Insurance helps protect your clients' assets and loved ones when the unexpected happens. Whether it's property damage, a car accident, or personal injury, policyholders should start the insurance claims process as soon as possible. This is so they can access their coverage and receive proceeds for damaged personal property and any medical bills arising from the covered event.
This guide explains the basics of filing a claim and how the process typically works. Brokers and agents can share this guide with clients who want a simple walkthrough of the claims process and what to expect from their insurer.
An insurance claim is a formal request filed by the policyholder to their insurer for compensation for covered losses or damages. The covered losses can include:
Policyholders can only make claims for losses or events specified in their policy documents, so it's important for them to carefully read through what's written to understand what they are covered for.
An experienced insurance professional can also explain key terms and exclusions to clients.
Insurance claims come in many forms, but most fall into a few familiar groups that match the main types of coverage people buy. This can be helpful for clients when something goes wrong and which policy they may need to tap into after a loss.
1. Auto insurance claims These arise after a car accident or other covered loss to a vehicle. They can involve collision damage, property damage to someone else's car or fence, and bodily injury to third parties. Depending on the policy, auto claims can cover damage from events like collisions with animals and certain no-fault incidents. Learn more about how car insurance works in this guide.
2. Homeowners' and property insurance claims These claims relate to damage or loss involving a home or personal property, including fire, storms, theft, and similar events. Homeowners may also claim additional living expenses if their home becomes uninhabitable, and they need to stay somewhere else temporarily.
3. Health insurance claims Policyholders submit these after covered medical events, such as a hospital stay or surgery, so the insurer can pay the allowed portion of the bill. In many cases, providers bill the insurer directly. In others, members file the claim themselves for reimbursement.
4. Life insurance claims When the insured dies, beneficiaries file life insurance claims so the insurer can pay the death benefit. This payment goes to the person named on the policy or another designated beneficiary to help cover expenses tied to the loss. Find out how life insurance works in this guide.
These types of insurance claims are less common but can be just as important for policyholders. They often involve questions about who pays for which losses and which policy responds in complex situations. Understanding these claim categories can help determine who pays for what, such as punitive damages or compensation for emotional distress.
These claims arise when someone alleges that the insured caused bodily injury or personal injury or damaged another person's property. For example, a grocery store may face a slip-and-fall claim, which is handled under its liability insurance coverage.
When a covered illness or injury prevents someone from working, they may file a claim under a disability or income protection policy. These claims are less visible to consumers than auto or home claims but are a significant category in the market.
The Insurance Information Institute (Triple-I) shared these six practical steps for filing a car insurance claim:
Policyholders must keep their broker or agent's direct contact details handy. A general office number is useful, but having their direct line and extension can speed up the insurance claims process when something goes wrong.
The claims-filing process for homeowners' insurance is similar to that of auto insurance. However, there are slight variations because of the differences between the type of damages a house and a vehicle can sustain. For policyholders who have their properties ravaged by a covered event, Triple-I recommends following these steps:
Wondering what the most and least expensive US states for home insurance are? Check out this guide.
Most health insurance policyholders usually don't need to file a claim themselves as this is often done by medical services providers on their behalf. For health insurance plans that require policyholders to submit their own claims, they may have to pay the healthcare provider upfront and send the receipts, as well as other relevant documentation, to their insurers. Claims forms can typically be accessed on the health insurance provider's website or, if the policy is employer-sponsored, from the company's human resources department.
Before accessing medical care, health insurance policyholders are advised to make sure that they understand what their plans cover, who is responsible for filing claims, and what documentation is required. Doing so can prevent them from incurring unexpected medical expenses and help facilitate reimbursement.
Need help with this? Read our guide on finding the best affordable health insurance plans.
Filing a life insurance claim varies slightly from other types of insurance because the responsibility typically lies with the beneficiary rather than the policyholder. Combined with the emotional distress of losing a loved one, the insurance claims process can be especially stressful. To make the process easier, experts advise beneficiaries to follow these steps:
Interesting fact: you can also use life insurance to build wealth over time.
As with submitting a claim, the payment process also depends on the type of insurance policy.
For car insurance claims, who receives the check often depends on the type of claim and who caused the accident. If the policyholder is at fault in a car crash and files a liability claim, the other driver will receive the payment. For collision claims, the insurer pays the cost to repair the policyholder's vehicle.
After the adjuster has completed their assessment of the damages, the insurance company settles the amount depending on the type of coverage. Home insurance coverage comes in two main types:
If the property is under a mortgage, the home insurer will most likely send a check to both the homeowner and the lender. Most mortgage agreements follow this arrangement to protect the lender's interests.
The insurance company typically releases a portion of the payout before construction or repair commences to allow the policyholder to hire a contractor. The insurer then releases more money as the building progresses and makes the full payment once the home is rebuilt and passes inspection.
For health insurance claims, the insurers often check first if the service is covered under the plan. They also verify other important details of the policy, including copays, deductibles, and out-of-pocket maximums the policyholder may have paid throughout the policy term. If the service is covered, the payment is sent to the doctor or the medical service provider.
Depending on the policy, the insurer may reimburse a portion or the full cost of a service. In health insurance plans that require the policyholders to submit the claims themselves, the plan holders may have to pay for the service upfront and wait for a reimbursement from the insurance company.
Life insurance plans generally provide a tax-free lump-sum payment to the policyholder's beneficiaries after their death. Under federal rules, this payout is usually not treated as taxable income, although interest earned on the proceeds may be taxable. State laws can also affect how the money is handled in specific situations.
With the right policy, this type of cover can assist families in paying off loans and debts, as well as providing them with the monetary means to meet daily living expenses. Coverage is available in several variations but generally falls into two categories:
Life insurance policyholders are required to designate a person who will receive the death benefit, also referred to as the beneficiary. This can be the insured's spouse, immediate family, other relatives, friends, business partners, or even a charitable organization. This is subject to any applicable state laws on beneficiary designations. Policyholders are also allowed to name several beneficiaries and assign how much benefit each person or group will receive.
Disability and income protection policies are designed to replace part of a person's earnings when a covered illness or injury stops them from working. These benefits help insured workers keep up with rent or mortgage payments, utilities, groceries, and other recurring expenses while they recover.
Depending on how the plan is funded and structured, payments may be deemed taxable or non‑taxable income under federal rules, so policyholders should review their specific plan documents or speak with a tax professional. Coverage is available in different designs but generally falls into two broad categories:
This policy replaces a portion of the insured's income for a limited period, often up to several months or about a year, after a short elimination period. Benefits are typically paid weekly and continue while the insured meets the plan's disability definition and has not reached the maximum benefit duration.
This provides income replacement for an extended period when a serious medical condition keeps the insured out of work beyond the STD period. These policies usually pay monthly benefits and can continue for a set number of years or up to normal retirement age, as long as the claimant remains disabled under the policy terms.
Many disability and income protection plans are offered via employers, while others are purchased individually. In both cases, benefits are paid directly to the insured person, who can decide how to allocate the funds. Some plans also include return‑to‑work support or rehabilitation benefits, giving policyholders income and assistance for their recovery.
Instead of paying the insured, these policies are designed to compensate third parties for covered losses. These include medical expenses, lost income, repair bills, and, in some cases, legal defense costs if a lawsuit is filed. Payments are subject to policy limits and the terms of the coverage, as well as applicable state laws on damages and liability. In personal and commercial insurance, liability claims commonly fall into these main categories:
This helps pay for an injured person's medical treatment, rehabilitation costs, and lost wages when the policyholder is at fault for an accident. In auto insurance, this coverage may also contribute to legal fees if the injured party sues.
This pays to repair or replace another person's car, building, or other property when the insured is legally responsible for the damage. In many states, drivers are required to carry both bodily injury and property damage liability on their auto policies.
In practice, liability and personal injury claims are usually resolved through a settlement between the injured person – represented by a lawyer – and the insurer for the at‑fault party. Once both sides agree on an amount, the insurance company issues payment to the claimant or their representative, up to the policy's per‑person and per‑accident limits. If the parties cannot reach agreement, the dispute may proceed in court, and any judgment will generally be paid by the insurer within the scope of the coverage.
Most insurers aim to resolve straightforward claims in about 30 days once they have what they need, but serious losses or disputes can stretch the process into several weeks or months. State laws usually require claims to be handled promptly and often set specific deadlines for investigation, decision, and payment.
Because of the nature of the insurance claims and the circumstances of individual claims, the time it takes to receive insurance claims can vary:
In the US, many insurance claim payouts are not taxable, but there are important exceptions. The answer always depends on:
To determine whether a policyholder's insurance claims are taxable, keep these rules in mind:
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