Claims And Loss Control
What Does Claims And Loss Control Mean?
Claims and loss control is a strategy used by insurers to reduce the risk of policyholders filing claims, which can increase the company’s losses. Insurers may require or recommend that policyholders engage in certain activities or take specific actions to manage their risk of loss. They often offer incentives to encourage policyholders to follow through on these measures. This approach allows policyholders to benefit by reducing their risk of incurring a loss while receiving additional rewards from the insurer. Meanwhile, the insurer benefits by lowering the likelihood of claims being filed and having to pay out benefits.
Insuranceopedia Explains Claims And Loss Control
Depending on the type of insurance, an insurer may employ different claims and loss control strategies. For instance, a health insurer might slightly reduce a premium if a policyholder joins a gym, as the insurer views gym membership as a factor likely to improve the policyholder’s health. Improved health reduces the likelihood of claims being filed due to fewer health issues. The fewer the claims, the higher the insurer’s profits. Thus, insurers can significantly benefit from implementing claims and loss control strategies, even when offering monetary incentives to policyholders.
