Field Guide to Gnarly Claims

Clear, opinionated answers to the terms shaping claims and insurance.

Definitions

Plain-language answers to the claims and insurance terms we work with every day.

A

  • Adjuster copilot

    An adjuster copilot is AI that works alongside claims adjusters on open files. It reads the claim file, flags risks and deadlines, and recommends next steps with its reasoning. The adjuster keeps authority over every decision.

  • AI claims audit

    An AI claims audit uses AI to review claim files for handling quality, including coverage and liability decisions, reserving, timeliness, and recovery. It can review every file in a book, where a manual audit samples about 2%, and human auditors check its findings.

C

  • Claim reserving

    Claim reserving is the process of estimating what an insurer will pay on a claim, including loss and defense expense, and recording that estimate as a reserve. Adjusters set a case reserve when a claim opens and update it as the facts change.

  • Claims audit software

    Claims audit software helps carriers, MGAs, TPAs, and self-insured organizations review claim files for handling quality and compliance. It manages audit criteria, records findings, and reports results; AI-based tools also read the files and draft the findings.

  • Claims automation

    Claims automation is the use of software, rules, and AI to carry out claims steps without manual work, such as intake, document reading, triage, and payment. Simple claims can run straight through. Complex claims still need an adjuster for coverage, liability, and settlement calls.

  • Claims leakage

    Claims leakage is money lost on covered claims through handling failures: the gap between what an insurer pays, including loss adjustment expense (LAE), and what it would have paid if each claim had been handled to its own guidelines.

  • Claims quality review

    A claims quality review, also called claims QA or claims quality assurance, is an internal check of claim files against best practices and the organization's own handling guidelines. Reviewers score each file on coverage, contact, investigation, reserving, documentation, payment, and closure.

F

  • FNOL (first notice of loss)

    First notice of loss (FNOL) is the first report of a loss to an insurer or its claims administrator. It opens the claim and records who was involved, what happened, when, and where. The details captured at FNOL set up the coverage check, the first reserve, and the investigation.

I

  • Insurance claims lifecycle

    The claims lifecycle is the path a claim follows from first notice of loss to closure: intake, coverage review, investigation, evaluation and reserving, settlement, payment, and closure. Recovery can follow payment, and a closed claim can reopen if new information arrives.

P

  • P&C TPA (third-party claims administrator)

    A P&C TPA, or third-party claims administrator, handles property and casualty claims for a carrier, MGA, or self-insured organization, from first notice of loss to resolution, under the client's guidelines and authority.

S

  • Subrogation (and waiver of subrogation)

    Subrogation is an insurer's right, after paying a claim, to recover that payment from the third party responsible for the loss. A waiver of subrogation is a contract term or policy endorsement that gives up that right against a named party.

T

  • TPA audit

    A TPA audit reviews how a third-party administrator handles claims for a carrier, MGA, or self-insured organization. It checks claim files against the client's guidelines, authority levels, and best practices, and it supplies the evidence for TPA oversight.

  • TPA in insurance (third-party administrator)

    A TPA, or third-party administrator, is a company that handles insurance administration for another organization under contract. A claims TPA investigates, adjusts, and pays claims for a carrier, MGA, or self-insured employer within the client's authority. The client keeps the insurance risk.

W

  • Workers' compensation TPA (claims administration)

    A workers' compensation TPA is a third-party administrator that handles workers' comp claims for an employer, an insurer, or a self-insured group. It administers medical and wage-replacement benefits under state law, files the required reports, and manages return to work and recovery.