Claims processing | Outsourcing Glossary | Outsource Accelerator (2024)

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Definition

What is claims processing?

Claims processing is a procedure where an insurance company receives and verifies a policyholder’s formal request for claims. It involves an investigation to validate the claim and determine the proper amount to reimburse to the insured individual.

If the claim request is found to be invalid, fabricated, or not covered in the policy terms, the company may refuse to approve it. In most situations, only the insured individual is eligible to claim the compensation.

Types of insurance claims

There are various types of insurance claims, including:

Health insurance claims

Individual or group health insurance policies protect patients from financial responsibilities that would cause severe financial damage.

Health insurance claims submitted by doctors on behalf of insured individuals require minimal work from policyholders since the majority of medical claims are processed automatically.

Property and casualty claims

Property is one of the most expensive assets that a person will acquire in their lifetime. A claim for damage to a property is initially directed online to a representative, often known as an agent or claims administrator.

Unlike health insurance claims, the insured individual is responsible for reporting damage to the property they own. Depending on the kind of claim, the insurance company inspects and analyzes property damage before compensating the insured.

Life insurance claims

In the case of death, a death certificate along with the original policy and claim form are required for life insurance claims. The process may need an in-depth review by the insurance provider to confirm that the insured’s death did not fall under a contract exclusion.

Without reducing circ*mstances, the procedure usually takes 30 to 60 days, giving beneficiaries enough money to replace the deceased’s financial assistance to lessen the burden.