An insurance claim is a formal request that you, as a policyholder, make to your insurance company for financial compensation after a loss, damage, or injury that your policy covers. When a covered event occurs, such as a car accident, property damage, or a medical emergency, you notify your insurer so they can evaluate the situation and, if approved, pay for the expenses or repairs outlined in your policy.
What is the purpose of an insurance claim?
The goal of an insurance claim is to help you recover financially from a covered incident outlined in your insurance policy. Once you file a claim, your insurer reviews the details and provides the appropriate payment for costs such as medical bills, vehicle repairs, or replacement of damaged property.
Types of insurance claims
The claim you file depends on your policy and the nature of the loss. Common examples include:
- Motor insurance claims - Compensation for vehicle damage or accidents, including repairs, total loss, third-party liability for injury or property damage, or medical expenses from a road accident.
- Health insurance claims - Reimbursement for hospital stays, surgeries, prescription drugs, and treatments for critical illness or accident-related injuries.
- Property insurance claims - Coverage for damage to homes or commercial properties caused by fire, theft, vandalism, natural disasters, or other insured events.
- Life insurance claims - Paid to beneficiaries after the policyholder’s death, providing the death benefit stated in the policy.
- Liability insurance claims - Protection when you are legally responsible for injury or damage to another person or their property, such as slips and falls, product liability, professional negligence, or defamation.
- Travel insurance claims - Reimbursement for unexpected incidents while traveling, including trip cancellations, medical emergencies, lost luggage, or personal accidents.
How does an insurance claim work?
An insurance claim follows a structured review process to determine whether the loss is covered and how much compensation you will receive. While each insurer may have small differences, the main steps are similar:
- Notification - You inform your insurer of the incident and provide key details.
- Assessment - A claims specialist or adjuster reviews your documents, investigates the cause of loss, and may inspect damaged property or request additional evidence.
- Decision - The insurer approves, partially approves, or denies the claim based on the policy terms and investigation results.
- Settlement - If approved, payment is issued or repairs/reimbursements are arranged.
- Closure - The claim is finalised once payment is made or the agreed service is completed.
For a detailed, step-by-step guide on how to file a Roojai claim, including required documents and timelines, see our insurance claim process page.
When to file an insurance claim
It’s important to file your insurance claim as soon as possible after an incident. Acting quickly helps your insurer investigate while details are still fresh and ensures you don’t miss any deadlines set in your policy. Every policy has its own time limits for filing a claim, so make sure you're aware of them.
You can read more about how long you have to file a claim after an accident here.
Common reasons why insurance claims are rejected
Insurance claims can be denied for a variety of reasons. While each claim is unique, there are several common factors that often lead to rejection:
- Lack of coverage - Insurance claims may be rejected if you attempt to file a claim for an event not covered by your insurance policy. You must thoroughly review and understand the terms, conditions, and exclusions of your insurance policy to ensure you meet the requirements for making a claim.
- Policy exclusions - Insurance policies often list specific exclusions, which outline situations, illnesses or events that are not covered. If your claim falls under one of these exclusions, it will likely be rejected. For example, if you were involved in a car accident under the influence of alcohol, most likely, your auto insurance will not cover this type of claim.
- Failure to disclose information - Policyholders must provide accurate and complete information about themselves and the insured items when applying for insurance. If it is discovered that you failed to disclose relevant information or provided false information, the insurance provider may deny your claim.
- Failure to pay insurance premium - If you have not paid your insurance premiums on time or let your policy lapse, the insurer may deny your claim. It is important to keep your policy active by fulfilling the premium payment requirements.
- Delayed reporting - Insurance policies usually require prompt reporting of accidents, and if you fail to report an incident within the specified timeline, the insurance provider may deny your claim.
- Insufficient evidence - Insurance claims may be rejected if there is insufficient evidence to support. You must provide all necessary documentation, such as police reports, medical records, or proof of ownership, to substantiate your claim.
- Fraudulent activities - Insurance companies thoroughly investigate insurance claims to identify fraud. Your claim will likely be denied if there is evidence of fraudulent activities or intentional misrepresentation.
Frequently asked questions
Why does insurance go up after a claim?
Filling a claim might increase your insurance premium because, statistically, you have higher risks of future claims, unless you are not at fault. Additionally, claims result in higher costs for insurance companies, so we recommend maintaining a good claims history.
How to avoid claim rejections?
To avoid insurance claim rejections, learn your insurance policy thoroughly, provide accurate information, promptly report incidents, maintain proper documentation, and follow the insurance policy’s terms and conditions. If your claim is denied and you believe it is valid, you can appeal the decision or seek guidance from your insurance provider or legal professionals.
Should I make a car insurance claim when I am not at fault?
If you were involved in a car accident when you were not at fault, filling the insurance claim is still recommended to get financial compensation under the coverage of the insured’s vehicle. Make sure to support your claim by gathering as much evidence as possible, including photographs, witness statements, and any other relevant documentation. Once you have reported the accident to your insurer, they will investigate liability. If the investigation confirms that you were not at fault, your insurance provider will pursue a claim against the third party who is at fault or the plaintiff.
Can an insurance claim be withdrawn?
Yes, an insurance claim can be withdrawn under certain circumstances. However, it strongly depends on the conditions of your insurance policy. One of the possible reasons you might want to withdraw an insurance claim is when your insurance premium increase will be higher than the payout from the occurred event. Another reason to withdraw an insurance claim if you made a mistake in claim submission or provided incorrect information.
Are insurance claim payments taxable?
The taxability of insurance claim payments depends on the claim itself. However, generally, insurance claim payments are not taxable as they represent compensation for financial losses. For example, if you receive a claim payout from your auto insurance provider for damages that occurred, that amount is generally not subject to income tax. Similarly, life insurance proceeds paid to beneficiaries upon the insured person's death are tax-free.
Tips:
Remember that the steps and timelines for your insurance claim may differ based on the type of insurance policy you have and the complexity of your case. It's important to remember the following when it comes to insurance claims:
- To maintain open and honest communication with your insurance provider.
- Follow all the steps throughout the claim process, and don't hesitate to seek professional advice if needed.
- Do not attempt insurance fraud. Honesty is the best policy for making a successful insurance claim
Definitions
| Death benefit | An amount of money paid to you in case of an insured person's death. |
| Policy lapse | The termination of an insurance policy in the case of late insurance premium payment. |
| Nature of claim | Characteristics of the event that led to an insurance claim, describing damages, losses, or liability. |