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What is an Insurance Claim?

April 30, 2024

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At some point in your adult life, you might need to file an insurance claim to get the required coverage for your needs. Insurance claims play an important role in offering a financial security net to policyholders who have relied on their insurer to honor their insurance contract. When you’ve experienced a loss or damage, an insurance claim can help you recover from certain financial setbacks. Understanding how insurance claims work can help you better navigate through the process of filing an insurance claim.

At the same time, policyholders need to have a fair idea of their rights if their insurance claim is delayed or denied. Insurance is a for-profit business, and many insurers undertake unethical practices to prevent payouts to legitimate policyholders in order to increase their profit margin. If you find yourself in a situation where you feel your insurer is taking advantage of you, a denied insurance claim attorney at Wallace Law can help you fight bad faith insurance.

Understanding Insurance Claims

Insurance claims are formal requests from a policyholder to the insurance carrier to compensate them for covered damages. For example, if a part of your house catches fire and causes significant damage, then you would want to contact the carrier of your homeowners policy, alerting them of the accident, and requesting them to initiate the claims process so you are covered for the expenses incurred in repairing the damages made to your home. The types of damages covered and the amount you are paid will be based on the terms of your policy and the type of damage experienced.

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Types of Insurance Claims

Because there are different types of losses, there are also different types of insurance policies. You may have one or some of these types of policies, depending on the types of property you own and where you are in life.

  • Life insurance: Life insurance policies are meant to protect your loved ones in the event of your passing. These policies pay the beneficiaries certain amounts to assist with loss of financial support and additional expenses, including the funeral and burial costs of the deceased.
  • Health insurance: You likely have health insurance through your employer, or you might be paying for it privately if you are self-employed or in between jobs. Health insurance helps offset the costs of medical expenses when you are sick, injured, or otherwise need medical intervention. It may also have provisions that offer coverage for routine wellness exams and check-ups.
  • Travel insurance: Booking a vacation is both exciting and a little scary. What happens if you or someone you are traveling with gets sick, or if your flights are canceled and you miss your tour? Travel insurance protects you against financial losses you might incur if something unexpected happens on your trip.
  • Property insurance: Insurance that protects your home against certain perils falls under two main categories: renters insurance and homeowners insurance. Renters insurance covers losses of your belongings in a dwelling that you are currently renting. Homeowners insurance covers damages and losses to your home due to events such as natural disasters.
  • Commercial property insurance: Like homeowners insurance, commercial property insurance covers damage to commercial properties. For instance, if you own an office building, you would likely have a commercial property insurance policy to cover the building and certain structures you own inside the building.

These are some of the most common types of insurance policies, although many people may additionally or separately have policies that cover other items or life events.

How Do Insurance Claims Work?

The insurance claims process is generally similar across carriers, though there may be some nuances. Since insurance is a state matter, your state laws will regulate the claims process to protect the insurance needs of its consumers.

Here is a summary of how insurance claims typically work:

  • You purchase an insurance policy: After purchasing the policy, you must ensure you pay your premiums on time and keep an eye out for any documents highlighting any changes to your policy.
  • You experience a loss: You will likely notify the carrier, i.e. your insurance company, about the loss as soon as possible.
  • Review your insurance policy: This step is to make sure you are familiar with what is covered, how and when it should be reported, and what documentation is needed by the carrier.
  • Examine and record the extent of your loss: You will need to provide documentation such as photographs, death certificates, and/or police reports to your carrier within a certain time.
  • Mitigate further losses and save all receipts: For example, for property damage, you will want to take steps to protect your property from further damage. Covering broken windows with tarps or cleaning up water damage to prevent mold can be part of this process.
  • Cooperate with your insurance carrier: If an adjuster needs to schedule a time to speak with you, you should make yourself available to them.
  • Settle the claim: At this stage, you should work with your insurance carrier to settle your claims and receive compensation for your damages. In some cases, you may be able to receive what you are owed (in a timely fashion) directly from your carrier without the need for additional help.

If you find yourself in a situation that warrants additional help, or if you need to learn how to properly appeal a denied insurance claim, it is a good idea to hire an insurance dispute attorney practicing in your state.

Should I File an Insurance Claim?

If you’ve experienced a covered loss, you will want to file an insurance claim to receive the necessary proceeds you were promised under your insurance contract. When filing a claim, there are a few important items to consider:

  • File the claim as soon as possible: Do not delay. Some policies require you to file a claim within a very short time. Filing a claim as soon as possible can help you save time, money, and headaches in the future.
  • Only file a claim for legitimate loss/damage: Remember that insurance fraud is punishable by law. This is why it is recommended to review your policy thoroughly before you file a claim.

There may be a few instances where you would not want to file an insurance claim. These may include situations where you’ve experienced extremely minor damages or where you have largely contributed to the damage.

Best Practices to Keep in Mind While Filing a Claim

After you purchase an insurance policy, you should make sure you pay your full premium amount on time, or talk to your insurance agent in the event you expect to be delayed in making your payment. If you have property insurance, you should also stay vigilant and prepared for natural disasters by regularly following up on the news, keeping your property well-maintained, and understanding that the risk factors of certain disasters may change from season to season.

The insurance process can feel complicated, but there are some things you can do to ensure the claims process goes as smoothly and as efficiently as possible:

  • Examine your policy contract, additional documents, and your insurance provider’s publicly available documents and policies. Keep records of all additional documents, such as contract addendums and copies of email correspondence.
  • Make sure you understand how to file a claim based on your insurance company’s guidelines. Some carriers prefer the claim to be requested online, while others want you to contact them via telephone.
  • It is very important to file your insurance claim on time. You should try to file your claim as soon as possible after you experience a covered loss or damage.
  • Keep a log of all your communications with your insurance carrier and their adjusters, auditors, or other agents. Keep copies of all your receipts, correspondence, as well as photographs of the loss or damage, if possible.
  • Provide all relevant documentation to your insurance carrier on time.
  • Cooperate with your insurance provider by meeting with adjusters or service personnel, and promptly answering their questions.

Unethical Insurance Practices

Despite your best efforts, sometimes insurance companies deny payment for no fault of your own. Here are some bad faith insurance practices to keep in mind:

  • Making changes to your policy without informing you of the changes
  • Delaying your claim
  • Refusing to fully investigate your claim
  • Requesting excessive documentation, or documentation that is unnecessary for paying your claim
  • Threatening or accusing you of missed premiums despite contrary evidence, making fraudulent statements, or otherwise misrepresenting the law or fair practices

If you feel you have been the victim of a wrongfully denied insurance claim, you may file an internal appeal and if unsatisfied with the results, then an external review with your state insurance agency. However, note that a bad faith insurer may have a number of dirty tricks up its sleeve and can drag on the dispute to tire you out.

If you want someone who understands the game and will endlessly fight for your rights, contact an insurance dispute attorney at Wallace Law for help.

What Happens When an Insurance Claim is Denied?

While there may be valid reasons for an insurance claim to be denied, there are also times when a carrier fails to act in good faith when you submit a policy claim. The most common reasons for insurance claim denials are:

  • If you incorrectly report a claim or make a mistake on the claim form, your claim may be denied due to application errors.
  • If you failed to pay your premium on time, your coverage may lapse, resulting in a denied claim.
  • Your claim might be for damage that occurred prior to the policy start date. You cannot file claims for pre-existing damage.
  • Insurance fraud.
  • The claim was filed outside of the policy coverage or after the statute of limitations expired.

What is the Statute of Limitations on an Insurance Claim?

A statute of limitations means you have a certain amount of time under the state law to file a claim. This period may vary, based on the type of insurance claim filed.

Ensuring your claims are filed promptly following your loss can help ensure you do not miss a deadline.

Denied Insurance Claim Attorneys Near Me

If you are in need of a denied insurance claim lawyer, contact Wallace Law for help. Our insurance dispute law firm handles insurance claim disputes for the state of Wisconsin. We are based in Sheboygan on the southwest corner of Taylor Drive and Superior Avenue, diagonal from St. Nicholas Hospital. Our phone number is 920-310-2719.

How Does Wallace Law Help Policyholders?

When you’ve experienced a loss, you need a law firm that will go to bat for you to help you recover from your loss. We make sure you are treated fairly, your claim is handled timely, and you are paid the compensation you deserve. Our team of experts has handled numerous insurance claim disputes and is aware of all the tricks of the trade. When you hire Wallace Law, you do not have to worry about your insurance claim. We’ll keep your legal needs our highest priority and fight on your behalf until you get paid.

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Insurance Claim Denied? Contact Wallace Law for Help

If you are considering filing a lawsuit for an insurance claim denial, contact Wallace Law today. We’ll put our decades of expertise to work for you, so you can focus on getting your life together after a financial setback.


Insurance Claim FAQs

When should I file an insurance claim?

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What is one benefit of submitting a claim to an insurance company?

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What is an insurance claim adjuster?

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Can you file a claim right after getting insurance?

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What is a supplement on an insurance claim?

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What is a third-party claim?

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What is a frequent reason for an insurance claim to be rejected?

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What is a bad faith claim against an insurance company?

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What is the lifecycle of an insurance claim?

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