What is typically required before an insurance policy begins to cover a claim?

Payment of the deductible amount is a common requirement before an insurance policy begins to cover a claim. The deductible is the specific amount of money that the policyholder agrees to pay out of pocket before the insurance company starts to pay for covered expenses. This arrangement serves several purposes, such as sharing the risk between the insurer and the insured and helping to reduce the number of small claims being filed.

By requiring a deductible, insurers encourage policyholders to take some financial responsibility for their claims, which can also help keep overall insurance costs lower for everyone. Therefore, once the insured pays the deductible, the coverage provided by the policy activates and the insurer begins to pay for the remaining eligible expenses according to the details of the policy.

The other options do not directly relate to the initiation of coverage for claims. Evidence of prior insurance doesn't typically impact the current claim process; a renewal application pertains to continuing coverage rather than activating it; and approval from the insurer's headquarters is not a standard requirement for processing claims.