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What is an Insurance Claim?

Insurance Claims

Car accidents, fires, earthquakes, floods, vandalism, and theft can happen to anyone at any point, and these disasters can leave you with lost or damaged property and a mountain of costs. That’s where insurance comes in. When you get insurance, you make a contract with the insurer that you will pay a premium amount of money in exchange for the guarantee that the insurer will cover the costs specified in the policy. So when an accident that’s covered by your policy occurs, the insurance company will cover the expenses, up to the amount in the policy. But how does an insurer know when there’s been an accident and when to cover costs? They can only know if you tell them, and that’s where insurance claims come in. What is an insurance claim and how do they work? And most importantly, how do you file an insurance claim?

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What is a Claim?

The most basic insurance claims definition is that the claim is a formal request for the insurer to cover something. An insurance claim will need to prove that it is a legitimate claim for damage covered by the policy and that the accident did occur the way you say it did. This proof can include police reports, photos, and any other documentation of an accident or disaster. Your insurance claim will also include a request for the insurer to do something to cover the costs, as agreed upon with the policy.

Once you submit the insurance claim, the insurance company will review it to determine if the claim is covered by the policy. This can take some time, but if the accident is covered, the claim will almost always be approved. Once the claim is approved, the insurer will work to determine how the accident will be covered. If a claim is denied, the insurer is required to provide an explanation of why the insurance claim was denied.

Will a Claim Cause Rates to Increase?

One of the questions most people have about insurance claims is whether or not filing a claim will cause premium rates to increase. The answer to that depends on the situation. Rates might not increase, but they could, even if you’re not at fault. Usually, if you’re at fault for an accident or other types of damage, then filing an insurance claim will cause your insurance premiums to increase, even if it is your first claim. If you’re not at fault, it can depend.

When it comes to property or causality insurance, the more insurance claims you file, the higher the likelihood of a rate increase, regardless of who’s at fault. There are other situations when you aren’t at fault, but your rates could still increase. The number of claims you’ve filed, your driving record, and even the number of natural disasters in your area can all cause your rates to increase when you aren’t at fault.

If filing insurance claims can cause your rates to increase, why file a claim at all? Doesn’t it just cost you more money later? It can sometimes, but the costs of accidents, medical issues, natural disasters can be extensive and impossible to cover on your own in some situations. In these circumstances, filing an insurance claim is the best thing to do. After all, you are paying insurance premiums to be able to have the insurer cover auto accidents and disasters, so you should use the coverage when you need it. If a cost isn’t very much, you can consider paying for it yourself to avoid an increase in premiums, but you must notify your insurance company of the accident even if you don’t file a claim.

Important Tips for Insurance Claims

If you decide to file an insurance claim, there are some important tips to keep in mind to help get the best options:

  • File your claim quickly.As soon as you have the information, file the claim immediately. That way the insurer can start reviewing your claim as soon as possible. Some policies also have a time limit on the time period in which a claim can be submitted, so if your policy has that, make sure it’s in during that time. Also, insurers might not cover any additional costs that occur during a delay, so the sooner the claim is in, the better.
  • Be on top of your regular premium payments.If you’re not paying your premiums, your coverage might be canceled, and that could be disastrous if you needed that coverage. So make sure you are on top of your payments to increase the likelihood of your insurance claim being approved. If you’re unable to make payments after an accident due to financial hardship, file for financial hardship aid to help make the payments.

By filing your claim quickly and staying on top of your payments, you will be able to make stronger insurance claims that are more likely to be approved.

How to File an Insurance Claim

Knowing the benefits of insurance claims will help you, but to get the benefits, you have to know how to file an insurance claim. Here are the typical steps for filing insurance reports:

  1. Call your insurance provider.Whether the accident was your fault or not, you’ll need to notify your provider of the accident. They will let you know the next steps you’ll need to take to get the insurance claim process started.
  2. Provide required documentation.Your insurance agent will provide you with a list of forms you will have to fill out and documents you will have to provide to prove the loss or damage to your vehicle. These typically include a police report, images from the accident, a written explanation of what happened, and medical documentation. Make sure to keep copies of all documents for your records.
  3. Complete inspections.If damages are minor, you’ll probably complete this step on your own. Insurance agents will ask you to take your car to a body shop or mechanic to get quotes to fix the damages. If things are more complicated, an insurance adjuster will come take a look at the car. Adjusters investigate the claim to determine if the car is a total loss and how much the insurance company should provide.
  4. Pay the deductible.Insurance companies don’t provide coverage for free. You’ll have to pay a deductible in full before any money is paid out on your claim.

Once you’ve completed your end of the insurance claim process, it could take some time to be paid out on your claim. There are many factors that go into approving the claim, so there is no definite timeline. Your best option to get things done quickly and efficiently is to file ASAP and keep in constant contact with your agent.