What constitutes a claim being labeled as "disputed"?

A claim is labeled as "disputed" when there is a difference in understandings between the insurer and the insured regarding the claim. This disagreement can stem from various factors, such as differing interpretations of policy terms, the extent of damages, or the adequacy of the compensation provided. The key aspect of a disputed claim is the lack of consensus between the involved parties, which often requires negotiation or further investigation to resolve the differences and come to an agreement.

In scenarios where both parties agree on the compensation amount, a dispute does not exist. Similarly, when an adjuster identifies a claim as fraudulent, the nature of the disagreement changes significantly, often leading to denial of the claim rather than a negotiation process. Lastly, once a claim has been paid and closed, there are no ongoing disagreements, thereby eliminating the possibility of it being termed as "disputed." Hence, the condition that defines a claim as disputed is the differentiation in perspectives on the claim between the insurer and insured.