by An insurance claim is a formal request by a policyholder to an insurance company for coverage or compensation for a covered loss or policy event. The insurance company validates the claim and, once approved, issues payment to the insured or an approved interested party on behalf of the insured.
Insurance claims 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 an Insurance Claim Works?
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.
For property and causality insurance policies, regardless of the scope of an accident or who was at fault, the number of insurance claims you file has a direct impact on your rates. The greater the number of claims filed, the greater the likelihood of a rate hike. File too many claims and the insurance company may not renew your policy.
If the claim is being filed based on the damage you caused, your rates will almost surely rise. On the other hand, if you aren’t at fault, your rates may or may not increase. Getting hit from behind when your car is parked or having siding blow off your house during a storm are clearly not your fault and may not result in rate hikes, but this isn’t always the case. Mitigating circumstances, such as the number of previous claims you have filed, the number of speeding tickets you have received, the frequency of natural disasters in your area (earthquakes, hurricanes, floods) and even a low credit rating can all cause your rates to go up, even if the latest claim was made for damage you didn’t cause.
When it comes to rate hikes, not all claims are created equal. Dog bites, slip-and-fall personal injury claims, water damage, and mold are red flag items to insurers. These items tend to have a negative impact on your rates and on your insurer’s willingness to continue providing coverage. Surprisingly, the much-dreaded speeding ticket may not cause a rate hike at all. Many companies forgive the first ticket. The same goes for a minor automobile accident or a small claim against your homeowner’s insurance policy.
Life Insurance Claim Process
The main purpose of taking an insurance policy is that it should come in use in the times of crises. In this article, we will look at the different types of life insurance claims and how the settlement process works.
Selection of the right policy from a good life insurance company with a healthy claim settlement ratio is the main requirement for buying a life insurance. The main function of an insurance company is to ensure easy and timely settlement of a valid claim in return for the premium paid by the insurer/ policy holder.
Before intimating the insurance company, the nominee/claimant should check some basic facts:
- If the insurance policy is active and all the premiums have been paid?
- Does the particular situation for which the claim is being made is covered in the policy?
- Exclusions of the policy
-
Death claim settlement process
Step One: Intimation to the insurance company about the Claim
The nominee should inform the insurance company as soon as possible to enable the insurance company to start with the claim process. The details required for intimation are policy number, name of the insured, date of death, cause of death, place of death, name of the nominee etc. The claim intimation form can be obtained from the nearest insurance company branch or even by downloading it from the insurance company website. Alternatively, many insurance companies also have online forms these days on their website for claim intimation.
Step Two: Documents required
The nominee will be asked to furnish the following documents:
- Death certificate
- Age of the life insured (if not already given)
- Original Policy document
- Any other document as per requirement of the particular insurer or case related
For early death claims i.e the claim that has arisen within three years of the policy being in force the company will do extra investigation to ensure it is a genuine claim. They might do the following:
- Check with the hospital if the deceased was admitted to hospital.
- In case of an air crash confirmation from the airline authorities check if the policy holder was a passenger on the plane.
- In case of death from medical causes, the insurance company will ask the hospital to provide doctor’s certificate, treatment records etc If the policy holder dies due to murder, suicide, accident then police FIR report, panchanama, post mortem report etc shall be required.
Step Three: Submission of required Documents for Claim Processing
For quicker claim processing, it is essential that the nominee submits complete documentation as early as possible and any other documents that the company needs to pass the claim.
Step Four: Settlement of Claim
As per the regulation 8 of the IRDAI (Policy holder’s Interest) Regulations, 2002, the insurer is obligated to settle a claim within 30 days of receipt of all necessary documents including extra documents sought by the insurer. If the claim requires further investigation, the insurer needs to complete its procedures within 6 months from receiving the written intimation of claim.
-
Maturity & Survival Claims
The payment made by the insurance company on completion of term of policy or maturity date is called maturity payment. The amount payable consists of sum assured plus any bonus/incentives.
The insurance company informs the policy holder in advance by sending bank discharge form for filling details in it. The form needs to be returned back to the insurance company with original policy document, ID proof, Cancelled Cheque and copy of pass book.
-
Rider Claims
Different riders can be attached to the base life insurance policy for enhanced protection. The riders can be accidental rider, critical illness rider, waiver of premium rider etc. For different riders, different claim proceedings are required. Some riders may be valid with the death claim like accidental death rider or some riders need to processed standalone like waiver of premium rider in case of disability.
For Critical Illness Rider- necessary medical documents such as first diagnosis report, Doctor’s report, etc are required. For Accidental disability rider – copy of FIR, Certificate of disability by the treating doctor, doctor’s report etc are required.
In many cases, life insurance claims have been delayed or denied due to lack of proper documentation or simply because the proper claim process was not followed. Hence, it is recommended that the claimant should be aware of the claim process in order to have a hassle-free claim settlement process during the emotionally draining time especially while filing a death claim. Coverfox has taken a great initiative in NASPRO (Nominee Assistance Program) which is specially aimed at assisting nominees to have a smooth claim settlement experience.
