What is the process called when an insurance company examines a claim for validity?

The process in which an insurance company examines a claim for validity is referred to as claims adjudication. This term encompasses the thorough evaluation and assessment of a claim to determine whether it meets the terms and criteria set forth in the insurance policy. During this process, the insurer reviews the details of the claim, including the circumstances surrounding the event, any supporting documentation provided, and the terms of the coverage.

Claims adjudication involves several critical steps such as verifying the information provided by the policyholder, assessing the nature and extent of the damages or losses, and ensuring that the claim aligns with the coverage outlined in the policy. The goal is to ensure fair and accurate settlements in accordance with the contract between the insurer and the insured.

Claims negotiation typically involves discussions about the settlement amounts after the validity has been established, while claims auditing refers to the internal review process to ensure compliance with procedures and regulations, not the examination of the claim itself. Claims evaluation is a broader term that can encompass various assessments but does not specifically capture the legal and procedural rigor implied in adjudication. Thus, claims adjudication best captures the process of validating a claim within the insurance framework.