What is a "loss experience" report?

A "loss experience" report is a document that provides a comprehensive overview of an insured's claims history. This report is crucial for insurers as it details all the claims made by the insured, along with pertinent information such as dates, amounts, and types of claims. Insurance companies use this information to assess risk and calculate premiums accurately.

By analyzing the loss experience report, insurers can determine how frequently the insured has filed claims and the overall financial impact of those claims on the insurer. This historical data helps to predict future risk and guides the underwriter in deciding the appropriate premium to charge. Thus, it directly influences the cost of insuring the driver or the vehicle.

The other options do not accurately reflect the specific purpose of a loss experience report. For example, while average claims settlements might provide insight into general trends in claim payouts, it does not focus on an individual insured's history. A summary of coverage limits and exclusions relates to the terms of the policy rather than the insured's claim background. Similarly, market trends for insurance rates will reflect broader patterns across multiple insureds instead of focusing on a single individual's claims history.