What Are Insurance Claims?

When an insured event happens and you make a claim, the insurer will check the facts of the case for validity. If the conditions of your agreement are met, the insurer will pay out to you. Sometimes this involves the insurer replacing damaged property – such as providing a replacement car. Or alternatively the insurer may give you money instead.

In both cases, the idea is that the insurer puts you back in the same position you were in financially before the insurance claim occurred.

For example, if you insure a five-year-old car and it is stolen, the insurer will either find a replacement or give you the money to buy one of a similar age and condition, rather than giving you a brand new car.