UPDATED: Mar 13, 2020
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In the insurance world, a claim is a request from an insured party to the insurer to pay for a covered event.
All insurance companies have a specific claims process. The policyholder is required to go through this process to make a claim. Many large car insurance companies, for example, now let you initiate a claim through their mobile app.
When you buy car insurance, you’re signing a contract. This contract guarantees that your car insurance company will pay you in certain events. If you wreck your vehicle, for example, or collide with a pedestrian, then your car insurance company agrees to cover these events. You make a claim to your insurance company, and then your insurance company covers the claim.
How to Make a Claim
Different insurance companies have different claims processes. Most companies have a 24/7 claims reporting line, for example, that you can call any time to initiate a claim.
More recently, many insurance companies have launched claims reporting apps. Use your mobile device to start a claim.
After you initiate the claims process by contacting your insurer, the insurance company will open a claim file and give your claim a number – even if the claim is ultimately denied or you choose not to pursue it. The insurance company will investigate the claim to make sure it was a covered incident. They may send a claims adjuster to inspect the vehicle, for example. Then, the insurer will pay compensation based on the damages.
Sometimes, claims can be refused. Maybe the insurance company suspects that you’re committing insurance fraud. Maybe the incident was not a covered event. Maybe you forgot to pay your premiums the week before the incident and your insurance lapsed.
What is the Maximum Amount I Can Claim?
After making an insurance claim, the insurance company will either approve or deny your claim. The insurance company will pay you compensation for any covered damages.
If it costs $10,000 to repair your vehicle, for example, then the insurance company will send you a check for $10,000 (minus your deductible). If you injured another driver who required $50,000 of medical bills, then the insurance company will pay the other driver $50,000 for her medical bills.
Every insurance policy has a specific limit. If your car insurance just meets your basic liability needs, for example, then your limit may be just $20,000 or $30,000 – the bare minimum legally required for your state.
Some drivers extend their limits beyond the lowest legal minimum. You might buy insurance that extends limits to $500,000 or $2 million, for example. In this case, the insurance company will cover all damages on your claim up to this limit.
Many insurance policies also have a per person or per incident limit.