insurance claim comes into play. Almost all insurance policies contain deductible amounts, and these amounts may vary.
Contacting the company: After making sure of the severity of the situation, contact the insurance agent assigned to you to file a claim. There are some clarifications you may require from your agent, such as,
- Who should you report your request to in case of an accident?
- How long should you wait before filing a claim?
- What are some basic details you need to fill out to file an insurance claim?
But before requesting an insurance claim, you need to understand how does an insurance claim works?
How does an insurance claim work?
After making all the necessary observations, you can finally file for an insurance claim if you feel like it. How your insurance claims process would shape up depends on the company’s policies and the situation. There are various factors on which your insurance claims processes are dependent.
In major cases, the insurance claims process depends on the deductible amount. You should make sure if your deductible amount is covering the damages or not. For example, if you are involved in an automobile accident, and the damage to your car requires a 1500$ worth of repair. If you have a 1200$ deductible on your accidental coverage, you should consider whether to go through the insurance claim process for 300$ or not.
Impact on Insurance Premiums:
Insurance premium rates have a direct relation with the number of insurance claims filed. So, if you file a more significant number of insurance claims, chances are, your coverage gain rates (Insurance premiums) may also increase with it. If you have filed a claim based on the damage to your property that you are responsible for, your coverage gain rates will see a spike. But if someone else or some other factors are responsible for the damage, then you may or may not observe an increase in insurance premium rates.
The significance of insurance claims varies from situation to situation. Some conditions can have adverse effects on your insurance premium rates, such as self-injury claims, regular speeding tickets, recurring automobile incidents, and frequent natural disaster occurrences in your area.
Some factors may drive your insurance provider to deny you coverage, such as:
- If an incident or an accident was avoidable, or you were the cause of that incident.
- Any medical proof that you suffered from an injury.
- If some pre-existing medical condition causes the injury.
- Small, frequently occurring accidents and mishaps.
- Too many insurance claims can also drive your insurer to deny you coverage.
What should be the type of claim?
Your insurance claim process depends on the type of claim made. The most common types of insurance claims are:
Health Insurance Claims:
Nowadays, medical procedures and hospital expenses are costly. Huge financial setbacks can be avoided by adopting a good health insurance policy. There are many good health insurance providers, such as Aviva, a British multinational insurance company that provides a wide range of high-quality hospitals and private facilities with suitable insurance policies.
Life insurance claims:
Several insurance companies provide life insurance and getting life insurance is a big step for you and your family, so don’t be hasty about it. Progressive Casualty Insurance Company provides a good life insurance policy where separate insurance coverage packages are offered. The different packages they offer include Term life insurance, Whole life insurance, Universal life insurance, and Final expense insurance. Here you can make an account on Progressive claims, which is an online portal where you can easily report or view a claim.
The life insurance claims process may involve the compliance of some documents, including a claim form, a death certificate of the insured, and an original policy document. The insurer, in this case, can investigate whether the death of the insured person falls under the policy or not. If the insured died due to some criminal act or via suicide, then the insurer has a right to deny the insurance.
Property or accidental claims:
Damage to an insured person’s property may follow some other protocols. For examining the extent and the reason for the damage, the insurance companies usually send an insurance adjuster. An insurance adjuster verifies whether the damage held to the property deserves compensation or not. After validation, the adjuster pays for the relevant insurance money for the damage. Insurance companies like Great Eastern provide flexible home insurance policies to protect your property against fire and theft, along with worldwide personal liability coverage.
How do insurance companies pay out claims?
After making sure that the insurance claim that you have filed is appropriate, they’ll define the amount needed to be compensated for the damage and issue the payment. Anything that leads to exclusion from the policy, such as non-payment of premium rates, frequent damages to the property in a short interval of time, or the situation where you are at fault, may result in a coverage denial.
The insurance company may deal with the vendors directly and pay them on your behalf, or they may hand out a check directly to you. There is a misconception that some people get more money for the same amount of damage than others due to a better insurance company. This concept is entirely wrong; they may receive more money because of their selected coverage options during insurance policy purchasing (they pay high premium rates). The total amount you will receive may depend on:
- The type of claim you file.
- The extent of damage you have conceived.
- The coverage policy you have accepted.
- Some other explicit facts of your claim.
Even if the various insurance companies use the same payment management system, the claim handling procedures of those companies may vary. If you’re worried about how much you’re going to get paid when you file a claim, look at the type of coverage, you have. When the claim processes are adequately performed, insurance companies hand out a payment check for the damages, making this process even simpler. Communication is the key here; the better you’re involved with your insurance company, the more chances you will end up in a favorable position. The type of coverage determines the amount of payment for your claim.
Actual Cash Value Claims Settlements:
If you have an "Actual Cash Value Settlement," you're only going to receive the loss's denigrated value. It means that you're not going to get paid enough to replace the damaged item. For example, you bought your car for 4000$ some time ago, and now the actual cash value for that car is 2000$. If you insured that car for the actual cash value during a claim filing, you're going to get almost half of the amount you lost in this scenario. Due to this, you can't afford to replace the car you lost.
Replacement Cost Claims Settlements:
If you have a “Replacement Cost Settlement,” then your insurance provider will ensure that you receive the proper coverage for replacing or repairing the insured item. You need to make sure that the policy you have accepted provides appropriate coverage to cover the expenses at the time of loss. This policy allows you to get into the situation you were in before your loss. And that is why it is preferred over the actual cash value settlement type of claim.
The Travelers Company has a very suitable way of paying out the claims. Firstly, you can submit your claim online through Travelers Insurance Claims, and then you can check the status of claims at their “Claim Center”. After they receive your request, a thorough calculation is carried out for the value of the loss. Then, an already agreed upon deductible is subtracted from the payment, and after that, they directly issue the payment to you either through a bank or via mail. Admiral car insurance provides a wide range of coverage packages for unfortunate damages your car may receive. They provide:
• Multi-car insurance deals.
• Car sharing insurance.
• Electric or classic car insurance.
• Van insurance.
It is very clear from the Admiral Car insurance policies that they will look out for any unpaid premiums and deductibles after the claim review. They will subtract those from the payment and hand out the payment to you. In case your car is a total wreck, a substitute vehicle won’t be provided to you.
Can you keep the money from an insurance claim?
It depends on your insurance provider whether they directly hand you the check or pay the vendors themselves. If they directly hand you the payment either physically (through a check) or electronically (via a bank account), the answer to the question becomes "Yes! You can keep that money." The company paid out the claim after making proper investigations and calculations, hence fulfilling their role. It's up to you now, how you use that money, as long as the state's law or the coverage policy allows it.
You can keep that money or use that money to recover the loss you have suffered; it's completely up to you. But sometimes, it is not the right thing to do because keeping the money that was sent for the repairs is like jeopardizing your life's safety. Moreover, if you have claimed damage, you can't file a claim for the same damage, and claiming the same damage in the future for another accident could get you penalized with fraud. If the amount turns out to be more than what is required for the repair, then you can keep the rest of the amount for yourself.
So, after reading this guide, you are now familiar with what insurance claims actually are and how you can properly assess the condition before filing an insurance claim. After this, you were enlightened with how insurance claims work and their policies regarding the damage payment. We gave you a thorough outline of the terms and conditions of the claims, provided you with suggestions under certain circumstances and examples of how different insurance companies handle insurance claims. Now, you’re all set and ready to file an insurance claim. If you like our information, then make sure you share it with your friends too.
Check out below Insurance Claim templates, or browse further through our website to get useful content: