Categories Finance

What Is the Process to Settle Different Claims for Different Type of Insurance Plans?

Life is unpredictable. Sometimes at its absolute high with joys, but a few times it touches the rock bottom too. Preparedness for such negative situations is the most prudent step that one can take. Insurance is a form of financial preparedness that can be used for such lows.

Insurance is broadly available in two categories, life insurance which safeguards your life and the general insurance for all other kinds of perils. While life insurance is a century-old concept, general insurance is the financial protection for all things that aren’t directly related to your life.

Insurance is an optional purchase which you can opt for. But some forms of insurance are mandatory by law like the motor insurance policies. The Motor Vehicles Act of 1988 mandates the purchase of such policy but other forms of insurance like health, home, commercial, travel and the like do not fall under the purview of a legal requirement.

An insurance claim is the process where you, the policyholder, demand the insurance company to compensate for the expenses that are covered under the policy terms. These events are exhaustively listed in your policy terms. All types of general insurance policies require a specific process to be followed to raise a claim. This article summarises the ways how you can file claims for different types of insurance policies.

For motor insurance plans

A motor insurance policy is the only mandatory insurance cover as described above. Depending on the type of insurance cover i.e., third-party plan or a comprehensive policy the process changes.

For third-party claims, the process begins with intimating the insurance company which is followed by submitting a copy of the FIR lodged with the policy authorities along with your claim application form. Once the motor accident tribunal decides upon the amount of compensation, the insurer is required to compensate the aggrieved third-party.

For comprehensive policies where a claim is made for own damages, the claims process depends on the type of compensation offered. If it is a cashless claim, after informing the insurance company, an insurance surveyor assesses the damages to the vehicle only after which the network garage can carry out the repairs. These repair costs are then settled directly by the insurance company. For reimbursement claims, the only change in the process remains where you need to pay for the expenses first which after submitting all the invoices are reimbursed by the insurer.

For health insurance claims

Just like motor insurance plans, health insurance claims are classified in two types—cashless or reimbursement. Cashless insurance claim can only be made at a network hospital which is a medical facility affiliated with the insurance company whereas reimbursement claims can be made at all other hospitals.

It starts with informing your insurance company of the treatment in case of planned medical procedures followed by getting an approval from the insurer. This pre-authorisation requirement is not needed for emergency medical procedures. One the treatment is complete, the insurer directly settles the treatment cost based on the terms of the policy with the hospital for cashless claims. For reimbursement claims, the treatment bills must be submitted to the insurer which are examined for its validity and then issued a compensation. * Standard T&C Apply. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.