Definition - What does Claim Expense mean?
Claim expense pertains to the costs, except the actual claim cost, that are incurred in relation to the payment of a claim to insurance. The costs are associated in handling and adjusting claims.
Claim expense is also known as claim preparation expense or adjustment expense.
Insuranceopedia explains Claim Expense
Claim expense includes but is not limited to costs in the preparation of a claim, its presentation, and negotiation to the insurance. Usually, there is a long claim process before a policyholder receives payment from an insurance policy. Various professionals, such as consultants, accountants, lawyers, investigators, and others are involved in the claim process. Fees and expenses of employing said professionals form part of the claim expense.
A claim expense may either be allocated or unallocated. If the costs can be charged against a specific claim, then it is called an allocated claim expense. On the other hand, unallocated claim expenses are those that cannot be charged to a specific claim