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Laura Berry

Former Insurance Agent

Former Insurance Agent

Joshua Adamson

Joshua is a copywriter at Obrella who for more than 10 years has been creating content about insurance, health care, and more. He helps companies explain complex insurance subjects in simple ways so that customers can make smart buying decisions. He spends way too much time binge-watching Netflix, loves the outdoors and has a cat who tolerates him.

UPDATED: Feb 20, 2024

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How Do Insurance Claims Work?

You haven't given insurance claims much thought in the past, but now that you need to file one, you're wondering how insurance claims work. You're not alone. Even though many of us pay our insurance premium month after month, few of us think about the process of filing a claim until we need to. The good news is, it's easier than you may think and we'll walk you through the process.

Filing an Insurance Claim

Whether you’re filing an auto insurance claim or a home insurance claim, there are three basic steps to filing a claim. (For more information, read our “Understanding Insurance Claims And When To File“).

  1. Report the incident to your insurance provider. This is when you officially “make a claim.”
  2. Your insurance company appoints a claims adjuster to evaluate the claim and tell you how much the insurance company will pay toward it.
  3. Your insurance company will either send you a check in the mail or deposit the money into your bank account.

Keep in mind that if you have not met your deductible (the amount you have to pay before your insurance starts paying), it will be taken out of the claim money you receive from your insurance company. For instance, if your insurance company is paying $1,500 toward your claim and your deductible is $500, you’ll receive $1,000.

Every insurance claim is unique, and there are many factors that affect how long it takes to resolve your claim and get paid from your insurance company. For example, if you file a claim through your auto insurance policy that involves an injury, it will require a more thorough investigation than a simple fender bender.

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How Auto Insurance Claims Work

If you’re involved in an accident, notify your insurance company as soon as possible. If the amount to repair the damages to your vehicle is less than your deductible, you might decide to not file a claim. But if the damages exceed your deductible, you’ll likely want to file a claim.

As soon as you file a claim, you have started the “submission process.” A representative from your insurance company will ask you questions about the accident, which may include the name and driver’s license number of the other driver or drivers, the name of any witnesses and the police report number. Next, a claim number and a claims adjuster will be assigned to your claim. He or she will determine how much, if any, your insurance company will pay toward your claim.

How Home Insurance Claims Work

After you file a claim with your home insurance provider, an adjuster will usually visit your home and inspect the damage. He or she will decide how much the insurance company will pay toward your claim. Often, you’ll get an advance against the total amount your provider is paying. This allows you to start the repairs to your home, but it does not represent the total payment. Or, you could be offered a settlement on the spot. If you discover more damage in the future, you may be able to reopen the claim and try to get additional funds from your insurance company. If both the structure of your home and personal belongings inside your home are damaged, you’ll usually receive two separate checks one for the house and one for your belongings.

Your insurance claims adjuster may ask detailed questions about your home insurance claim, such as the model number of an item or how much you paid for something that was damaged. Keeping an up-to-date home inventory can help you answer these questions, speed up the claims process, and ensure you get the payment you deserve.

Before making any final decisions on your insurance company, it is important to learn as much as you can about your local insurance providers, and the coverages they offer. Call your local insurance agent to clear up any questions that you might have. Questions to consider asking include, “What is the best coverage plan for me/my family/my situation?” “What are the minimum insurance coverage requirements in my state and what form of coverage do you recommend?” “Do you guys offer any bundle discounts if I take out both my auto insurance and home insurance with you?” and “What is the average rate of insurance quotes you guys offer?”

Before making any big insurance decisions, use our free tool to compare insurance quotes near you. It’s simple, just plug in your zip code and we’ll do the rest!

Licensed agents can help you compare a variety of insurance policies to ensure you have a policy that gives you the coverage you need at a price you can afford.

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