The Insurance Claim Life Cycle step-by-step
Claims management in insurance involves the systematic process of handling and resolving insurance claims made by policyholders. It is a critical function in the insurance industry, encompassing everything from the initial claim filing to the final settlement or denial.
Claims management in the insurance industry plays a pivotal role in upholding the trust and credibility of insurance companies. When policyholders face a loss or damage, they rely on the insurer to fulfill their promise promptly and fairly. Effective claims management ensures that policyholders receive the compensation they are entitled to, fostering customer satisfaction and loyalty.
It serves as the bridge between policyholders’ needs and insurers’ responsibilities. This blog will explore the realm of claims management in insurance, delving into its fundamental components and addressing other crucial aspects.
Understanding Claim Management in Insurance
In the insurance industry, claims management is a vital process. Let’s understand what claims management is and how it works below.
The insurance claims process is an arduous one. The insurance claim life cycle has four phases: adjudication, submission, payment, and processing. It can be difficult to remember what needs to happen at each phase of the insurance claims process. This blog post will break down the insurance claims life cycle for you so that you know where your claim stands!
What are the steps of a Claim Life Cycle?
Adjudication
Adjudication insurance claims are typically the first step in your insurance claims life cycle. Adjudication is where proof of loss documentation must be submitted to an insurance company, which then determines if you have a valid claim for payment based on the details given by the claimant. This phase can take some time as it requires many parties to gather all of the needed insurance claim information.
Submission:
Submission insurance claims are generally the second part of your insurance claims life cycle, depending on how long it takes to receive an adjudication decision from your insurer. If you do not hear back after a certain time period then this phase begins with sending in proof-of-loss documentation to the insurance company.
Payment:
The third part of the insurance claim life cycle is payment insurance claims. This phase can be divided into two parts depending on whether or not there were any changes when the insurer processed your insurance claim. If your insurance claim is on the lower end, you may receive a payment within a few days of submission. If there were significant changes to be made on your insurance claim (i.e., new information was submitted), then it can take up to six weeks for insurance claims processing.
Processing
The final phase in the insurance claims life cycle is insurance claims processing. This is where your insurance company will send you a check or electronic payment for the number of damages covered by your insurance policy, minus their deductible and any insurance premiums that have been assessed to date on your account. The four phases may seem daunting at first glance, but as long as you follow each step along the way, this process should go smoothly for you and your insurance claim!
So, those are the four phases of insurance claims. As long as you know what to expect and when to expect it, dealing with insurance companies during this process will be much easier! Remember to keep all your documentation in a safe place so that you can easily find it if needed. And most importantly, stay patient – these things take time.
Every claim is different, and although the claims process can vary slightly according to the situation, your adjuster will devote the time and attention it takes to resolve your particular case.
How does Terra streamline each part of the claim’s life cycle?
Terra integrates functionalities to make each part of the process more streamlined. Payment and Adjudication work faster because communication are centralzied and Terra allows you to make electronic payments. At the same time the processing step is made much easier because of terra’s reporting capabilities, and strong reporting.
The benchmark feature in Terra allows brokers and insurers to test their process and see if there’s room for improvement and where. You can also track your insurance policies end to end.
Check out what Terra can do by scheduling a demo with our team, and see it for yourself