What Is a Letter of Experience for Insurance?
Demystify the insurance Letter of Experience. Discover how this essential document verifies your past coverage, impacting future rates & policy eligibility.
A Letter of Experience (LOE) is an official document issued by an insurance provider. It serves as a formal verification of an individual’s or entity’s past insurance coverage and claims history. Its function is to provide a concise, factual record of an insured’s relationship with a previous or current carrier.
Purpose of a Letter of Experience
A Letter of Experience provides concrete evidence of an individual’s or business’s insurance history to a new or prospective insurer. This helps insurers evaluate risk more accurately when underwriting new policies. By reviewing past coverage details and claims activity, an insurer can better assess the likelihood of future claims.
The information within an LOE allows insurers to determine appropriate premium rates. For example, a consistent record of no claims on an auto insurance policy can qualify a driver for a “no-claims discount,” reducing their annual premium. Similarly, a business with a clean claims history for general liability insurance may receive more favorable rates. The LOE provides the factual basis for these financial considerations and discounts.
Key Information in a Letter of Experience
A Letter of Experience includes details for evaluating an insured’s history. This includes the policyholder’s full name or entity’s legal name, contact information, and the type of insurance covered, such as auto, homeowners, or commercial general liability.
The document states the policy’s effective and expiration dates, indicating the period of coverage. It also includes a summary of claims filed during the policy period, detailing the date of each claim, the incident type (e.g., collision, fire, theft), and the amount paid out. For auto policies, the LOE may indicate if the policyholder was at fault for accidents, which impacts future premium calculations.
How to Request a Letter of Experience
Obtaining a Letter of Experience from a current or previous insurance provider is a simple process. Policyholders can request this document by contacting their insurer’s customer service department. Methods include a phone call, email, or online portal.
When requesting, the policyholder needs to provide identification details to locate policy records. This includes their full name, policy number, date of birth, or address. Insurers process requests within a few business days. The completed Letter of Experience is delivered via email or postal mail.