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What is an ‘Insurance Claim’
An insurance claim is a formal request to an insurance company asking for a payment based on the terms of the insurance policy. The insurance company reviews the claim for its validity and then pays out to the insured or requesting party (on behalf of the insured) once approved.
Insurance claims cover everything from death benefits on life insurance policies to routine health exams at your local doctor. In many cases, third parties file claims on behalf of the insured person, but usually only the person(s) listed on the policy is entitled to claims payment.
BREAKING DOWN ‘Insurance Claim’
A paid insurance claim serves to indemnify a policyholder against financial loss. An individual or group pays premiums as consideration for completion of an insurance contract between the insured party and an insurance carrier. The most common insurance contracts revolve around costs for medical goods and services, physical damage or liability resulting from the operation of automobiles, property damage or liability from home ownership, and the loss of life.
Life insurance Claims
Life insurance claims require the submission of a claim form accompanied by a death certificate. The process, especially when claims involve high face amounts, may require in-depth examination by a carrier to ensure that the death of the covered individual did not fall under any exclusion contained in the contract, such as suicide or death resulting from a criminal act. Generally, the process takes about 30 to 60 days without extenuating circumstances, affording beneficiaries the financial wherewithal to replace the income of the deceased or simply cover the burden of final expenses.
Formalities for a death claim
When a person with a life insurance policy – called a life assured – dies, a claim intimation should be sent to the insurance company as early as possible. The assignee or nominee under the policy can do this. So can any close relative or the agent who handles the policy.
The claim intimation should contain information like the date, place and cause of death. The insurance agent has the duty to help the life assured’s family/ assignee to deal with the insurance company to fulfil the formalities for a claim.
The insurance company will respond to this intimation and will ask for the following documents:
- Filled-up claim form (provided by the insurance company)
- Certificate of death
- Policy document
- Deeds of assignments/ re-assignments if any
- Legal evidence of title, if the policy is not assigned or nominated
- Form of discharge executed and witnessed
Other documents such as medical attendant’s certificate, hospital certificate, employer’s certificate, police inquest report, post mortem report etc could be called for, as applicable.
Health Insurance Claims
Costs for a surgical procedures or inpatient hospital stays remain prohibitively expensive. In 2014, the average cost across the United States for a day in a hospital sat at $2,212. Individual or group health policies indemnify patients against financial burdens that may otherwise cause crippling financial damage. Health insurance claims filed with carriers by providers on behalf of policyholders require little effort from patients, as 94% of medical claims were adjudicated electronically in 2011, a 19% increase from 2006. Policyholders must file paper claims where medical providers do not participate in electronic transmittals but charges result from covered services rendered by professionals or facilities. Ultimately, an insurance claim protects an individual from the prospect of large financial burdens resulting from an accident or illness.
How To Make a Claim – Health – Formalities for a health insurance claim
You can make a claim under a Health insurance policy in two ways:
- On a Cashless basis and
- A Reimbursement Claim
On a Cashless basis: For a claim on cashless basis, your treatment must be only at a network hospital of the Third Party Administrator (TPA) who is servicing your policy. You have to seek authorisation for availing the treatment on a cashless basis as per procedures laid down and in the prescribed form. Please read the policy document as soon as you receive it to familiarise yourself with the process rather than wait for a claim to arise.
Claims on reimbursement basis: Read the clause relating to claims in your policy document as soon as you receive it to ensure that you understand the procedure and the documents required for making a claim on reimbursement basis. When a claim arises you should inform the insurance company as per procedures required. After hospitalisation, you have to ensure that you obtain and keep ready documents such as claim form, discharge summary, prescriptions and bills that you should submit for a claim.
How To Make a Claim – Motor – Formalities for a motor insurance claim
A claim under a motor insurance policy could be
- For personal injury or property damage related to someone else. This person is called a third party in this context) or
- For damage to your own, insured, vehicle. This is called an own damage claim and you are eligible for this if you are holding what is known as a package or a comprehensive policy.
Third Party Claim
In a third party claim, where your vehicle is involved, it is important to ensure that the accident is reported immediately to the police as well as to the insurance company.
On the other hand, if you are a victim, that is, if somebody else’s vehicle was involved, you must obtain the insurance details of that vehicle and make an intimation to the insurer of that vehicle.
Own Damage Claim
In the event of an own damage claim, that is, where your own vehicle is damaged due to an accident, you must immediately inform insurance company and police, wherever required, to enable them to depute a surveyor to assess the loss.
Do not attempt to move the vehicle from the accident spot without the permission of police and the insurance company.
Once you receive permission for removal of the vehicle and for repairs, you can do so.
If your policy provides for cashless service, which means you do not have to pay out of your pocket for covered damages, the insurance company will pay the workshop directly.
In either of these situations, you must intimate the insurance company immediately.
If your vehicle is stolen, you must inform the police and the insurance company immediately. In addition you must keep the transport department also informed.
As soon as you receive the policy document, read about the procedures and documentation requirements for claims rather than wait for a claim to arise.
If you have to make a claim, ensure that you collect all the required documents and submit them along with the requisite claim form duly filled in, to the insurance company.
There may be certain specific documentation requirements for specific types of claims. For instance in respect of a theft claim, there is a special requirement that you should surrender the vehicle keys to the insurance company.
Property and Casualty Claims
A home is typically one of the largest assets an individual owns. A claim filed against damage from covered perils is initially routed via phone or the internet to a representative of an insurer, typically an agent or claims adjuster. Unlike health insurance claims, the onus is on the policyholder to report damage to a deeded property he owns. An adjuster, depending on the type of claim, inspects and assesses damage to property for reimbursement to the insured. Upon verification of the damage, the adjuster initiates the process of reimbursing the insured.
Formalities for making a property insurance claim
There could be several types of policies that cover property and the property itself could be stationery – like a building, or moving around – like your household goods being transported.
When you receive your policy familiarise yourself with the documents required for a claim as well as the procedures to be followed.
Whether or not a claim arises you must follow the various dos and don’ts in respect of your property for the duration of the policy. These dos and don’ts are termed warranties and conditions in your policy document.
In general, losses and damages, including those due to theft, fire and flood need be intimated to the relevant authorities such as the police, the fire brigade and so on. It is important to ensure that you intimate your insurance company to enable it to send a surveyor for surveying and assessing the loss.