What is an insurance claim?
An insurance claim is a formal request by a policyholder to an insurance company for coverage and/or compensation for a covered loss or policy event. The insurance company validates the claim first and, once approved, issues payment to the insured or an approved interested party on behalf of the insured. Insurance claims can cover everything from death benefits on life insurance policies to routine and comprehensive medical exams. 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 claim payments.
How Insurance Claims Work
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 claims involve costs for medical goods and services, physical damage and liability resulting from the operation of automobiles, property damage and liability for dwellings (homeowners, landlords, and renters), and the loss of life.