Insurance Claims Terms

Here's a clear breakdown of insurance claims terms:

Filing a Claim

• Claim — A formal request for the insurance company to pay a benefit.

• EOB (Explanation of Benefits) — A statement showing what was billed, what insurance paid, and what you owe. Not a bill.

• First Notice of Loss (FNOL) — The initial report you make to the insurer after an incident occurs.

• Proof of Loss — Documentation you submit to support your claim (medical records, receipts, bills, etc.).

• Claim Number — A unique ID assigned to your claim for tracking purposes.

• Filing Deadline — The window of time you have to submit a claim after an event. Missing it can mean denial.

During the Claims Process

• Adjuster — The insurance company's representative who investigates and evaluates your claim.

• Independent Adjuster — A third-party adjuster hired by the insurer, not a direct employee.

• Public Adjuster — Works for you, the policyholder, to help maximize your claim settlement.

• Investigation — The insurer's review of facts, documents, and circumstances surrounding a claim.

• Covered Loss — A loss that qualifies for payment under the policy terms.

• Coordination of Benefits (COB) — When multiple insurance plans work together to pay a claim without overpaying.

Decisions & Outcomes

• Approval — The insurer agrees the claim is valid and will pay the benefit.

• Denial — The claim is rejected. The insurer must provide a reason.

• Partial Claim Payment — Only a portion of the claim is approved.

• Appeal — A formal request to have a denied or underpaid claim reviewed again.

• Grievance — A formal complaint filed against the insurer for how a claim was handled.

Payments

• Settlement — The final agreed-upon payment that closes the claim.

• Lump Sum Payment — The entire benefit paid at once in a single check (very common in supplemental/cancer policies).

• Reimbursement — You pay first, then submit receipts, and the insurer pays you back.

• Direct Payment — The insurer pays the provider (hospital, doctor) directly, bypassing you.

• Assignment of Benefits (AOB) — You authorize the insurer to pay the provider directly on your behalf.

• Indemnification — Being restored financially to where you were before the loss.

Red Flag Terms

• Subrogation — After paying your claim, the insurer may sue the at-fault party to recover what they paid.

• Fraud — Filing a false or exaggerated claim. Can result in policy cancellation, repayment, or criminal charges.

• Material Misrepresentation — Lying or withholding key information on an application. Can void a policy entirely.

• Reservation of Rights — The insurer is investigating but reserves the right to deny the claim later. A warning sign.

• Statute of Limitations — Legal deadline to sue an insurer over a disputed claim.