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What is Health Insurance?

Health insurnace is a type of insurance that covers the cost of policyholder’s medical expenses including surgical, dental, hospitalization expenses, etc. Basically, health insurance helps you pay a portion of medical expenses. Just like car insurance, you pay a monthly premium for your policy. Health insurance also covers you in case of an accident.

Just like other insurance plans, the premium cost for health insurance varies according to the type of coverage you choose.

When buying a health insurance policy, keep the following consideration in your mind.

Components of a Health Insurance Policy:

  1. Premium:
    Premium is the amount/ fee that you pay for your coverage. This premium is calculated by the insurance providers based on different factors like gender, age, and medical history. If you choose to pay less premium, you will be paying high medical expenses out of your pocket and vice versa. You need to pay these premiums on the due date. If you don’t pay the full premium on the due date, your health insurnace policy may get suspended or canceled.
  2. Deductible:
    Health insurance deductible is the amount that you pay out of your pocket before your insurance policy pays for medical expenses. A deductible can be $500 or sometimes it’s much higher. This amount varies according to your selected coverage. So, when buying health insurance, ask your insurance provider for these deductibles.
  3. Copayments:
    Copayment, also know as copay, is the amount of money that you pay each time you visit a health care center. You pay this amount at the time when you receive a health service. Copay varies according to the type of health service you received. This is the fixed amount you need to pay and the rest of the bill is covered by your insurance policy. For example, if your copay is $50 and your health service total fee is $500, you will pay $50 and the rest is paid by your insurance policy.
  4. Coinsurance:
    In addition to deductibles and copayments, you also pay coinsurance. Coinsurance is the percentage that you pay for the health service you received. Coinsurance is different from copay because copay is a fixed amount while coinsurance is the percentage of your share in medical service’s expenses. For example, the total cost of your health service is $2000 and the copay is $50. The insurance company pays 80% of the remaining cost ($1950) or $1560. The total amount you would pay out of your pocket is copay($50) plus 20% ($390) which would be $440.
  5. Exclusions:
    Sometimes health insurance policies don’t cover all of the medical expenses such as tummy tucks or facelifts etc. Before buying a health insurance policy, you should ask for all these exclusions from your insurance provider.
  6. Coverage Limits:
    There is a maximum coverage limit associated with your health insurance policy. These limits can be monthly or annual.

How Does Health Insurance Work?

Health insurance policy protects you from paying the full amount of your medical services and expenses like pre-hospitalization, stay and post-hospitalization.

Health insurance policy comes with different coverage options, you can choose the plan that fits best for your needs. Different insurance plans impose a condition that you receive health services from a certain network for the highest level of coverage. If you choose health service outside of this network, you will be paying a high percentage of the total cost.

Sometimes, certain health services need preauthorization otherwise your coverage can be denied. All these conditions and limits are mentioned in the contract between you and your insurance provider.

Importance of Health Insurance

Having health insurance is an important part of your financial life because medical services are always very expensive. Health insurance is not important for yourself, it also important for your family. Because it becomes a tough situation when the sole earner is in a hospital bed.

Health insurance is so important that in some countries, like the United States, health insurance is included in the employer’s package.

Benefits of Health Insurance

  1. Financial Protection:
    Having a health insurance policy protects you from financial attacks like medical bills that are very expensive. You only pay premiums, deductibles, and copay, the rest of the medical bill is paid by your insurance policy.
  2. Cashless Claim Benefit:
    Many insurance providers provide cashless claim benefit options. In this option, you are required to get admitted to the insurer’s network of hospitals. All of your expenses will be settled by your insurer.
  3. Easy To Find a Doctor:
    If you’re a traveler and you’re out of your country where you’re in a medical emergency, your insurance provider can help you find a nearby doctor/hospital within the insurance provider’s network. Not only it helps to find a doctor/hospital but it also saves a lot when it comes to medical bills.
  4. Peace of Mind:
    Health insurance policy gives you peace of mind that you’re always covered when you’re at a very vulnerable point in your life. Your insurance provider will be there to make sure your treatment is started immediately.

Bottom Lines:

Having good health is the most precious asset, and we all protect it at all costs. Health insurance policy contributes a lot when it comes to paying expensive medical bills.

If you have any confusion about the health insurance policy, let us know in the comments section below.

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Photo Credit: Pexels

What is an Insurance Claim?

An insurance claim is a kind of request that you make to your policy provider for compensation for your financial loss or it can be for illness, damage to property, etc. When it comes to the car insurance claim, you request your insurance company to compensate for the loss in case of an accident, car damage or in the worst case, when the car got stolen.

The insurance company investigates the claim in detail and follows the process that we’re going to mention shortly in this article, and once they approve your claim, then you get paid. Claiming car insurance, in case of incidents, is your right because you have been paying annual premiums to your insurance company.

Getting car insurance is a separate thing and claiming car insurance is another thing.  We know you want to get the answer to these questions ASAP: “How To Claim Car Insurance?” and “What is The Process?

We’re going to answer all of your questions in this article. Before we dive into the details, you should know the types of car insurance claims.

Also, Check: 8 Important Things You Should Know About Before Buying Car Insurance

Types of Car Insurance Claims

1. Third Party Car Insurance Claim

This is the simple and minimum cover required for auto insurance. It’s also known as “Liability Coverage”. In this type of claim, there are three parties involved. First-party (who purchased the insurance policy), the second part(insurer/insurance company) and the third party who caused the accident or got involved in the accident. The third-party car insurance claim is the best choice for the protection against the claims of the third party.

In short, when you file an insurance claim against another person’s policy, it becomes a third-party insurance claim.

There are 2 main types of Third-party insurance claims.

  1. Bodily Injury Liability (BIL):
    BIL covers legal costs, funeral expenses, and medical bills.
  2. Property Damage Liability (PDL):
    PDL covers repairing the damages of another person’s car or even replacing their car.

2. Not At Fault Accident

You fall into the “Not at Fault Accident” state when the accident was not your fault, rather the accident was caused by someone else’s negligence. In this case, you file a claim to your insurance provider company and your company pays for the damages. In this case, your company first communicates with the other person’s insurance company to see if they accept their responsibility.

After this process, you get paid for the damages. However, this type of insurance claim is subject to a limited amount.

3. Total Loss Claim

If the accident was so severe that the repair cost exceeds the value of your car, then you move to “Total Loss Insurance Claim”. This claim is also applicable if your car was stolen and not recovered. In this case, your insurance company gets your details and the value of your car, and after following their internal process they issue your payment.

When to Claim Car Insurance?

Each time, you claim your car insurance the rate of your premiums that you pay to your company, goes high. Or even you will be penalized for 3 years if it’s proved that the accident was your fault and you fall in the “At-fault accident” state. So, you should not file an insurance claim in every accident.

The general rule is if the rate of premium (that would rise after your claim) is higher than the cost of damage, don’t file the insurance claim.

Here are a few points, when you should avoid filing an insurance claim. When:

  1. Only your car is damaged.
  2. Other’s property damage is minimal.
  3. There is a chance of a rise in the premium rates.

And here are a few points when you should file an insurance claim.

  1. When you fall in the “Total Loss” state.
  2. When you fall in the “Not at-fault Accident” state.

How Does Car Insurance Claim Work?

When you file a car insurance claim, your case is assigned to an insurance agent/adjuster who will set up the meetings with you to get all the details about the incident. Make sure you give him all the details even the smallest one and don’t hide anything from him. Because it can get your insurance claim denied.

These 3 steps explain how the car insurance claim process works.

1. Prepare to File a Claim

After the accident, the very first thing you need to do is “Stop Right There!” otherwise you’re also breaking the law. Stop the car, and get the details of the other person involved in the accident. These details include:

  • Car Registration Number.
  • Full Name, complete address and phone number of the other driver.
  • Other driver’s insurance details.

You need to collect these details because the insurance agent/adjuster is going to ask for this information. You’re legally obliged to leave your contact details with the other driver. You’re also legally obliged to call the police immediately because the insurance company may ask for a police report.

Don’t forget to take pictures of all the cars involved in the accident.

2. Contact Your Insurance Company

Once you have collected the information, call your insurance company and tell them about the accident so that the claim process can be started. The insurance adjuster can also ask for the time of accident and weather conditions at that time.

3. Wait For The Settlement

After following internal processes(like calculating damage cost, appropriate compensation, etc.), your insurance company will send the payment.

You might be wondering about the average car accident settlement time, it varies from state to state. For example, in California, the insurance department requires insurance companies to give feedback to the policyholder within 40 days after a claim is filed and the proof is provided.

Above mentioned steps are for the insurance claim process for car accidents. Now let’s check the stolen car insurance claim process.

But before we dive into the claiming process for the stolen car, first you need to know the following things.

Does Car Insurance Cover Theft?

Yes, but only if you have already purchased comprehensive coverage as part of your car insurance policy. This type of coverage also handles the replacement of car parts if they are stolen.

Comprehensive coverage helps you when:

  1. Your car is stolen.
  2. Certain parts of your car are stolen.
  3. Your car is damaged as a result of a break-in.

But this policy doesn’t cover the items or your personal properties stolen from the car.

Insurance Claim process for a Stolen Car

Here is what to do if your car is stolen.

1. Make Sure Your Car is really Gone

Before calling the police and your insurance company, make sure your car is really stolen. Check around and there are chances you have misplaced your car or maybe there is a “no parking” sign and your car is towed. When you’re completely sure that your car is stolen, then move to the next step.

2. Call The Police

When you are 100% sure your car is stolen, then call the police immediately and file an FIR. Give them all the required information like license plate number, VIN, year, make, model, etc. Then the police will add your car details in the national database so that it can be recovered as soon as possible and it will make harder for thieves to sell your car. GPS trackers can also help the police to find your car.

3. Call Insurance Company

After filing an FIR, now call your insurance company. You need to inform your insurance company immediately because if you take more time, it may look suspicious. The information that an insurance company requires for stolen car claim is.

  1. Police report number.
  2. Information about the people who had access to your car.
  3. Car condition when it was stolen.
  4. Location of the vehicle.

Remember, you’re the prime suspect when your car is stolen.

Each insurance company works according to its own work process. After you file a claim, your insurance company can put you in a waiting period (it can be from 4 to 8 weeks) to see if the stolen car can be recovered.

4. Wait For The Claim Settlement

Once your insurance company is sure that the car was really gone and the waiting period is over, then the insurance company will pay you the “Fair Market Value” of your car.

Car Insurance Claim Tips

Car Insurance Claim Tips
Car Insurance Claim Tips, Image Credit: Pixabay

Here are some handful of tips that can help you while filing a car insurance claim.

  1. Call the police immediately and file an FIR.
  2. Call your insurance company as soon as an incident(accident, car stolen, or injuries) takes place.
  3. If you have an accident, make sure to take pictures of the spot and gather all the information about the other person that is involved in the accident. This information includes Name, address, phone number, insurance policy details, and license plate number, etc.
  4. Be honest with your insurer and tell them all the minor details as well. Don’t try to hide anything otherwise, your claim may get invalid.
  5. Before spending any money, talk to your insurer first.
  6. Don’t try to settle the matter on your own.
  7. Make sure you submit incident details to your insurance within the time limit (this limit varies from insurer to insurer).
  8. Don’t accept losses estimate in rush offered by your insurer. First, find the market value of your car and compare it with the insurer’s estimate, and then take the decision.

Conclusion

Life is uncertain and anything can happen at random times like accidents, injuries or even the car is stolen. When such an incident happens, before you try to claim your car insurance policy, make sure you have knowledge about the prerequisites that we mentioned above in this Car Insurance Claim – Comprehensive Guide.

If you have any questions or tips, do share it with us in the comments section below.

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