Importance Of Accurate Reserves

When a loss occurs an adjuster is usually required to provide the Insurer with a reserve sufficient to reflect the Insurer’s potential liability under the policy.

It is important for these estimates to be as accurate as possible because: -

• They allow the Insurer to allocate funds for the payment of the claim.
• An understated estimate can lead to unnecessary justification as to why the claim exceeds the reserve.
• An overstated estimate can have an unrealistic impact on insurance renewals and premiums that may fall due during the course of a claim.

While it needs to be as accurate as possible it is important to remember that an estimate is just that and attention needs to be focused on the actual costs i.e. the claim.

Author

Published with permission of Claim Solutions Pty Ltd 

Insurance Policy

Policy Description: - Various

Insurer: - Various

External Links