Claims-Made Policy
What Is a Claims-Made Policy?
A claims-made policy only covers claims that are reported to your insurance company during a specified reporting period, which usually includes a window of time after the policy period ends. The claim incident also has to occur during the policy period or it won’t be eligible for coverage.
What Are Key Terms to Know for Claims-Made Insurance Policies?
Knowing these three terms will help you understand how a claims-made policy works:
- Effective date: The period of time between when your policy starts to when it expires (usually a year)
- Retroactive date: Extends your coverage term earlier than your effective date
- Extended reporting period: A period that allows you to make claims on your policy as long as the incident itself happened during your policy period (usually a 60-day window after your expiration date)
What Does Claims-Made Mean in an Insurance Policy?
Think of your claims-made insurance policy like it has a submission box that will only accept claims that happened and were reported during the policy period.
The dates in a claims-made policy could look something like this:
| Retroactive Date | Effective Date | Extended Reporting Period |
|---|---|---|
|
01/01/2021–01/01/2025 |
01/01/2024–01/01/2025 |
01/01/2025–03/01/2025
|
Not every policy works like this. Occurrence policies have their own rules for when a claim must be reported and when the incident took place.
Claims-Made vs Occurrence Policies: What’s the Difference?
There are two major differences between a claims-made policy and an occurrence policy:
- The reporting period
- When a claim incident occurs
If you have a claims-made policy, you have to report your claim during the policy period or the extended reporting period. Plus, the incident itself has to have occurred during your coverage period — in other words, from the retroactive date to the expiration date.
On the other hand, an occurrence policy allows you to report a claim during the policy period or after the expiration date as long as the actual incident occurred during your coverage period.
Note: The smartest move is to report a claim as soon as you know about it. Don’t delay!
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