Unlock Secret Savings with Letter of Experience Insurance – Find Out How

by Eduyush Team

 Letter of experience insurance

Navigating the complexities of insurance can be daunting, especially when proving your credibility and claims history to a new insurer. One crucial document in this process is the "Letter of Experience in Insurance." This letter proves your insurance coverage and claims history, which is significant in the insurance underwriting process and premium calculation.

What is a Letter of Experience in Insurance?

A Letter of Experience in Insurance is an official document provided by your previous insurer that outlines your insurance claim history and policyholder's insurance record. This document is instrumental in verifying your insurance coverage, assessing your risk level, and determining your eligibility for insurance renewal or new insurance policies.

Why is a Letter of Experience Important?

what is a letter of experience for insurance

  1. Proof of Claims History: An LOE serves as an objective record of claims (or the lack thereof), which can be crucial for securing favourable terms on new insurance policies.
  2. Facilitates Smooth Insurance Transition: When switching providers, an LOE can help ensure that your new insurer understands your insurance background, potentially leading to better rates.
  3. Verification of Insurance Status: For businesses, an LOE can prove invaluable in contract negotiations, serving as evidence of continuous insurance coverage without significant claims.

When Do You Need a Letter of Experience?

  • Switching Insurance Providers: To obtain better rates or coverage terms based on a positive insurance history.
  • Applying for New Coverage: Demonstrating a clean or claim-free history can be advantageous in securing new insurance policies.
  • Contractual Requirements: Certain contracts may require proof of insurance history as part of the negotiation process.

What are the Benefits of a LOE

1. Tailoring Premiums with Advanced Methods:
Research by Shi and Yang (2018) shows that using sophisticated models, insurance companies can adjust your premiums based on your past claim history in a more detailed way. This method helps insurers predict risks better and decide which customers might be more profitable.

2. Learning from History:
Experience rating isn't new. For example, a method used in Switzerland in 1963 changed car insurance premiums based on a driver's claim history (Bühlmann, 1967). This approach is based on a simple idea: your insurance costs should reflect your personal risk, as shown by your past insurance claims.

3. Making Smarter Insurance Choices:
Jammernegg & Kischka (1994) explored how experience rating affects decisions like whether to buy insurance, make a claim, or cancel a policy. It shows that experience rating doesn't just change premiums; it also influences how people interact with their insurance policies.

4. Encouraging Prevention in Disability Insurance:
A study on the Dutch disability insurance by Koning (2009) found that experience rating can lead to fewer disability claims. By making employers partly responsible for disability insurance costs, it encourages them to invest more in preventing workplace injuries.

5. Addressing Moral Hazard:
Abbring, Chiappori, & Pinquet (2003) examined how experience rating helps distinguish between genuine claims and those influenced by the insured's behavior to benefit from insurance payouts (moral hazard). The study highlights how adjusting premiums based on past claims can help reduce fraudulent claims and encourage responsible behavior.

How do you request a letter of experience?

Contact your previous insurance provider and request the letter. Provide necessary details, such as your policy number and the coverage period. Most insurers can provide this documentation upon request. Here is the step-by-step process.

  1. Prepare Your Information: Prepare your policy number(s), coverage dates, and personal details.
  2. Contact Your Insurer: Use phone, email, an online portal, or visit in person to request the letter.
  3. Specify Your Request: Clearly state you need a "Letter of Experience" and outline any specific information required.
  4. Delivery Method: Choose how you'd like to receive the letter (email or postal mail) and provide the correct address or email.
  5. Follow-up: If the letter doesn't arrive within the expected timeframe, follow up with your insurance company.
  6. Review: Check the letter for accuracy upon receipt. If there are issues, contact your insurer for a correction.

Additional Tips:

  • Request the letter well in advance.
  • Keep a copy of your request and any related communications.

Sample Formats for Letter of experience insurance

Sample 1: Auto Insurance Letter of Experience

[Insurance Company Letterhead]

Date: [Insert Date]

To Whom It May Concern,

This letter certifies that [Policyholder's Name] was insured with [Insurance Company Name] under policy number [Policy Number] from [Start Date] to [End Date]. During this period, the policyholder held auto insurance coverage with the following details:

  • Coverage Type: Comprehensive/Collision
  • Vehicle: [Make, Model, Year]
  • Claims History: No claims filed/Claims filed (details if any)

This letter is issued upon the policyholder's request for insurance verification purposes.



Sample 2: Home Insurance Letter of Experience

[Insurance Company Letterhead]

Date: [Insert Date]

To Whom It May Concern,

We, at this moment, confirm that [Policyholder's Name], residing at [Policyholder's Address], was a valued client of [Insurance Company Name] from [Start Date] to [End Date]. The policyholder maintained a home insurance policy with us, which included [list coverage types, e.g., property damage, liability coverage].

During the tenure of the policy:

  • Claims History: No claims were made/Details of claims made
  • Policy Number: [Policy Number]

This document is provided at the policyholder's request for insurance eligibility verification.



Sample 3: General Insurance Letter of Experience

[Insurance Company Letterhead]

Date: [Insert Date]

To Whom It May Concern,

This is to certify that [Policyholder's Name] was covered under [Type of Insurance, e.g., Health, Life, Property] insurance with [Insurance Company Name], policy number [Policy Number], from [Start Date] to [End Date].

Insurance Coverage Details:

  • Coverage Summary: [Brief description of what was covered]
  • Claims History Summary: [No claims made/Specific claims made with brief details]

Please consider this letter a testament to the policyholder's insurance background and claims experience.

For any further information, feel free to contact us.



Master Insurance claim formats with 4 samples

Closing comments

A Letter of Experience in Insurance is an invaluable asset when establishing your history as a responsible and reliable insured individual. It facilitates smoother transitions between insurers and helps secure favourable terms and premiums based on your documented history. Ensure you request this letter when switching providers or seeking new coverage to leverage your positive insurance record.

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LOE Questions? Answers.

Ideally, request the letter at least 2-4 weeks before you need it. This timeframe allows for processing, delivery, and any potential follow-ups if corrections are needed.

Yes, you can request a Letter of Experience for any type of insurance policy. However, the information provided may vary depending on the policy type and the insurer's practices.

First, verify if the fee is standard practice by checking the insurer's policy or contacting customer service. If a fee is unavoidable, consider if the letter's necessity justifies the cost.

In most cases, yes. However, confirm with the requesting party (e.g., new insurance company) if a digital copy meets their requirements, as some may prefer or require a physical document.

If your insurer is unresponsive or refuses, document your attempts to contact them. You may need to escalate the issue within the company. If problems persist, consider seeking advice from a legal professional or contacting your local insurance regulatory authority for assistance.

Correction times can vary; however, after reporting the error, it's reasonable to expect a corrected version within 1-2 weeks. Communicate the urgency if you're facing deadlines.

Yes, you can request a Letter of Experience for a policy that was canceled or not renewed. The letter will still provide a record of your coverage and any claims made during the policy period.

  • Contact the acquiring company's customer service. They should have access to the records of the acquired company and be able to issue a Letter of Experience.