What Is an Insurance Claim?

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An insurance claim is a formal request for payment to an insurance company after the policyholder experiences damages, loss or liability from a covered incident. Payments issued by the insurance company are used to replace or repair your property, pay for medical expenses or cover legal fees in a lawsuit.

Insurance claims can be a little tricky to understand if it's your first time. This guide breaks down how insurance claims work, the different types and the process for filing.

What Is an Insurance Claim?

When you file an insurance claim, you're requesting payment from your insurance provider to cover an incident, such as a car accident or fire damage to your home. Insurance claims are specific to the type of insurance policy you carry — such as auto, homeowners, health, or life.

When you file an insurance claim, you're requesting payment from your insurance provider.

Homeowners insurance example: Let's say your home caught fire. You extinguished it, but only after it spread throughout the living room. Fortunately, your homeowners insurance dwelling coverage protects against fire damage and your insurance claim is approved. After paying a deductible, your insurance covers the remaining costs of the repairs.

How an Insurance Claim Works

The purpose of filing an insurance claim is to protect the policyholder — you — against financial loss on a covered claim. Insurance claims commonly involve costs related to repairing or replacing personal property, medical treatment, loss of life and liability for injuries and damages.

The process of filing a claim will depend on your insurance carrier. Often, the claims process will involve submitting documentation (e.g., police reports, receipts, photos, videos). Your carrier may send an adjuster to personally inspect the damages, such as surveying damages to your home. 

If the claim is approved, you pay the applicable deductible and your insurance covers the remaining cost. The amount you are compensated or reimbursed for will depend on the amount of coverage you purchased. Claims where you're at fault — rear-ending the driver in front of you, for example — will almost always result in higher insurance premiums.

Types of Insurance Claims




Pays for property damage or medical bills when you're at fault in an accident. Additional coverage, like collision and comprehensive coverage, provide protection against at-fault accidents, fire, vandalism, falling objects, theft and more.


Covers the cost of rebuilding your home, replacing your stolen or damaged belongings, and liability to other people on your property. Insurance carriers offer additional coverages like flood and earthquake protection.


Covers the cost of replacing your belongings, if damaged or stolen, and personal liability for damage or injury. Adding loss-of-use coverage pays for living expenses if you're temporarily displaced from your home.


When you visit a medical provider, you will typically pay a copay and the medical staff will determine if there's a remaining balance, which insurance would cover up to a limit. Generally, policyholders become involved in the health insurance claims process when making an appeal after learning their medical expenses are covered partially or not at all.


Protects the company against damages and liability, including legal fees during a lawsuit, loss of income, bodily injury, malpractice and more.


Beneficiaries of the policyholders are paid a certain amount after the insurer receives the policyholder's death certificate.

How To File an Insurance Claim

1. File a police report 4. Undergo the investigation process
2. Document the damages 5. Accept the settlement payment
3. Contact your insurance company OPTIONAL: Dispute the claim

1. File a police report

For incidents involving criminal activity or serious injuries, you should always notify the local authorities. Filing a police report is useful because it can prove the incident occurred and possibly prove you were not at fault for the incident. In some cases, this official document can speed up the claims process to help you get your settlement quicker.

2. Document the damages

As soon as it is safe, document the incident and any damages or losses as soon as possible.  Pictures and videos will come in handy when assessing the damages or losses after filing a claim.

Note: For small accidents that don't involve other parties, such as car scratches after driving into your gate, it may be more cost-effective if you don't file a claim. Sometimes, the repair cost is lower than your deductible so it makes little sense to file..

3. Contact your insurance company

Depending on the insurance carrier, you can start the claims process through an online claim form, mobile app or by phone. Be sure to have the necessary documentation ready, including a police report, photos and videos of the incident and receipts showing the value of the damaged property.



Online Portal



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American Family


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varies by policy

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Liberty Mutual


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State Farm

varies by policy

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File online claim

You can start the claims process through an online claim form, mobile app or by phone.

4. Undergo the investigation process

Some carriers, like Lemonade, may approve an auto insurance claim within minutes. In other cases, especially with a homeowners insurance claim, the process may be more extensive. If your home suffered a fire, for example, then your insurance carrier may send an adjuster to assess the condition of your home and the value of necessary repairs.

After the investigation, the adjuster will use their findings to determine the appropriate amount you will be given to fix or replace your damaged property (e.g., repair a roof, replace a totaled vehicle). Some states hold requirements on when insurance companies must respond. In California, for example, the insurer must accept or deny the claim within 40 calendar days after receiving the claim.

5. Accept the settlement payment

If you're agreeable to the settlement amount, you can accept the payment. Typically, your settlement will be based on actual cash value (fair market value) or replacement costs (actual price to replace).

Your insurance carrier will typically issue payment via check or deposit. For larger claims, like rebuilding your home, your settlement may be issued in installments, as construction milestones are met.

OPTIONAL: Dispute the settlement offer

You can dispute the claim if the claim is denied or you disagree with the settlement amount. One option is to submit an internal appeal with the insurance company — your insurance carrier would review your case and make another decision. Another route is to submit a complaint to your state's insurance commissioner or take legal action. (Just be mindful of any legal fees that could easily outpace the cost of your damages and losses.)

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Insurance Claim FAQs

What happens when you make an insurance claim?

After filing an insurance claim, your insurance carrier may send an adjuster to assess the losses and damages. Depending on the investigation, the insurance carrier will determine if the incident is a covered event and how much payment you will receive to cover the loss.

How will making a claim impact your policy and premiums?

If you are at fault for the accident, such as rear-ending the driver in front of you, your insurance carrier will typically increase your premium by a percentage. If you demonstrate you're a risky customer and file multiple claims within the policy period, your insurance company may not renew your policy.

How do insurance claims get paid?

After a claim is approved, your insurance company may send you payment(s) via direct deposit or check to cover approved repair or replacement costs.

How soon can you file a claim after getting insurance?

Immediately. If the incident falls within the coverage period and you continue paying insurance premiums, you should be allowed to file a claim with your insurance company.

A Smarter Way to Shop for Insurance

Insurance claims are slightly different for each type of insurance. For home, renters, business or car insurance, it's important to file a claim immediately after a loss. Most importantly, it's important to shop for a carrier known for paying claims in a timely and fair fashion.

Shopping for insurance is about choosing the right policy that balances your coverage needs and your budget. Whether you need health or life insurance or coverage as a homeowner, driver, business owner or renter, SmartFinancial can help you skip the tedious process of online shopping by comparing hundreds of insurance carriers all in one place. Just enter your zip code and answer a few questions to get started on free quotes.

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