> ## Documentation Index
> Fetch the complete documentation index at: https://docs.justly.one/llms.txt
> Use this file to discover all available pages before exploring further.

# Micro-insurance and Micro-claims

> small financial losses, short term risks, high frequency events, users with limited access to traditional insurance.

<Note>
  Status: Planned (*Enabled through adversarial disputes with predefined rulesets*)
</Note>

#### The core problem with micro-insurance

Micro-insurance is designed to cover:

* small financial losses,
* short-term risks,
* high-frequency events,
* users with limited access to traditional insurance.

But there’s a paradox:

> The smaller the claim, the harder it is to resolve fairly.

Why?

* Traditional claim reviews are expensive.
* Human adjusters don’t scale for $20–$300 claims.
* Automation alone can’t handle edge cases.
* Users feel ignored or unfairly rejected.

As a result, many micro-insurance systems either:

* auto-approve everything (risking abuse), or
* auto-reject everything unclear (destroying trust).

***

#### Real-world micro-claim scenarios

These cases happen every day:

* Flight delay insurance with disputed delay times.
* Delivery insurance for lost or damaged packages.
* Weather-based insurance with unclear local impact.
* Device insurance with ambiguous damage causes.
* Gig-economy insurance for short jobs or shifts.
* Parametric insurance where conditions partially trigger.

Each claim is small —\
but **the trust impact is huge**.

***

#### Why traditional insurance logic breaks down

For micro-claims:

* Manual review costs more than the payout.
* Centralized decisions feel opaque.
* Appeals are slow or non-existent.
* Users assume bias toward the insurer.

This creates a toxic loop:

* Low trust → high churn
* High churn → stricter automation
* Stricter automation → more rejected claims

***

#### The missing layer: scalable, neutral judgment

Micro-insurance doesn’t need **perfect accuracy**.\
It needs **fair, explainable decisions at low cost**.

Justly introduces a middle layer between:

* fully automated payouts, and
* expensive human adjusters.

A layer where:

* disputes are rare but resolvable,
* decisions are transparent,
* costs stay proportional to claim size.

***

#### How Justly fits into micro-insurance systems

Justly acts as an **on-demand dispute resolver**.

Typical flow:

1. A claim is submitted.
2. The system auto-processes it.
3. If the claim is disputed, it is escalated to Justly.
4. Evidence is submitted (photos, receipts, timestamps, sensor data).
5. Independent jurors review the case.
6. A ruling is issued.
7. The payout contract executes the decision automatically.

No claims agents.\
No back-and-forth emails.\
No black-box decisions.

***

#### Example: delivery micro-insurance

* A user insures a package for \$50.
* The package arrives damaged.
* The insurer’s system flags the claim as “unclear”.

Instead of rejecting it:

* The dispute is sent to Justly.
* The user submits photos and delivery timestamps.
* Jurors evaluate whether the damage matches transit issues.
* The ruling:
  * approves full payout,
  * approves partial payout,
  * or rejects the claim with justification.

The result is enforced automatically.

***

#### Example: parametric weather insurance

* A farmer has micro-insurance for rainfall.
* Sensors report borderline data.
* The claim is disputed due to conflicting sources.

Justly allows:

* evidence from multiple oracles,
* local context evaluation,
* human interpretation where automation fails.

This avoids:

* blind oracle dependence,
* rigid yes/no logic.

***

#### Why this matters for insurers and protocols

**For insurers**

* Lower operational costs.
* Reduced fraud without blanket rejections.
* Higher user trust and retention.

**For users**

* A real chance to contest unfair outcomes.
* Transparent decisions.
* Faster resolutions.

**For on-chain insurance protocols**

* Removes reliance on admin intervention.
* Enforces rulings trustlessly.
* Keeps systems decentralized under stress.

***

#### Micro-claims need proportional justice

Big insurance can afford:

* lawyers,
* adjusters,
* long processes.

Micro-insurance can’t.

Justly enables:

* **low-cost justice for low-value claims**,
* without sacrificing fairness or decentralization.

***

#### The takeaway

Micro-insurance fails when disputes are ignored.\
It scales when disputes are **cheap, fair, and enforceable**.

Justly makes micro-claims:

* economically viable,
* socially fair,
* technically enforceable.

***

*Micro-claims are typically resolved using **Tier 1**, enabling fast and cost-effective evaluations that would be impractical in traditional insurance systems.*

See [Dispute tiers](/how-it-works/tiers/dispute-tiers).