What is an Insurance Claim? Process, Types & Payout Guide

A policyholder makes an insurance claim by formally requesting compensation from the insurer for a covered loss or event. By filing a claim, you’re asking the insurer to honour the policy and cover your financial loss according to the agreed terms.

In Preeti’s case, she asked the insurer to cover her car repair costs under “own damage”, a valid and covered claim category.
 

So, an insurance claim bridges the gap between damage and financial recovery.

Types of Insurance Claims

Not all claims are the same. Depending on the type of insurance and the situation, the nature of the claim will differ. Let’s explore the most common types:

1. Health Insurance Claim

When a person is hospitalised or undergoes a medical procedure, they can raise a claim to get reimbursement or a cashless service from the insurance provider.

2. Life Insurance Claim

When the insured person passes away, their nominee can file a death claim to receive the sum assured.

3. Motor Insurance Claim

This is for vehicle-related damage or loss due to accident, theft, fire, etc.

4. Travel Insurance Claim

Used for trip cancellations, lost baggage, and emergency medical needs during travel.

5. Property Insurance Claim

Applicable when property or home is damaged due to natural disasters, fire, burglary, etc.

Different Claim Types with Examples
 

Who Can File an Insurance Claim?

Preeti asked, “Can anyone in the family raise a claim, ya sirf main?”

That depends on the type of insurance. In most cases, the policyholder, or their nominee, is allowed to file the claim.

Eligibility Based on Insurance Type:
 

Example:

Preeti is the car’s registered owner, so only she can raise the car insurance claim, not her friend who was driving it at the time.

Step-by-Step Process to File an Insurance Claim

After the accident, Preeti downloaded her insurer’s app and followed these steps, which can apply to most insurance types.

Claim Filing Steps:
 

1. Intimate the Insurer
   Inform the insurance company immediately. For car accidents, you must report within 24-48 hours. For health emergencies, it’s best to inform before admission or within 24 hours.
    
2. Submit Required Documents
   Upload scanned documents or visit a branch. Documents differ per insurance type.
    
3. Survey or Investigation
   In Preeti’s case, a surveyor from the insurance company visited the garage to inspect the damage.
    
4. Approval & Claim Settlement
   After verification, the insurer either gives cashless approval or reimburses the expenses within a few days.
    
5. Pay Deductible and Receive Balance
   The deductible is the small portion that the policyholder pays; the rest is paid by the insurer.

Car Insurance Claim
 

Required Documents for Insurance Claims

Documents are very important. Any missing document can delay or even cancel your claim.

Document Checklist (Based on Insurance Type):
 

Numerical Example: 

In Preeti’s case, she submitted 6 documents, including:

• Insurance policy copy
   
• RC
   
• Driving license
   
• Accident photos
   
• Garage estimate
   
• ID proof

Common Reasons Why Claims Get Rejected

When her neighbour heard about her accident, he said:
 “Yaar mera bhi ek baar claim reject ho gaya tha. Bohot strict hote hain ye log.”

That’s true. Insurance companies follow strict rules. Claims can be rejected due to:

Top 5 Claim Rejection Reasons:
 

Example:

If Preeti had repaired the car privately and then claimed the cost with a fake bill, the insurer would have denied the claim.

Claim Settlement Ratio: Why It Matters

Preeti’s father always said, “Claim settlement ratio dekho before buying insurance.” But what is it?

The Claim Settlement Ratio (CSR) is the percentage of claims an insurance company settles vs. the total number received.

Table of Health Insurers – Claim Settlement (FY 2023)
 

Always go for insurers with a CSR above 90% and a low average settlement time.

RTO Approval in Motor Claims

For serious accidents, especially third-party claims, the insurer might need a report from the Regional Transport Office (RTO). This can extend claim processing time.

In Preeti’s case, this wasn’t needed because it was a self-accident and didn’t involve third-party damage.

Conclusion

An insurance claim is your right as a policyholder. Whether it’s a car accident, medical emergency, travel problem, or death, your claim helps you move from crisis to recovery.

Preeti used her health insurance during an emergency and saved ₹45,000. She knew how to file the claim, so she didn’t have to pay from her own pocket. This made a big difference.

Don’t wait for trouble to learn about claims. Keep your documents ready, understand your policy, and make sure it stays active. Being prepared can save you time, stress, and money.

FAQs on Insurance Claims

What is the difference between reimbursement and a cashless claim?

In a reimbursement claim, you pay the expense first, and the insurer pays you later. In a cashless claim, the insurer directly pays the hospital or garage.

Can a claim be filed online?

Yes, almost all insurers now allow online claim filing through apps or websites.

What is a deductible in insurance claims?

A deductible is the amount you agree to pay from your pocket. The insurer pays the rest.

What happens if I miss the deadline for filing a claim?

Your claim may get rejected. Always file within the allowed time, usually 24–48 hours for motor/health claims.

Can I withdraw a claim once filed?

Yes, but only before settlement approval. Once processed, claims can't be withdrawn.

Apply for Loans Fast and Hassle-Free

Apply Now

About the Author

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?