Finance term
Insurance Claim
Also known as: insurance claim, filing a claim
Definition
An insurance claim is a formal request to an insurer for payment under the terms of a policy after a covered loss or event occurs. The insurer reviews the claim against policy terms, investigates the loss if needed, and pays the benefit (or denial) within applicable state-mandated timeframes.
Detailed explanation
Filing a claim triggers the insurer's claims adjustment process. After submission, an adjuster evaluates coverage applicability, investigates the cause and extent of the loss, and determines the indemnity amount — subject to your deductible, coinsurance obligations, coverage limits, and any exclusions in the policy.
State laws mandate prompt payment: most states require acknowledgment within 10 business days and final resolution within 30–45 days of receiving all documentation. The NAIC's model unfair claims settlement practices act sets the national baseline, though each state enacts its own version.
Frequency and severity of claims affect your future insurance premium at renewal. Most insurers track claims history through the Comprehensive Loss Underwriting Exchange (CLUE) report — an industry database analogous to a credit report for insurance. Reviewing your CLUE report before shopping for coverage is a good practice; errors can be disputed under the FCRA.
◈ Worked example
- A homeowner files a claim after a tree falls on the roof during a storm; the adjuster estimates $18,000 in repairs; the insurer pays $17,000 after a $1,000 deductible.
- An auto insurance claim for a minor fender-bender: if the repair cost is close to the deductible, paying out-of-pocket may be better than triggering a premium surcharge at renewal.
Common questions
The most-asked questions about Insurance Claim — answered straightforwardly.
How long does an insurance company have to pay a claim? +
Timelines vary by state and policy type, but most states require the insurer to acknowledge a claim within 10 business days and pay or deny within 30–45 days after receiving complete documentation. Check your state insurance commissioner's website for exact rules.
Will filing a claim always raise my premium? +
Not always — it depends on your insurer, claim type, history, and policy terms. Some policies include 'claim forgiveness' for a first or minor claim. Frequency matters more than a single event.
Further reading
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