What is a Claim in insurance terms?

A claim in insurance terms refers specifically to a request for payment for a covered loss. When a policyholder experiences a loss that is covered under their insurance policy, they formally submit a claim to the insurance company. This process allows the policyholder to seek compensation for damages or losses incurred, aligning with the purpose of insurance which is to provide financial protection against unforeseen events.

This definition highlights the critical role claims play within the insurance landscape, as they are the means through which insured individuals or entities receive the benefits they have contracted for in exchange for their premium payments. When a claim is filed, the insurance company will then assess the situation, determine the validity of the claim, and decide on the payout amount in accordance with the policy terms.

The other options, while related to aspects of insurance, do not accurately define what a claim is. The process of applying for a new policy refers to obtaining insurance rather than claiming on an existing one. Negotiating for premium costs involves discussions around payments and does not pertain directly to loss compensation. Meanwhile, the transfer of ownership of a policy concerns the legal aspects of insurance policy management, but it is not a claim.