What is Claim in Insurance? The only reason why someone keeps insurance is so that they can file a claim in the future when an accident has befallen them. Insurance is no easy thing to keep. That is why you need to know how to make a claim in case an accident has occurred. It can cover everything as long as it is in your policy. Therefore, in this article, we will be taking a closer look at what is claimed in insurance.
We are going to be doing a deeper analysis of what a claim is and how you are going to make your insurance claim. There are also times that you would not want to claim on insurance. We are also going to take a look at these instances today. Finally, we are going to end the article with how to file a claim for insurance.
What is Claim in Insurance?
It is simply letting your insurance company know that an accident has occurred and that they need to pay you to fix the damages. Claims work in two ways; it is either they reimburse you for the damages, or the insurance company pays for the damages themselves. The only way to let the insurance company know that you want to make a claim on your insurance is by filing a claim.
After making a claim, the company validates the claim by investigating it. They are also at liberty to remove elements that are not covered by your insurance from your claim. If the claim is accepted by the insurance adjuster and presented to you, and you accept it, then the settlement is paid out. If your claim is outright denied, you have the right to an appeal.
Types of Insurance Claims
Just as there are many types of insurance, there are many different types that you can file if you have a policy for them. There are several types of situations you might be in that might want you to file a claim. However, filing a claim is totally dependent on your policy. What this means is that you cannot find a claim for damage that is not covered by your insurance policy. Below are the different types :
- Auto insurance claim
- Homeowners insurance claim.
- Health insurance claim
- Life insurance claim
How to File an Insurance Claim
Filing one is an easy thing to do. It basically wants you to contact your insurance company with your intention to file a claim. However, filing a claim is not the most important thing. It is gathering the evidence that is very important. In the event of an accident or a home insurance claim, you need to properly document the damage with photos and videos.
Once you have all the proof and evidence you need, you can simply contact your insurance company to file your claim. After filing your claim, it will now take some time before the settlement is paid if your claim is approved.
How will my Insurance Claim be paid?
There are a different number of ways that you can be paid. Your payment is totally dependent on your policy, the type of claim, and other factors. Below is a breakdown of how insurance claims are paid.
- Auto insurance: For auto insurance, the company will make the payment directly to you or directly to the auto repair shop. If you have a loan on the vehicle, the repayment goes directly to the lending company, and if there is a remainder, it goes to you.
- Homeowners insurance: If there is a mortgage on your house, the payment goes directly to the company. Likewise, if there is no mortgage and you own your house outright, the insurance company pays the money directly to you.
- Health insurance: It is either your insurance company pays your medical bills directly or they reimburse you after you have made payment for your medical bills.
- Life Insurance: In life insurance, the settlement is paid directly to your beneficiary and they can decide to receive it instrumentally or in a large sum at once.
Why does filing a claim increase Insurance premiums?
Filing one claim does not increase your insurance premium. However, once the insurance company deems you to be risk worthy, they can increase your insurance premium. The truth of the matter is that your insurance premium will always increase whether you file a claim or not. But they will increase faster if you keep filing claims.
When should I not file an insurance claim?
I always say that it is not every time you need to file one, because some of the time the damage is just not worth filing a claim for. One of the main reasons you should not file a claim is if the damage is very minimal. Another reason is that if the damage is large but it is not up to your deductible, do not file a claim.
FAQs
Do insurance claims affect your credit score?
Filing one does not affect your credit score. There is no type of insurance claim that you will find that will affect your credit score. The only thing is that if the claim has a negative financial consequence, it might indirectly lead to reducing your credit score.
How do I initiate an insurance claim?
To initiate it, you either contact your insurance company by phone or simply head over to their website and fill out the claim form. Once you have done that, you have initiated the claim process, and then the company will start investigating by sending an adjuster.
Should I file an insurance claim if the damage is less than my deductible?
The answer is a big no. Do not attempt to find any if the damage is less than the deductible because you will end up spending more than what you would spend if you fix the damage on your own.
What to do when someone is making a claim against you?
After finding out that someone is making a claim against you, there is nothing you can really do other than get your insurance company involved. If you are at fault, then you are going to pay for it using your insurance. That is why you need to contact your insurance company.
