Claim Provision
What Does Claim Provision Mean?
A claim provision is a clause in an insurance contract that outlines the procedures to be followed for the submission and administration of claims. In the context of a reinsurance agreement, it details the terms and conditions under which the reinsurer’s liability for claims will arise. Additionally, it specifies the authority of the ceding company and any restrictions on that authority in handling claims.
Insuranceopedia Explains Claim Provision
A claim provision is commonly included in an insurance contract to address issues arising from policy benefit requests due to the disability or death of the insured. Anyone filing under a disability insurance policy, for instance, has to follow the notification steps in this clause within the window the insurer sets. Key elements of this clause include liability, notification, and good faith, among others. The liability section acknowledges the insurer’s responsibility under the contract for a specified period. The notification section outlines the process for how notice of a claim must be submitted to the insurance company. For a life insurance beneficiary, the claim provision is what they follow to collect the death benefit, since the insurer needs a certified death certificate and a completed claim form before it can release payment. Lastly, the claim provision requires all parties to act in good faith when requesting or handling claims related to the insurance.
