There are situations where a policyholder experiences a loss but forgets to or intentionally chooses to not report it. This is what the insurance industry calls an unreported claim.
Definition of Unreported Claim
Unreported claims refer to insurance claims where the losses have been incurred but have not been filed or reported to the insurance company.
Where is an unreported claim often experienced? The liability, health, and life insurance industries are the most common areas you will hear about unreported claims.
How do insurance companies respond to unreported claims? When unreported claims are finally filed, insurance companies set up a reserve, known as incurred but not reported (IBNR) funds.
What leads to unreported claims? Delayed reporting can be a result of bureaucratic red tape and processing lag.
What is a Comprehensive Loss Underwriting Exchange (CLUE)?
Comprehensive Loss Underwriting Exchange (CLUE) is a data collection service provider that gathers all the claims history of a given home or property.
The CLUE report helps insurance companies to know the number of claims that have been made against the vehicle or home in question. Such information helps insurance providers to know how best to calculate the monthly insurance premium. It doesn’t matter who filed the claims.
How Does Claims History Affect the Monthly Insurance Premium?
Statistics have shown that a history of previous claims will likely result in more claims in the future. If that be the case, it is normal for the insurer to charge you a higher monthly insurance premium. The extent to which this premium will increase depends on the insurance company you decide to work with.
If you’ve had multiple claims in the past, there’s still something you can do to get an affordable insurance quote. In our previous article, we discussed how you can get an affordable life insurance policy with a spotty driving record.