What is the primary purpose of the investigation stage in claims handling?

The primary purpose of the investigation stage in claims handling is to verify the details of the claim. This stage is crucial because it allows the claims handler to assess the validity of the claim being reported by the policyholder. During this process, various aspects such as the circumstances surrounding the claim, the extent of the loss or damage, and the relevant policy coverage are thoroughly examined.

Verification helps ensure that the claim aligns with the terms of the insurance policy, confirming that the incident falls within the coverage limits and that the claim is substantiated by evidence. This thorough investigation is key to determining whether the claim is legitimate, ensuring fair treatment for both the insurer and the insured, and preventing fraudulent claims from being paid out.