# Insurance Claims & Entitlements

In the decentralized financial landscape, the handling of claims is a critical element that speaks to the credibility and reliability of any insurance protocol. The Lucia Protocol aims to offer a robust, transparent, and user-centric Claims and Entitlement Process. This section delineates the various steps, options, and guidelines involved in filing and resolving a claim within the Lucia Protocol's Credit Default Insurance (CDI) framework. From initial filing to final resolution, the protocol integrates community voting and expert oversight to ensure an efficient, fair, and secure claims process.\\

<figure><img src="https://lh5.googleusercontent.com/XuRaQs4EtABywa7VEAg4E_I0Cos4n7lWqxiDvWQddyjXPZ8flyrGDts_kJq1NGoiXDnRIqGQRCAD3JC1ehZr1sZDqHVEf8FNpuMtGs1iz6zaoyLBB6mjF18xlHtd_wCnygnsvpSzRJBFVzx9lKmRZZs" alt=""><figcaption><p>Figure 3</p></figcaption></figure>

**Filing a Claim**

Upon the occurrence of an event triggering a claim, the affected party initiates the process as outlined in Figure 2. To curb malicious activities like spam or false claims, the Lucia Protocol requires a claim filing fee. This fee is refunded upon successful adjudication and is calculated as a percentage of the claim amount and is also contingent on the chosen valuation method.

**Decision Pathways**

Claimants have two options for the resolution process:

1. Community Voting (Low Fee): The claim is submitted to the insurance pool participants for community voting. If a 75% consensus is reached in favor, the payout is processed.
2. Emergency Board (High Fee): Bypassing community voting, claimants can opt to escalate the case directly to the emergency board.

**Payment Mechanism**

If approved, claimants receive their awarded sum directly from the insurance pool into their digital wallet. If a claim fails to garner a 75% approval via community voting (Option 1), the claimant can escalate to the emergency board. The board's decision is final, and in cases of uncertainty, external IT-audit experts may be consulted for independent analysis.

**High-Value Claims and Security Safeguards**

Claims exceeding the insurance pool's total value are automatically routed to the emergency board to prevent the possibility of fraudulent collusion within the pool.

**Guidelines and Exclusions**

* **Reporting Deadline:** A 7-day window is provided to report the incident, ensuring ample time for the affected parties.
* **Coverage Scope:** Covered events include credit defaults, hacks, coding errors, and manipulations that result in capital loss.
* **Exclusions:** Losses stemming from the mismanagement of private keys are not covered. Claimants must prove ownership of the corresponding wallet by signing a transaction with a specific code.
* **Fraud Prevention:** Lucia Protocol's attribution and reputation system is integrated to deter fraudulent activities. The blockchain's inherent transparency further aids in the easy identification of such activities.
