Insurance

What is Claim?

A claim is a request to your insurance company for payment after a covered event—like a car accident, medical procedure, or property damage. The insurance company reviews the claim against the policy terms to determine its validity and calculate the payout amount, subtracting any applicable deductibles or copays. Under the ACA, consumers have the legal right to appeal claim denials.

Filing a claim requires providing supporting documentation, such as medical bills, repair estimates, or police reports. In property insurance, a history of frequent claims can lead to premium increases or policy non-renewal at the end of the term.

Quick Facts

Process ClassFormal request for coverage payout under policy terms

Consumer Rights (ACA)Legally mandated right to appeal claim denials

Cost ImpactsFrequent claims can increase future premium rates

Documentation BaseRequires itemized invoices, police reports, or receipts

PRACTICAL EXAMPLE

A homeowner's roof is damaged by a hail storm. They hire a contractor, obtain an itemized repair quote for $6,000, and file a claim with their homeowners insurance. The insurer approves the claim, subtracts the $1,000 deductible, and issues a payout check for $5,000.

RELATED TERMS

Learn More Key Concepts

DeductibleThe amount a policyholder must pay out of pocket for covered claims before their insurance coverage begins to pay.

PremiumThe periodic payment made by a policyholder to keep an insurance policy active and maintain coverage.

Liability CoverageInsurance paying for third-party bodily injury or property damage for which the policyholder is legally responsible.

Coverage LimitThe maximum amount an insurance company will pay for a covered loss under a policy.

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