How is a "claim" defined in an insurance context?

In the context of insurance, a "claim" is defined as a formal request for payment of a covered loss. This is initiated by a policyholder who has experienced a loss or damage that is protected under their insurance policy. By filing a claim, the insured is essentially asking the insurance company to provide financial compensation or benefits outlined in the policy terms.

Claims are critical in the insurance process as they enable policyholders to recover from losses, ensuring that the insurance serves its purpose of providing financial protection. The process typically involves submitting relevant documentation, such as proof of loss, receipts, and any other necessary information to validate the claim.

Other options do not align with the definition of a claim. For instance, requests for increased coverage pertain to adjustments in the policy rather than claims for losses. Notifications of policy cancellation relate to the termination of an insurance contract, while appealing a policy decision involves contesting the insurer’s judgment or decision rather than requesting payment for losses already incurred. This clarity around what constitutes a claim helps both insurers and insureds navigate their responsibilities and ensures that claims are processed efficiently.