What is meant by the process of "claim settlement" in insurance?

What is meant by the process of "claim settlement" in insurance?

• A. The average time it takes to issue a policy
• B. The procedure followed by an insurer to approve or deny a claim made by a policyholder
• C. The amount an insured must pay before reimbursement
• D. The determination of policy limits before a claim is made

Answer: (B)

Claim settlement refers specifically to the procedure that an insurer follows to evaluate, approve, or deny a claim submitted by a policyholder. This process entails a thorough review of the claim details, assessing whether the claim is valid based on the terms and conditions outlined in the insurance policy. Factors such as the nature of the claim, evidence provided, and coverage limits are all taken into consideration during this evaluation. A successful claim settlement can lead to the insured receiving the benefits they are entitled to under their policy, while a denial may be issued if the claim does not meet the necessary criteria. Understanding this process is crucial for both insurers and policyholders, as it plays a significant role in the overall function and trustworthiness of the insurance industry.

Claim settlement refers specifically to the procedure that an insurer follows to evaluate, approve, or deny a claim submitted by a policyholder. This process entails a thorough review of the claim details, assessing whether the claim is valid based on the terms and conditions outlined in the insurance policy. Factors such as the nature of the claim, evidence provided, and coverage limits are all taken into consideration during this evaluation.

A successful claim settlement can lead to the insured receiving the benefits they are entitled to under their policy, while a denial may be issued if the claim does not meet the necessary criteria. Understanding this process is crucial for both insurers and policyholders, as it plays a significant role in the overall function and trustworthiness of the insurance industry.