What is the purpose of "proof of loss" in claims processing?

The purpose of "proof of loss" in claims processing is to substantiate a claim for benefits. This document serves as a formal statement from the claimant, detailing the circumstances of the loss, the items or services claimed, and the amount being requested from the insurance company. It is a critical component in the claims process because it provides the necessary evidence that supports the claimant’s assertion of a loss and outlines the basis for seeking compensation. Insurance companies rely on this documentation to review the validity of a claim and to determine the appropriate payout. This ensures that claims are handled efficiently and according to the terms of the insurance policy.