What Does Claim Provision Mean?
A claim provision is a clause in an insurance contract that sets forth the procedure to be followed in the submission and administration of claims. In case of a reinsurance agreement, it states the terms and conditions under which the reinsurer’s liability for claims will arise. It also specifies the authority of the ceding company and restrictions on such authority in handling claims.
Insuranceopedia Explains Claim Provision
A claim provision is commonly included in an insurance contract to address issues arising from policy benefits requests by reason of disability or death of the insured. Elements of this clause include liability, notification, and good faith, among others. The section on liability recognizes the insurer’s liability under the contract for a certain period. The notification section, on the other hand, provides the process of how notice of a claim must be given to the insurance company. Finally, the claim provision also requires the parties to act in good faith in requesting or handling claims to the insurance.