Claim
A claim is a request for an insurer to apply a policy to a covered loss, event, service, or bill. The insurer investigates and pays its covered share, subject to the policy's limits, exclusions, deductible, valuation rules, and deadlines. Filing a claim starts the coverage decision process; it does not by itself guarantee payment.
Also called: insurance claim, claim number, claim #, first-party claim, third-party claim, CLM
A claim is the step that turns a policy into a payment decision. You report a loss, an injury, a service, or a bill, the insurer investigates, and it pays the covered amount after your deductible, up to the limit. Anything the policy excludes, or any amount above the limit, stays with the policyholder, and a claim can also affect a later renewal price.
How a claim works, with a $3,500 repair
Take an auto collision repair with a covered estimate of $3,500 on a policy with a $1,000 deductible. The deductible is paid out of pocket before the insurer pays its share, according to NAIC (opens in a new tab).
Hover or tap a row to highlight it.
| Item | Amount |
|---|---|
| Covered repair estimate | $3,500 |
| Policyholder pays the deductible | $1,000 |
| Insurer pays | $2,500 ($3,500 minus $1,000) |
| Left for the policyholder on the covered repair | $0 |
The $0 left assumes the insurer accepts the repair cost and no excluded or over-limit item remains. The $1,000 deductible is an example; the NAIC auto insurance guide (opens in a new tab) gives $500 and $1,000 as common deductible examples. With a $500 deductible, the insurer pays $3,000 and the policyholder pays $500.
A liability claim works differently: the insurer may pay an injured third party within the liability limit, and the policyholder may owe amounts above it.
What changes the amount a claim pays
A higher deductible shifts more of each covered loss to the policyholder and generally lowers the premium; a lower deductible does the reverse, according to NAIC (opens in a new tab). The coverage limit caps what the insurer pays, and a lower limit leaves more exposure with the policyholder. A deductible changes the amount paid on a covered loss; it does not create coverage for an excluded loss.
The valuation method also changes the payment. Actual cash value accounts for depreciation, while replacement cost follows the policy's replacement-cost rules. For auto damage, our comprehensive vs collision guide shows which coverage responds to which kind of loss.
Who the claim is against matters too. A first-party claim asks for benefits under your own policy. A third-party claim is made against another person's liability coverage.
Notice and proof-of-loss deadlines can affect whether a claim is payable. They come from the policy and, in some lines, from state law.
Where you meet the term
"Claim" appears across auto, homeowners, condo, renters, life, disability, health, dental, pet, and business insurance. Business claims include commercial property, general liability, workers' compensation, commercial auto, professional liability, cyber, and business interruption.
On paper, you see it in several places:
- The declarations page lists the policy number, limits, and deductibles that a claim will use.
- The conditions section sets the duties after a loss, including notice, cooperation, and proof of loss.
- A renewal notice can show premium changes and claim-history effects.
- A claim letter can acknowledge the claim, request information, reserve rights, explain a payment, or state a partial payment, denial, or settlement offer.
For health claims, the provider usually submits the request, according to NAIC (opens in a new tab). For auto, homeowners, and renters claims, the policyholder most often reports the loss and sends the documentation. HealthCare.gov (opens in a new tab) defines a health claim as a request for payment for items or services you think are covered, and the plan's Summary of Benefits and Coverage (opens in a new tab) shows the cost sharing that applies.
What Connecticut and New York require of insurers
Both states regulate how an insurer handles a claim. Neither rule makes a claim payable on its own.
In Connecticut, Conn. Gen. Stat. § 38a-816(6) (opens in a new tab) lists unfair claim settlement practices when committed often enough to show a general business practice. They include failing to acknowledge claim communications promptly, refusing payment without a reasonable investigation, and failing to explain the basis for a denial or compromise offer. For specified accident and health claims, Conn. Gen. Stat. § 38a-816(15) (opens in a new tab) sets payment periods that the Connecticut Office of Legislative Research (opens in a new tab) describes as 45 days for a clean claim, 30 days for a deficiency notice, and 15% interest on late payment. The statutory fire policy form in Conn. Gen. Stat. § 38a-307 (opens in a new tab) adds proof-of-loss requirements and a 24-month limit for suing under that form.
In New York, Insurance Law § 2601 (opens in a new tab) bars unfair claim settlement practices, and an insurer must accept or deny within 30 working days after a properly executed proof of loss. For motor-vehicle physical-damage claims, Regulation 64 (opens in a new tab) requires an inspection and a good-faith settlement offer within six business days after notice when the insurer elects to inspect before repair. For no-fault auto claims, Regulation 68 (opens in a new tab) generally sets written notice at no later than 30 days, medical bills within 45 days of treatment, and lost-earnings claims within 90 days, as the New York DFS no-fault FAQs (opens in a new tab) explain.
Questions to ask an agent or insurer
- Which coverage would respond to this event, and what exclusions could apply? A claim asks for one coverage to be applied, and payment depends on what that coverage promises and excludes.
- What deductible, limit, valuation method, and sublimits apply? These set your share and the most the insurer will pay.
- What are the notice, proof-of-loss, and documentation deadlines for this policy and state? Deadlines can affect investigation and payment.
- Could this claim affect my premium, renewal, eligibility, or claim-history report? Rating plans vary by insurer and state.
- If you deny or reduce the claim, which policy provision supports it, and what appeal, appraisal, or complaint process applies? A written explanation shows the coverage issue and the next route for review.
Frequently asked questions
These answers cover the questions that come up once a claim is open.
Does filing a claim guarantee payment?
No. Coverage, exclusions, limits, deductibles, conditions, proof, and the insurer's investigation decide whether payment is due. A claim letter can acknowledge the claim, ask for more information, pay part of it, or deny it with an explanation tied to the policy.
Can a claim affect my renewal or premium?
It can. NAIC (opens in a new tab) identifies claim frequency as a major rating factor and says individual claims can also affect rating. The effect depends on the state, insurer, line, claim type, fault, and rating plan. A feature such as accident forgiveness is set by the endorsement or rating plan, so ask what it covers before relying on it.
Is a claim the same as a loss?
No. The loss is the damage, expense, injury, or service for which payment is sought, and the claim is the notice or request about that loss.