Claim Vs Suit
It is a formal request, presented in paper form or online, to an insurance company that asks for a payment made towards the claimant party based on the terms & conditions of the active insurance policy. The insurer, on receiving the required set of documents and the request itself, reviews the claim with extra care to check its validity. If satisfied, the insurer then pays out the agreed upon sum of money either to the insured of the policy or the requesting party (acting for the insured) once the request is approved and appropriately negotiated between the concerned parties.
An insurance claim is practically just a demand for compensation for damages arising from a wide range of insurance policies. It may be a notice to pay up the death benefits on the insured’s life insurance policies or a request to schedule a routine health exam at the local clinic or even a liability claim against a business’s general liability policy.
This is the formal lawsuit filed against a person or business, when the demands of the claimant are not met with ample satisfaction to the concerned parties. Generally a suit is filed only if either the claim procedure had failed to appease the plaintiff (the claimant) or if the time to file a suit is almost up (as restricted by the applicable state laws) during the negotiations. In other words, a suit is a civil proceeding claiming damages owing to physical injury, destruction or damage of property or personal & advertising injury (slander, libel) as covered by the policy.
Beside formal lawsuits, the term Suites may indicate an arbitration proceeding or some other mode of alternate dispute resolution (ADR) through which damages can be claimed against the defendant. ADR proceedings are accepted if one agrees to follow the steps voluntarily after securing the insurer's consent. For example, if the defendant and the plaintiff agree to resolve the lawsuit via mediation, then with the defendant’s insurer’s consents to mediation, it falls into the category of a suit.
Highlights on the Differences:
- A Claim concerns the claimant party and the insurance company. It may or may not involve an attorney. A Suit almost always involves an attorney and has the defendant, the insurance company and the plaintiff (the claimant) as the concerned parties. Generally, a suit is the result of a claim procedure gone unacceptably bad.
- A Claim is generally initiated by the claimant sending across a demand letter in paper form or online to the insurance company of the at-fault party along with various legal documents, bills (medical, repair service related etc.) and relevant reports to authenticate and validate the incident. A Suit is initiated when an attorney representing the plaintiff files a Summons & Complaint with the respective Clerk of Court that has legal jurisdiction over the place of incident.
- A Claim in itself does not cost anything to the claimant, unless the professional help of an attorney is expressly sought to file it. Whereas, a Suit has a set of typical expenses to be dealt with. The list is as below:
- Attorney fees (additional fees if the attorney was already hired to handle the claim proceedings)
- Filing fees
- Fees charged by the Sheriff to serve the parties
- Court Reporter fees – if applicable
- Expert fees – if applicable
- Copying costs etc.
- Stages of Claim proceeding involves the following steps in general:
- Claimant submits claim form / demand letter
- Insurer assigns the case to a claim adjuster after generating a claim number for future reference
- Claim adjuster reviews the submitted documents, makes calls and interviews with the relevant people and witnesses and evaluates all evidences as submitted to the insurer
- Series of back and forth negotiations are initiated between the insurer and the claimant, based on the adjuster’s findings and reports
- Final Claim amount is settled upon discussion
- Money is disbursed, case is closed.
A Suit involves the following stages:
- Attorney representing the plaintiff files a Summons & Complaint with the respective Clerk of Court that has legal jurisdiction over the place of incident.
- The Defendant is then served by the Sheriff or process server
- The defendant files an answer within a fixed days range, generally 30 days from being served.
- Exchange of court-mandated proofs, documents along with gathering Expert opinions
- If the case is not settled in this way, there are options for out-of-the-court proceedings such as Mediations, Arbitrations etc. and also of a jury verdict, as applicable.
However, as a layman it is recommendable to always consult with at least one attorney before filing a Claim and / or a Suit, in case of any significant demands over the damages.