What is a Letter of Experience (For Insurance)?
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A Letter of Experience can play a crucial role in the insurance process. A Letter of Experience, also known as a Letter of Claims Experience, may be required to prove your insurance history.
If you are looking for a new insurance policy, or if you have moved to a new country, then your insurer may require a Letter of Experience. Your new insurer will receive a verified record of your insurable history from your old insurer.
A Letter of Claims Experience is one of many factors an insurance company may use to calculate your insurance premiums.
What is an Experience Letter?
An Experience Letter, also known as a Letter of Experience or Letter of Claims Experience, is a verified record of your insured history.
A new insurance company may require you to provide a Letter of Experience. The Letter of Experience is a document written by an insurance company that has previously insured you. Your old insurance company will include all claims experience in that letter, including how long you have held insurance, what types of claims you have made under that insurance and other relevant information.
When Do I Need a Letter of Experience?
Most insurance companies in the United States do not require a Letter of Experience when moving from one domestic insurer to the other.
Insurance companies in America have common databases (like CLUE) that collect all insurance information in one convenient location. CLUE tracks information between drivers and vehicles, making it easy for insurers to check your driving record and accident history, among other things.
However, if you have recently moved to a country, or if your new insurance company needs clarification on your insurance history, then you may need to provide a Letter of Experience.
The Letter of Experience is a way for your former insurance company to vouch for you. Essentially, the Letter of Experience is a way of transferring your verified insurance history between insurers.
You may also need a Letter of Experience if you are trying to qualify for a specific discount – like a safe driving discount. The insurance company wants to verify you have never had an accident, and they require you to provide a Letter of Experience to verify that safe driving history.
What Information is Included in a Letter of Experience?
A Letter of Experience lists all relevant information about the driver and that person’s insurance history. Some of the information that is typically included in a Letter of Experience includes:
Details of what the policyholder insured. If you insured a car and a home with the insurer, for example, then the letter may state the address of your home you insured along with your vehicle’s serial number.
The name of the insured individual and any others on the policy. If you bought an insurance policy that covered your wife and children, for example, and a policy that covered a vehicle you do not own, then the Letter of Experience may list the names of all insured individuals covered by the policy.
The timeline of your insurance, including the dates on which you initiated and ended the policy.
Any claims paid by the insurance company during the timeline of your insurance, including the reason for the claim, the total value of the claim, and whether the claim was accepted, denied, or withdrawn.
Whether or not you have a clean, claims-free history. The Letter of Experience may state that “there were no claims paid during this period”, for example, allowing you to qualify for a claims-free discount with your new insurer.
Claims for other drivers listed on the policy. If you had a clean driving record but your teenage son totaled a vehicle while covered under your policy, then your teenage son may be named on the Letter of Experience.
The reason why your policy ended. If your policy was canceled due to nonpayment, for example, or for any other reason, then the Letter of Experience may mention this information. If your policy was not canceled for any specific reason and you just switched insurers, then the Letter of Experience may not include this information.
Who Needs a Letter of Experience?
You may require a letter of experience in all of the following situations:
- You are moving to or from a new country
- You have not had an insurance policy for several years for any reason
- You need to prove claims on your record
- You need to prove a claims-free record to qualify for a discount with your new insurer
- You had insurance but you were not the primary insured individual on your former insured policy (say, if you were in college, married, had insurance through a roommate, or were covered by any other unique situation)
In all of these situations, your new insurance company needs to prove certain information about you, and they require a Letter of Experience as a verified track record of your insured history.
How to Request a Letter of Experience
Contact your old insurance company to request a Letter of Experience.
Even if you haven’t had insurance in several years, you should still be able to request a Letter of Experience from your old insurance company.
A Letter of Experience is a verified record of an insured individual’s history. If you have moved to a new country, or if your new insurer needs to verify certain information, then the insurer may request a Letter of Experience. You can request a Letter of Experience from your old insurer.