What Is an Insurance Claim and How Is It Paid?

 What Is an Insurance Claim and How Is It Paid?

An insurance claim is a request to the insurance company for payment after a policyholder experiences a loss covered by their policy. For example, if a home is damaged by a fire and the homeowner has insurance, they will file a claim to begin the process of the insurance company paying for the repairs.

Insurance claims can be made for everything from property damage to injuries resulting from car accidents to annual medical checkups to life insurance death benefits.

Types of insurance claims

Insurance claim definition

An insurance claim is a formal request filed by a policyholder seeking compensation for a covered loss.

There are several different types of insurance claims — the type of claim that you need to file depends on the policies that you have and what they cover.

Car insurance covers property damage or injury to others when you are at fault in an accident. If your auto insurance policy includes collision coverage, you can file a collision claim for damage your car sustains in an accident, regardless of fault. The addition of comprehensive coverage protects against damage caused by something other than a collision, like fire, theft, falling objects and natural disasters.

Most car insurance also includes uninsured and under insured motorist coverage, which helps pay for damage or injuries if the at-fault driver doesn't have insurance or you're the victim of a hit-and-run.

Homeowners insurance covers the structure of your home, your personal property and your liability for injuries to visitors in your home. Homeowners insurance also includes additional living expenses (ALE) coverage, which reimburses you for a rental home or hotel if your home becomes uninhabitable. An insurance company will pay out a homeowners claim if the damage was caused by a peril covered by your policy, like fire, theft or wind.

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Renters insurance pays out claims related to theft of or damage to your personal property, personal liability for damage or injury and additional living expenses if you need to relocate temporarily. Like homeowners insurance claims, renters insurance claims are subject to specific perils.

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Health insurance claims are generally handled by your doctor's office. After your visit, you may pay a copay, and then the doctor's billing department will fill out a health insurance claim form to determine whether you owe a balance.

Most people aren't involved in the claims process until they receive an explanation of benefits stating that their claim is denied or that insurance will only cover a portion of the costs. At this point, you can appeal the decision if you feel that the services should be covered by your plan.

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Life insurance pays a tax-free claim to your beneficiaries after they have provided the insurer with a copy of your death certificate. Life insurance is usually purchased to help your family with daily living expenses, college tuition and funeral expenses.

What does it mean to file an insurance claim?

Filing an insurance claim is the process of letting your insurer know about a loss that you've experienced and requesting that it cover the associated costs. Traditionally, the insured party — also known as the claimant — would fill out a proof of loss form.

Filing a claim has gotten much easier, and many companies offer options to file online, through an app or over the phone with an agent.

When filing an insurance claim, the policyholder must pay a deductible (if applicable) before receiving a settlement check from the insurance company.

How to make a claim

Filing an auto or homeowners insurance claim is a multi step process, and not all claims follow the same order or schedule. The time limit to file a claim varies by state, so it's important to start the claims process as soon as a loss event takes place.

We recommend following this process for a successful claims experience.

7 steps to file a home or auto claim

Step 1: File a police report

If your claim involves a car accident or any illegal activity, such as theft, arson or a traffic violation, contact the police immediately. Don't call 911 unless the situation is urgent — instead, use your police department's non emergency line. Depending on where you live, you may be required to visit the police station and file your report in person.

Step 2: Document any damage

Next, take time to properly document the damage — you'll need to submit photos or videos to your insurer as proof along with your claim.

For car accident claims, take photos or videos of the scene before you move your car if you can do so without endangering yourself or others.

Document property damage claims before you clean up any mess to show your insurer the full extent of the damage.

Step 3: Review your coverage

Before you file your claim, make sure that you understand your coverages, limits and deductibles. Reviewing your policy will help you avoid filing a claim for a loss that isn't covered, or one where the cost of the repairs is less than your deductible. Your agent can help you with the process.

Claims that aren't covered may not affect the cost of your insurance, but they will stay on your record. Making multiple claims in a short period of time can cause your rates to go up because insurers believe that you are more likely to make future claims, regardless of the payout amount.

Step 4: Contact your insurance company

After you've determined whether your damage is covered, you need to file your claim with the insurance company. Many insurance companies allow you to file simple claims online. For larger claims, contact your agent directly or call the phone number listed on your policy.

Before you begin, make sure that you have all of the information regarding your claim handy, including the date of loss, police report (if applicable), receipts for damaged personal property, medical bills for injuries and any other documentation that you plan to use as proof.

Insurer	Phone	File a claim online
Allstate	800-255-7828	Download the mobile app
Farmers	800-435-7764	Start a claim
Geico	877-515-2191	Start a claim
Liberty Mutual	800-225-2467	Start a claim
Nationwide	800-421-3535	Start a claim
Progressive	800-776-4737	Start a claim
State Farm	800-782-8332	Start a claim