An Insurance Policy Claim

You must file a claim to receive compensation from your insurer.

While insurance is designed to compensate policyholders for their financial losses, insurance companies do not hand out money arbitrarily. To receive payment, policyholders must follow the claims process as outlined in their insurance policy. Failure to do so could delay the investigation and subsequent settlement, or possibly even result in the denial of the claim.

Filing the Claim

To start the claims process, the policyholder must notify her insurance company of the event, such as an auto accident, house fire or theft of property. In some cases, if the event results in serious injury or death of the policyholder, another party may need to file the claim. Most insurance policies contain information as to how to file the claim, and insurers typically require that claims be reported within a specific time frame.

Investigation

After the claim is filed, the insurer assigns an investigator known as a claims adjuster, or examiner in the case of life insurance, to investigate the circumstances surrounding the claim. The investigator obtains statements from the policyholder and witnesses and examines any related damage. He also looks for discrepancies in the statements to ensure that the parties are telling the truth to protect the company against insurance fraud. In auto or homeowners insurance claims, the adjuster will prepare an estimate that indicates the dollar amount of any damages.

Settlement Offer

At the conclusion of the investigation, the investigator will offer a settlement amount to the policyholder. With life insurance, the settlement is usually determined by the face amount of the policy minus any outstanding loans. With auto or homeowners insurance, the adjuster will determine the value of the property based on the method used by the particular company. In some cases, the investigator may even deny the claim if she believes that the event does not meet the definitions and conditions of the policy or if she suspects fraudulent activity.

Accepting the Offer

The policyholder may elect to accept or decline the insurer's settlement offer. In some cases, such as with auto or homeowners insurance, the policyholder may wish to negotiate a higher settlement amount, as adjusters typically offer the lowest amount they feel they are legally obligated to pay. If the policyholder feels that the adjuster is negotiating in bad faith or that a claim has been wrongly denied, he can appeal the decision by following the procedure indicated in the policy.

References

• Insure.com: How to Maximize the Insurance Claims Process
• Bankers Insurance Group: Claims