Loss adjustment costs are the costs of insurance companies for the investigation and settlement of insured events.
While claims costs cut into the insurance company’s bottom line, they pay them to avoid paying out fraudulent claims.
There are two types of loss adjustment costs - allocated and unallocated.
Shared costs are costs accrued during the active investigation of a complaint. Unallocated costs are costs that arise from the overhead costs associated with conducting investigations.
Some claims settlement costs can be reimbursed by insurance companies by requiring payment from the insured.
Accident insurance covers claims for injuries sustained during the term of the insurance policy, even if they are filed after the cancellation of the policy.
A co-insurance waiver clause refers to language in an insurance policy that sets out conditions under which policyholders must not pay part of a claim.
Performance Based Management (ABM) is a means of analyzing a company’s profitability by looking at every aspect of its business to determine its strengths and weaknesses.
ASO-based self-financing plans are common among large firms because they can spread the risk of costly claims over a large number of employees and dependents.
Comprehensive loss insurance is designed to protect an employer that is self-funding its employee health plan from higher-than-expected claims payments.