What is a claim in insurance?

A claim in insurance is the formal request made by a policyholder to their insurer for payment under their policy after a covered event has occurred. The claim process is the moment when the value of an insurance contract is realised, and Australian insurers are required to handle claims fairly, promptly, and transparently under the General Insurance Code of Practice and the Insurance Contracts Act 1984.

The standard claim process has several steps. The policyholder reports the event to the insurer, usually by phone or through an online portal, as soon as practical after it occurs. The insurer issues a claim reference number and provides a list of the information it needs, typically including the date and circumstances of the event, any photographs, police reports for theft or accidents, repair quotes, and proof of ownership for damaged items. The policyholder pays the agreed excess up front, sometimes directly to the repairer or service provider.

The insurer assesses the claim. For larger claims, an assessor (sometimes called a loss adjuster) may inspect the damage in person. The insurer applies the policy terms, decides whether the claim is covered, and either approves the claim (in full or in part), denies it, or asks for further information. The General Insurance Code of Practice requires decisions to be made within ten business days of receiving all necessary information for most claims, with longer periods for complex claims.

Approved claims are paid in cash, by arranging repair through the insurer's preferred repairer network, or by replacing items directly. Denied claims must be explained in writing with reference to the specific policy term that has not been satisfied. Policyholders who disagree with a decision can request internal dispute resolution within the insurer (which must respond within 30 days), and if still unsatisfied, can take the matter to the Australian Financial Complaints Authority (AFCA). AFCA can make binding decisions and is free for consumers. The insurer's claim history and customer satisfaction data is published in the annual General Insurance Code Governance Committee report.