Filing an insurance claim can feel daunting—especially when you’re already dealing with a medical emergency, property loss, or personal distress. But understanding how the insurance claims settlement process works can reduce anxiety and help you claim what’s rightfully yours.

This guide breaks down the four essential stages of the insurance claims settlement process in India—whether you're dealing with health, motor, or life insurance.

What Is Insurance Claims Settlement?

The insurance claims settlement process is the procedure through which an insurance company assesses, verifies, and pays out a claim made by the policyholder or nominee. In India, this process is governed by the Insurance Regulatory and Development Authority of India (IRDAI), which ensures transparency, fairness, and timely settlement.

Stage 1: Intimation of the Claim

The first and most crucial step is notifying the insurer about the event as soon as possible. This is called claim intimation.

What You Need to Do:

• Inform the insurer via their toll-free number, website, mobile app, or email Provide policy details, date/time of the event, and brief description

• For health insurance: inform within 24-48 hours (for hospitalisation)

• For motor or life insurance: ideally within 7 days (or as specified in the policy)
  

Why It Matters:

Delays in intimation can result in claim rejection, especially if it violates policy terms.

Stage 2: Documentation and Verification

Once the claim is raised, the insurer will request supporting documents based on the type of policy.

• Common Documents Required:

• Policy copy

• Claim form (duly filled)

• Hospital bills/discharge summary (for health insurance) FIR and repair bills (for motor insurance)

• Death certificate and KYC (for life insurance)

The insurer then verifies the documents and may initiate an investigation if needed.

Tip:

Always keep original documents and scan digital copies. Ensure names and dates match across all paperwork to avoid delays.

Stage 3: Assessment and Approval

Once the documentation is verified, the insurer assesses the validity of the claim.

What Happens:

• The claim is examined against the terms and conditions of the policy

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• For cashless claims (like health insurance), the hospital and insurer coordinate directly
  

• For reimbursement claims, the insurer reviews bills and determines payable amounts In life insurance, nominee details and cause of death are examined carefully

If everything is in order, the claim is approved. If discrepancies are found, it may be queried or denied.

Stage 4: Settlement and Payout

The final stage is the actual settlement of the claim. Once approved, the payout is processed.

Payout Modes:

• NEFT transfer to the policyholder or nominee’s bank account Direct payment to hospitals (in cashless cases)

• Cheques in some legacy or rural cases

Timelines as per IRDAI:

Claims must be settled within 30 days of receiving all required documents

If an investigation is initiated, it must be completed within 90 days, with payment made within 30 days thereafter

Common Issues Faced During Insurance Claims Settlement

• Claim rejection due to non-disclosure of pre-existing conditions Delay in filing or incomplete documentation

• Disagreements over claim amount or repair costs Lack of clarity on policy exclusions
  

What You Can Do:

If your claim is delayed or denied unfairly, raise a grievance with the insurer. If unresolved, escalate to:

IRDAI: https://igms.irda.gov.in 

Insurance Ombudsman: https://cioins.co.in

Final Thoughts: Be Prepared, Stay Informed

Understanding the insurance claims settlement process is your first line of defence against unnecessary delays and rejections. Whether it's a health emergency, a car accident, or a family tragedy, knowing what to expect empowers you to act swiftly and confidently.

Quick Tips:

Read your policy terms carefully Keep documents handy and updated Don’t delay in informing your insurer

Follow up regularly after filing the claim

Share Your Experience

Have you recently gone through the insurance claims settlement process in India?

Share your story below—or reach out to our team if you'd like help spreading awareness and guiding others.

This guide is part of our ongoing insurance literacy series. Subscribe to stay informed on policy tips, claim rights, and financial protection advice.