Insurance Claims Questions
Buying insurance is a way to protect yourself from uncertainty. Every type of insurance, from auto insurance to health insurance, deals with financially compensating the insurance policyholder if certain unforeseeable losses or expenses occur. When a loss occurs that is covered by an insurance plan, the policyholder must make an insurance claim to inform the insurance company of the loss and request compensation. If you must file a claim, you should read your insurance policy to answer a few basic questions about filing claims.
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Is a Loss Covered by My Policy?
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Insurance policies differ as to what types of losses they cover, even within certain areas of insurance. For instance, one person's auto insurance policy might cover hail damage while another person's might not. Read your insurance policy to make certain a loss you want to claim is covered by your policy. If you are unsure about whether something is covered or not, consider calling a customer service representative.
How Quickly Must I File?
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Insurance companies generally want policyholders to file insurance claims as soon as possible after a loss occurs. In most cases, you must file a claim within a certain time frame, such as 30 days, or the insurance company may not recognize your claim.
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Will My Rates Go Up?
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If you file an insurance claim, there is a chance that your insurance rates will go up. Whether rates will go up depends on the type of insurance and the terms of the policy. For auto insurance, a claim often means you got into an accident which signals you are a risk to insure, which may translate into higher rates. Some insurance plans will forgive the first claim without boosting rates.
How Much Compensation Am I Entitled To?
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The amount of the loss or expense that will be covered by the insurance company depends on a variety of factors such as your deductible, coinsurance rates, the value of the loss and the limits of your insurance policy. The deductible is an upfront cost you pay before receiving any compensation. Coinsurance requires you to pay a certain proportion of a cost, while your coverage limit indicates the maximum amount of money the insurance company will cover. For example, if you have a $25,000 limit on a collision auto insurance plan covering a luxury vehicle and the car suffers $30,000 worth of damage only $25,000 would be covered by the plan after you pay the deductible.
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