The Insurance Claims Process, Step by Step
Six steps take every claim from first notice to payment. Learn the order and who acts at each one.
A claim is the point where an insurance contract stops being a promise and becomes a payment. A family in Pune finds its flat gutted by a kitchen fire; a commuter's scooter is stolen outside a Bengaluru metro station; a widow presents her husband's term policy. Each one starts the same chain of events inside the insurer.
IC-01 treats claims as a process with a fixed order. If you know the order, and who does what at each step, most claims questions answer themselves.
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The Claims Process, Step by Step
The general sequence. Life, health and general claims differ in detail, but the order holds.
- 1
1. Intimation
The insured or claimant tells the insurer that the insured event has happened, as early as possible: in person, online, through the agent or the call centre. Late intimation is not, on its own, a ground for rejection under IRDAI's current rules.
- 2
2. Registration and documents
The insurer registers the claim and asks for the claim form and the papers that prove the loss: an FIR for theft, a fire brigade report, a death certificate, repair estimates. Only documents directly related to the claim should be asked for.
- 3
3. Investigation or survey
For general insurance losses above IRDAI's threshold, a surveyor and loss assessor inspects the damage. Life insurers may investigate a death claim, typically one that arises soon after the policy starts.
- 4
4. Assessment
The insurer checks that the policy was in force, the loss falls within cover, the proximate cause is an insured peril and no exclusion or breached warranty applies. In general insurance it then quantifies the loss: depreciation, salvage, underinsurance.
- 5
5. Decision
The claim is admitted, partly admitted, or repudiated with written reasons. A repudiation must rest on evidence, not suspicion.
- 6
6. Settlement and discharge
The insurer pays, usually by electronic transfer, and takes a discharge from the claimant. In general insurance it may then take over salvage and pursue a negligent third party through subrogation.
Who Does What in a Claim
| Party | Role in the claim |
|---|---|
| Insured or claimant | Intimates the loss, takes steps to limit it, submits documents, cooperates with the survey |
| Insurer's claims department | Registers, assesses and decides the claim, and pays it |
| Surveyor and loss assessor | Independent professional who inspects a general insurance loss and reports its cause and amount |
| Third party administrator (TPA) | Handles health claims for the insurer, including cashless approvals at hospitals |
| Investigator | Checks facts on a doubtful claim, most often an early life death claim |
| Insurance Ombudsman | Hears a complaint the insurer has not resolved, for claims up to ₹50 lakh |
The Current Rules (IRDAI, 2024 Onwards)
IRDAI's Master Circular on Protection of Policyholders' Interests (September 2024) says no claim may be rejected or closed for want of documents or for delayed intimation. If an insurer misses the settlement timeline, it owes interest at bank rate plus 2% from the date of intimation, paid without being asked. The study course may still quote the older 2017 regulations, which counted 30 days from the last document; for the exam, learn the course's figure and know that the rule has since been tightened.
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Claims Terms You Must Know
- Intimation
- The first notice of loss given to the insurer. It starts the clock on the insurer's timelines.
- Repudiation
- The insurer's refusal to pay, wholly or partly, with reasons in writing.
- Discharge voucher
- The receipt the claimant signs on settlement, confirming the amount accepted.
- Salvage
- What is left of damaged property after a loss. Once the insurer pays in full, the salvage belongs to it.
- Ex gratia payment
- A payment the insurer makes as a goodwill gesture on a claim that is not strictly payable under the policy.
How IC-01 Tests This
Expect sequence questions ("which step comes immediately after the insurer verifies the claim form?"), document questions ("which paper is needed for a marine cargo claim?") and principle questions disguised as claims, where the right answer is subrogation, contribution or proximate cause.
The common trap is assuming a claim arises whenever a loss happens. In general insurance a claim arises only when an insured peril causes a loss to insured property while the policy is in force. Read every scenario for those three conditions before choosing.
FAQs
What are the steps in the insurance claim process?expand_more
Intimation of the loss, registration and documents, survey or investigation, assessment against the policy, the decision to admit or repudiate, and settlement with a signed discharge.
Can an insurer reject a claim because it was reported late?expand_more
Under IRDAI's 2024 master circular, a claim cannot be rejected or closed only for delayed intimation or for want of documents. Late reporting can still matter if it makes the loss impossible to verify.
What happens if the insurer delays settling a claim?expand_more
The insurer must pay interest at bank rate plus 2% from the date of intimation to the date of payment, on its own initiative.
Where can I complain if my claim is rejected?expand_more
First to the insurer's grievance cell, which must act within 14 days. If unresolved, a claimant can register on IRDAI's Bima Bharosa portal or go to the Insurance Ombudsman for claims up to ₹50 lakh.
Next steps
- Life vs general claimsarrow_forward
- Surveyorsarrow_forward
- Claim settlement ratioarrow_forward
- Proximate Causearrow_forward
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