What is the difference between claims and occurrence?
Asked by: Jeramie Carter III | Last update: December 13, 2025Score: 4.2/5 (67 votes)
What is better, claims made or occurrence?
In short, occurrence-based policies provide ample coverage as long as you keep renewing them. For this privilege, you'll generally pay more than you would for claims-made policies. With claims-made policies, the amount of coverage you purchase must last for as long as you keep your policy.
Is per claim or per occurrence better?
Typically for the first five years of coverage, claims made policies tend to be less expensive than occurrence policies. But keep in mind that as your business faces more exposures, your premiums will increase; usually, after five years, the cost of a claims-made policy begins to even out with occurrence policies.
What is an example of occurrence insurance?
Occurrence policies cater specifically to events that may cause injury of damage years after they occur. For example, if an individual is exposed to hazardous chemicals, a significant amount of time could pass before they fall ill. Occurrence coverage will usually cover the employer and the former employee for life.
Can you go from claims made to occurrence?
Keep in mind that as soon as you buy a Claims-Made insurance policy the clock starts ticking for that tail insurance. If you only carry the Claims-Made policy for 1 year and then want to switch to Occurrence, you can do so – but you have to buy tail for that 1 year that you carried the Claims-Made policy.
The difference between claims-made and occurrence-based insurance policies
How long do claims stay on your record?
In California, accidents typically stay on your driving record for a period of three years from the date of the accident. During this time, the accident will be considered a public record and, therefore, accessible by insurance companies, potential employers, and law enforcement agencies.
How do I know if my insurance is claims-made or occurrence?
A claims-made policy only covers those that occur and are reported within the policy's timeframe, unless tail coverage is also purchased. An occurrence policy provides lifetime coverage for incidents that take place during a policy period, regardless of when the claim is reported.
What counts as an occurrence?
An occurrence is an unscheduled absence or late arrival (Not protected by FMLA, WC, etc.). For example, arriving 30 minutes late would count as an occurrence and calling in to use sick leave, vacation, or comp time for a day would be an occurrence.
Are auto insurance claims made or occurrences?
Virtually all homeowner's coverages and automobile coverages are “occurrence policies.” With this type of coverage, the occurrence (negligent act and accident) must occur within the policy coverage period or term of the policy.
What is an example of a chance occurrence accident?
There are three basic causes of workplace accidents: chance occurrences, unsafe conditions, and employees' unsafe acts. Chance occurrences (such as walking past a tree just when a branch falls) are more or less beyond management's control. We will therefore focus on unsafe conditions and unsafe acts.
How many claims is too many?
Officially, there is no set limit to the number of claims you can file. However, it's important to understand that frequent claims can have long-term effects on your policy. Insurers may view a history of multiple claims as an increased risk, which can influence your policy renewal and premium rates.
What does $2 million aggregate mean?
The big bucket represents your general aggregate limit, which is the maximum the insurance company will pay, regardless of claim quantity. The big bucket can fit up to $2 million worth of liability, regardless of the number of claims. As a liability claim happens, it will begin to fill up a small bucket.
Does Next Insurance pay claims?
Filing a claim with NEXT insurance can be quick and easy. Once you've gathered all the available information, you just need to enter it online to open your claim. Your dedicated claims advocate will then contact you within one business day after you report your claim.
Is per occurrence the same as per claim?
The main differences between per-occurrence and per-claim policies are when they provide coverage, and the price.
Can I file a claim after my insurance expires?
In other words, the claim needs to be filed while you are actively covered. If you have cancelled your insurance or allowed the policy to lapse you will be uninsured and unable to claim. A retroactive claim for a loss can only be raised in a situation where the cover has been ongoing during that period.
What are the two types of claims forms?
The two most common claim forms are the CMS-1500 and the UB-04. These two forms look and operate similarly, but they are not interchangeable. The UB-04 is based on the CMS-1500, but is actually a variation on it—it's also known as the CMS-1450 form.
Which is better claims-made or occurrence based?
A claims-made policy only covers incidents that happen and are reported within the policy's timeframe, unless a "tail" is purchased. An occurrence policy has lifetime coverage for the incidents that occur during a policy period, regardless of when the claim is reported.
What is the first thing an insurer must investigate before taking on a claim?
Insurance companies must search for and consider evidence that supports coverage for the claim. Thus, insurance companies cannot close their eyes to evidence that supports coverage and focus solely on the evidence that denies coverage. Too narrow a focus of investigation?
Do insurance companies like claims?
Insurance companies want to avoid paying out large claims, even if they are valid. To protect their profits, insurance companies may engage in and effort to delay the settlement, deny a legitimate claim, or decrease the compensation they offer in hopes that accident victims will accept a lower offer.
What is an example of occurrence?
Street-fights are an everyday occurrence in this area of the city. Death was an everyday occurrence during the Civil War. It's still not possible to accurately predict the occurrence of earthquakes. There have been several occurrences of theft in the area recently.
What is an example of an occurrence in insurance?
Any accident or incident that can harm a person or their property may count as an occurrence. If a third party trips over a toolbox left sitting at your building site and injures themself, that's an occurrence. However, if the damage or injury is caused on purpose, your liability insurance won't cover you.
What is considered a regular occurrence?
Regular events have equal amounts of time between them, so that they happen, for example, at the same time each day or each week.
What is the difference between an accident and an occurrence in insurance?
The term "occurrence" encompasses more than just an accident because accident is narrower in scope than occurrence. This can be seen in those cases decided before the occurrence wording was adopted. Accident, according to these cases, did not include coverage for damage occurring over time.
What is the difference between claims made and claims made and reported?
Under a claims-made policy, a claim must be made during the policy period in order for there to be coverage. Under a claims-made and reported policy, both a claim must be made and that claim must also be reported during the policy period. A grace period may apply for claims made late in a policy period.
How long does tail coverage last?
How Long Should Tail Coverage Last? If you get tail coverage, it can last a year or more. You can work with your insurance agent or insurer to see how long of an extended reporting period is right for your business. The longer your tail coverage, the longer your protection can last.