What is meant by "claims litigation"?

Claims litigation refers specifically to the legal proceedings that arise when disputes related to insurance claims cannot be resolved through negotiation or informal process. This often involves taking the case to court or using arbitration to achieve a resolution. The need for claims litigation generally reflects a breakdown in the normal claims handling process, where the insurer and the policyholder disagree about the claim's validity, the extent of coverage, or the amount of compensation owed.

In this context, litigation serves as a formal avenue to address grievances over claims, ensuring that both parties can present evidence and arguments in a legally structured manner. This process can be crucial for policyholders seeking to enforce their rights under their insurance policy when informal attempts to resolve the dispute have been unsuccessful.

The other options relate to different aspects of the claims process but do not embody the legal adversarial nature captured by claims litigation. For instance, the filing of a claim is merely the initiation of the process, while negotiation refers to discussions aimed at reaching an agreement. The assessment of damages focuses on evaluating the losses sustained, which is a preliminary step within the larger context of claims management and does not imply legal proceedings.