Claim
What Is a Claim?
A claim is a formal request made by a policyholder to an insurance company asking for payment or coverage for a loss that is covered under an insurance policy. Claims are filed when events such as accidents, property damage, illness, or theft occur.
The insurance company reviews the claim to determine whether the event is covered and how much compensation should be paid.
Why It Matters
Insurance exists to protect individuals from financial losses. Filing a claim is the process that allows policyholders to access that protection when something unexpected happens.
Understanding how claims work helps policyholders navigate the process and receive the benefits outlined in their insurance policy.
How a Claim Works
When a covered loss occurs, the policyholder typically follows these steps:
- notify the insurance company
- submit documentation describing the loss
- cooperate with claim investigations
- receive payment if the claim is approved
An insurance adjuster may review the damage or circumstances to determine the appropriate payout.
Example
If a homeowner’s roof is damaged during a storm, the homeowner may file a claim with their homeowners insurance company to cover repair costs.
Claim vs Insurance Coverage
- A claim is the request for payment after a loss occurs.
- Insurance coverage refers to the protection provided by the policy before a loss happens.
FAQs About Claims
When should a claim be filed?
Claims should be filed when a covered loss occurs under the insurance policy.
Can a claim be denied?
Yes. Claims may be denied if the loss is not covered by the policy.
Do claims affect insurance premiums?
In some cases, multiple claims may lead to higher premiums.
Related Terms
