What is the definition of Loss Adjustment Expenses?

Loss Adjustment Expenses refer to the expenses insurance companies have in the process of verifying the veracity of a claim, as well as paying for it.

The insurance company may have to hire a claims adjuster to protect it from false claims and to appraise the accurate value of the claims to be paid. There may also be associated costs related to filing police reports, defending the company against a lawsuit, as well as in administering the claim.

The loss adjustment expenses will vary widely, depending on the type of claim, as well as the size of the claim. The claims expenses also have an allocation for overhead and office expenses such as the salaries of the employees, materials used and so on.

• Insolvency
• Misstatement of Age or Sex Provision
• Modified Premium Policies
• Moral Hazard
• Comprehensive Coverage