What is Claim in Insurance?
Claim is the demand for performance of the promise made by the insurer at the time of making the contract. The insurer pays claim only when the insured event happens.
Before settlement of claim, the insurer checks the following things:
- Whether insured event has happened or not?
- Obligations present under the policy contract such as sum assured, Bonus, waiver of future premium etc.
- Check the accuracy of facts as present in the proposal.
- Is the policy holder performed his part of contract by checking premium paid till date , balance of loan if any , title of thee claimant , age of the life insured.
- To whom the claim has to be paid? Nominee; assignee, notice from income tax authority, prohibitory order from a court of law and notice of the official assignee are relevant.
When a claim is filed by the policyholder then insurance company send out an investigator to evaluate the damage as defined by the policyholder and determine whether repair is reasonable or not. This is done to stop the fraud. Insurance companies accept the investigator’s evaluation as the final statement.