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What is an insurance claim? Understanding the basics (2023)

Updated: Feb 5, 2023

Original Article Date: 02/01/2023

Staff Writer • Buffalo, NY

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An insurance claim is a request for payment made by an individual or a business to an insurance company for covered losses or damages. It is the process of asking your insurance company to pay for expenses you incurred due to an event covered by your insurance policy. Whether you're a homeowner, a business owner, or a driver, understanding how insurance claims work is crucial in ensuring that you receive the coverage you need in the event of a loss.

file an insurance claim

When you purchase insurance, you enter into a contract with the insurance company, which requires them to pay for covered losses and damages that you experience. An insurance claim is the first step in fulfilling this contract. The claim process can vary depending on the type of insurance you have, but it typically starts with the submission of a claim to an agent and supporting documentation to your insurance company.

The first step in the claim process

Report the loss or damage to your insurance company as soon as possible. This is important because some insurance policies have time limits for reporting losses, and if you miss the deadline, you may not be eligible for payment. It's also important to gather as much information about the event as you can, including photos, police reports, and any other relevant documentation.

Once your insurance company receives your claim

They will review it to determine whether your policy covers the loss or damage. They will also evaluate the extent of the loss and the amount of the claim. If your claim is approved, your insurance company will send an adjuster to assess the damage and determine the cost of the repair or replacement. If it is denied

The final step in the claim process is the settlement

This is where your insurance company pays you for your covered losses. The settlement amount is typically based on the cost of repairs or replacement, minus your deductible, which is the amount you agreed to pay out of pocket for covered losses. The settlement can be made in a lump sum or in several payments, depending on the extent of the damage and the type of policy you have.

In conclusion, an insurance claim is a crucial part of the insurance process, and understanding how it works is essential in ensuring that you receive the coverage you need. Whether you're a homeowner, a business owner, or a driver, Encompass Agency is here to help you navigate the claims process and get the support you need in the event of a loss. With years of experience and a commitment to serving our customers, Encompass Agency is your trusted insurance partner. Contact us today to learn more about our insurance options and get the coverage you need.

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