LAE stands for Loss Adjustment Expense. Which item is included in LAE?

LAE stands for Loss Adjustment Expense. Which item is included in LAE?

• A. Total incurred amount of claims.
• B. Paid portion of claims.
• C. Cost to investigate, defend, and settle claims.
• D. Total amount of loss reserves.

Answer: (C)

Loss Adjustment Expense covers the costs tied to handling a claim. This includes activities such as investigating the loss, hiring experts, defending the claim in court, and settling the claim. These costs are about processing the claim, not the actual payout or the reserves set aside for future payments. So, the item included is the cost to investigate, defend, and settle claims.

Loss Adjustment Expense covers the costs tied to handling a claim. This includes activities such as investigating the loss, hiring experts, defending the claim in court, and settling the claim. These costs are about processing the claim, not the actual payout or the reserves set aside for future payments. So, the item included is the cost to investigate, defend, and settle claims.