An insurance claim is a request made by a policyholder for compensation from an insurance company for a loss or expense, with the possibility of acceptance or rejection based on the company's analysis. The main types of insurance claims are health, life, and property, and the number of claims can influence premium rates, potentially resulting in hikes or cancellations. In property insurance, validated claims may involve multiple payments, and co-insurance arrangements with mortgage or condominium companies require policyholder oversight in reimbursement processes.

1. PROPERTY INSURANCE CLAIMS BASICS
Griffin McGahey

2. INTRODUCTION
An insurance claim is a request of a policyholder to an insurance
company to compensate the policyholder for an expense or loss. Based
on its analysis, the insurance company may either accept or validate
the claim or reject it.

3. Insurance coverage is said to indemnify a policyholder. In other
words, indemnify means to exempt or protect from a liability. A
policyholder may be an individual or a group of individuals such as
the employees of a corporation. In exchange for the protection of an
insurance policy, the policyholder pays a premium. This is a
regular payment made to the insurance company.

4. For consumers, there are three main types of insurance claims:
health, life, and property. Health insurance is meant to cover
major medical expenses such as surgery and inpatient expenses to
such an extent that the policyholder is protected from life-changing
financial setbacks in the event of an accident or serious illness.
More comprehensive health policies will also cover doctor's visits
and other relatively minor outlays. Life insurance provides for the
financial welfare of identified beneficiaries in the event of the
death of the policyholder. With this type of policy, there is typically
a caveat that the death must not be due to criminal activities or
suicide. Property insurance typically takes the form of
homeowner's insurance, as the house would most likely be the
single largest asset of a policyholder in his or her lifetime.

5. Claims filed against property insurance may have a direct impact
on the premium amount that a policyholder will be asked to pay.
As the number of claims increases, there is a likelihood of a
premium rate hike. Some insurance companies may cancel
coverage outright if too many property insurance claims are filed.

6. Another factor for a premium rate increase for property insurance
is any involvement the policyholder has regarding the coverage
event. If the property damage is due to the actions of the
policyholder, the rate will almost certainly increase. If the
policyholder is not at fault for the property damage, the premium
would most likely stay the same.

7. In considering premium rate adjustments, insurance companies
consider other factors in addition to the number of claims and who
is at fault. These can include the policyholder’s credit rating, or the
frequency of natural disasters in an area. All these statistics are
considered in an insurance company's analysis of how likely the
policyholder will trigger another claim event, and the premiums
are adjusted accordingly.

8. One thing to note about a property insurance claim, should it be
validated, is that the initial payment from the insurance company
is not final. Multiple checks may be advanced by the insurance
company during this process, with the first check being an advance
to the full settlement. An insurance company may elect to split
payments based on different categories of coverage. For insurance
for a home, for example, one check might be for the damage to the
home, another check could be for the damage to the property inside
the house, with a third check covering the cost of temporary
shelter while the house is being repaired.

9. For houses under a mortgage or for condominiums, one condition
that a finance company and a condominium management company
may impose on a policyholder is that they be named as co-insured
under the policy. This is done so that the finance company or
condominium management has assurance that the insurance
payment will be used for the necessary repairs. Under this
arrangement, a policyholder can only take out funds with the
agreement of the co-insured.

10. During repairs to an insured property, some contractors may ask
the policyholder to sign a direction to pay form. This will allow
payments to flow from the insurance company to the contractor. In
cases like this, the policyholder is advised to monitor the
contractor’s activities and inform the insurance company if the job
has been completed in accordance with the contract before the final
payment is released.