You may be confused about how the Insurance claim settlement works if you are new to filing an insurance claim. The Insurance Claim Settlement process depends mainly on your insurance company and what your policy covers.
This article is going to give you a step-by-step guide on how to carry out this process successfully.
Insurance Claim Settlement
An insurance claim is simply a request made by a policyholder to his or her insurance company to receive payments for damage or loss that the policy covers. When the claim is filed, the insurance company goes into investigation and may decide to approve or deny the claim.
If the claim is eventually approved, the insurance company issues compensation to the policyholder or any other approved party.
What is Claim Settlement?
Claim settlement is all the activities involved in filing an insurance claim and determining the compensation paid out to the policyholder. The process of claim settlement is very important because it helps individuals get the funds, they need to cover a loss or damage that their policy covers.
One important tip that will help you achieve a successful claim settlement is to review your policy and understand what it covers.
How to File an Insurance Claim
As earlier stated in this article, the process for filing a claim depends on the type of insurance policy and your insurance company. However, the general steps for filing a successful insurance claim are discussed below:
- Contact the Police. Contacting the police when you get involved in an auto crash or if your home got broken into is a very important step. In an auto accident, you must contact the police if someone is injured. A police report will also make the claim process much easier.
- Document everything that took place. If it is an accident that happened, you can exchange contact with the other driver. Ensure you collect the other driver’s name, address license plate, and registration number, and insurance policy number if he or she is at fault.
- The next step after this is to contact your insurance company. You can contact your insurance company online, with a mobile app, or over the phone. You should know how to contact your insurance agent.
- Let your insurance company representative know you want to file a claim. The representative will guide you on how to file the claim and the documents you are required to submit.
- When this is done, an adjuster will be assigned to investigate the claim. The Insurer will interview other parties involved in the claim. He or she will also review your policy to ensure that the claim you are filing is covered under your policy. Lastly, the insurance claim adjuster will determine how much you are to receive as a payout from your insurance company.
Note that most insurance companies will not give you full compensation. With this, you have to negotiate your claim payout. If your claim is denied, you may have to file an appeal with your insurance company or with a third-party lawyer.
Methods of Claim Settlement
There’s no doubt that the Claim settlement is the last process in insurance. There are different methods by which a claim can be settled and it depends on the terms of the insurance. The payment could be done in cheque or cash to the policyholder or beneficiary of the claim.
Also, there could be a replacement of any damaged, lost, or stolen property. Another method is Reinstatement where the insurance company covers the cost of reinstating a damaged insured property even when it exceeds the agreed amount.
The last method which is common in auto insurance involves the insurance company paying the money for repairs directly to the repairer.
How do Insurance Companies Pay Out Claims?
If your insurance claim is approved, you will receive compensation from your insurance company. But how are these payments made? Some insurance companies won’t pay you the compensation at once. Although the case may be different for a Life insurance claim.
In most cases, the insurance company will pay the exact amount of the damaged item. When you have shown proof of replacing the items, the rest payments will be made. The payments may also be made to you or directly to the vendors.
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