Why is thorough documentation vital in insurance claims?

Thorough documentation is vital in insurance claims because it provides evidence for decision-making and dispute resolution. Comprehensive documentation establishes a clear and accurate account of the claim details, including what has occurred, the damages involved, and the actions taken by both the insured and the insurer. This evidence is essential for adjusting claims fairly and equitably, as it allows all parties to reference the same information when addressing potential disputes or clarifications. By having a well-documented record, insurance companies can make informed decisions regarding claim approvals, denials, and settlements, ultimately leading to a more efficient claims process and reduced risk of litigation.