An insurance claim is like asking your insurance company for money to cover a loss that your policy covers. The insurance company checks if the claim is true (they might say no). If it’s real, they pay the person with the insurance or someone they approve.
Claims can be about different things, from getting money when someone dies to paying for regular or big medical tests. Sometimes, someone else can ask for money for you. But usually, only the people on the policy can ask for money.
What Is an Insurance Claim?
How an Insurance Claim Works
A paid insurance claim helps protect you from financial loss. When you pay money (premiums) to an insurance company, you create a deal with them. They agree to help if something bad happens, like medical costs, damage to stuff, or accidents.
Common insurance claims are about medical bills, physical harm, deaths, and accidents caused by homes or cars. For insurance about property and problems, the number of claims you make can affect how much you pay (premiums). If you make a lot of claims, the price might go up. Sometimes, if you ask for too much, they might even say no.
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If the claim is because of something you did, like damaging property, your prices will probably go up. But if it’s not your fault, your prices might or might not change. For example, if your parked car gets hit or your house is damaged in a storm, it’s not your fault.
But some things, like your past claims, speeding tickets, natural disasters where you live, or a low credit score, could make your prices go up. Even if your latest claim wasn’t your fault, these things can still cause an increase.
Not all claims make your prices go up the same. Things like dog bites, personal injuries from falls, water damage, and mold might make your prices higher and your insurer less likely to help later. Surprisingly, speeding tickets might not increase your prices, especially the first one. Minor car accidents or small claims for your home insurance might not raise your prices either.
Types of Insurance Claims
Health Insurance Claims
The cost of surgeries or being in the hospital can still be really high. Health insurance helps people avoid huge bills that might cause a lot of money problems. When doctors or hospitals send claims to insurance companies for patients, it’s usually done electronically. This means patients don’t have to do much.
Sometimes, patients need to fill out forms if doctors or hospitals don’t use electronic methods, but the services are still covered. In the end, insurance claims help people avoid big money problems from accidents or illnesses.
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Property and Casualty Claims
A house is usually one of the biggest things someone buys in their life. If something bad happens and it’s covered by the insurance, the claim is first sent online to someone from the insurance company, like an agent or a claims adjuster.
Unlike health insurance, it’s the person who owns the property’s responsibility to tell the insurance company if there’s damage. An adjuster checks the damage, depending on what happened, and figures out how much to pay the person with the insurance. After confirming the damage, the adjuster starts the process to pay the person back or cover the costs.
Life Insurance Claims
When someone with life insurance passes away, you usually need to send a claim form, the death certificate, and sometimes the original policy. If the insurance is for a lot of money, the insurance company might need to look really closely to make sure everything’s okay. They want to check if the death fits the rules of the policy, like not being a suicide or a result of a crime (usually not covered in the first few years of the policy).
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Normally, this process takes around 30 to 60 days if everything’s straightforward. This gives the people who’ll get the money a way to handle things after the person’s death – they can replace the lost income or take care of the final expenses.
Special Considerations
There aren’t strict rules for when insurance rates go up. What one company might let slide, another could remember. Since any claim might raise your rates, knowing your policy is the first step to keeping your money safe. If you understand that your first accident is forgiven or that an old claim won’t hurt you after a few years, you can decide whether to make a claim with a clear idea of its effect on your rates.
It’s smart to talk to your agent about the company’s rules before you even need to make a claim. Some agents have to tell the company if you talk about a possible claim but choose not to make one. That’s why it’s not a good idea to wait until you actually need to make a claim to ask about what your insurer thinks about talking to your agent.
No matter your situation, it’s best to keep the number of claims you make low. It helps keep your insurance rates from going up by a lot. A good guideline is to only make a claim for big losses. If your car gets a small dent or a few parts of your house’s roof blow off, it might be better to handle the costs on your own.
But if your car is wrecked in an accident or your whole house’s roof collapses, it could be more practical to make a claim. Just remember that even if you’ve had coverage and paid your bills for a long time, the insurance company might not renew your coverage when your policy ends.
How Do I Initiate an Insurance Claim?
If you have insurance and something bad happens that the insurance covers, you can start a claim by getting in touch with your insurance company. You can do this over the phone or, more and more often, online. After you start the claim, the insurance company will ask you for important details and might want proof, like pictures or papers. They might also send someone to talk to you and check out the situation to decide if your claim is valid.
Why Does Filing a Claim Increase Insurance Premiums?
Filing a claim might make your future insurance payments higher. But not always – some companies might forgive your first accident. If your rates go up after a claim, it’s usually because the insurance company thinks you’re more likely to have more problems in the future, so they raise the cost. If you can show that a claim wasn’t your fault, you could undo the rate increase. However, if you make many claims really quickly, the insurance company might not renew your policy, even if the claims weren’t your fault.
Should I File an Insurance Claim if the Damage Is Less than My Deductible?
If the damage is lower than what you need to pay before insurance helps (your deductible), it might not be a good idea to tell your insurance company. For example, if you have about $200 in damage but need to pay $1,000 before the insurance helps, it’s probably not worth it. But if you think the other person is totally responsible and you want their insurance to pay, you might want to start a claim anyway. It’s smart to talk to your insurance agent before you do anything.
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