Most insurance customers buy coverage and hope to never use it. If your home, car and health never experience any problems, your insurance will provide nothing more than peace of mind. But if you do need to make a claim, you'll enter into a process that can be long and complicated before you receive your money.
Initial Payment
Once you file a claim with your insurance company, you will likely receive an initial payment for a portion of your settlement amount. Insurance companies each have their own policies for determining how much you will receive up front, and what documentation you may need to provide before the company will issue a check. The initial check will help you cover costs you've already incurred, such as the towing charge after a car accident or emergency home repairs following a storm.
Claims Adjustment
The claims adjustment step is at the heart of how an insurance company settles a claim. This step usually involves a claims adjuster inspecting the damage or documents that are the reason for a claim. For example, in the case of auto insurance, the claims adjuster will inspect your vehicle to estimate the cost of repairs and determine whether there is any reason to doubt the customer's reason for making a claim. Health insurance claims adjusters will review your medical bills and may contact your doctor's office to learn more about your condition and treatment.
Final Settlement
An insurance claim's final settlement may take time to occur. Besides the time it takes to issue an additional payment after going through the claims adjustment process, there's the possibility that you'll discover new issues later. For example, in the case of automobile damage your repair shop may discover structural problems that weren't visible to the claims adjuster but are still covered under your policy. When customers and insurance companies can't agree on reasonable settlements, customers may pursue legal action to force a payment.
Underwriting and Follow-up
Once an insurance company settles a claim, it may continue the process by reviewing its underwriting policy or following up with the customer. Customer service surveys help the insurance company improve its methods for handling claims, and follow-up letters provide one last chance to thank customers for their business. If an inspection during the claims process revealed new information about risks, the company's underwriters may change their methods for determining insurance rates to reflect the new information.
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