Loss Run
A detailed report that summarizes an insured's claim history over a specific time period, typically 3-5 years. It includes information about each claim such as dates, amounts paid, claim descriptions, and current status, and is used by insurers to evaluate risk when pricing coverage.
Example
“Before switching insurance companies, Jennifer requested a loss run from her current insurer to show her clean five-year claims history to help secure better rates with the new carrier.”
Memory Tip
Loss Run = 'List Of Sad Situations - Record of Unfortunate Numbers' - a running list of all your insurance losses.
Why It Matters
Your loss run directly affects your insurance rates and eligibility for coverage. A clean loss run can help you secure lower premiums, while frequent claims can lead to higher rates or coverage denial, making it crucial to understand and manage your claims history.
Common Misconception
Many people believe that small claims don't matter or won't show up on loss runs. In reality, most claims regardless of size are reported and can impact your risk profile, which is why it's sometimes better to pay small losses out of pocket rather than filing claims.
In Practice
ABC Company's 5-year loss run showed 12 workers' compensation claims totaling $180,000, including three $50,000 back injuries and nine minor claims averaging $3,000 each. This loss history resulted in a 1.4 experience modification factor, increasing their $100,000 annual premium to $140,000. By implementing safety programs and having no claims for two years, they reduced their modifier to 0.9, saving $10,000 annually.
Etymology
Combines 'loss' from Old English 'los' with 'run,' meaning a continuous series or sequence, referring to the chronological listing of claim events.
Common Misspellings
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Related Terms
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