Also known as: claim audit · claims audit · claims file review
A claims audit is a structured review of claim files to confirm they were handled, reserved, and paid correctly.
A claims audit examines a sample of open and closed claim files to verify that the insurer or third-party administrator followed proper procedures, set accurate reserves, and paid the right amounts. It can be run by the carrier's internal team, by your broker on your behalf, or by an outside auditor, and it is common on self-insured retentions and larger programs. For a growing company, an audit of open-claim reserves matters because inflated reserves inflate your loss ratio, which can push up your renewal premium.
A claim audit, also called a claims audit, is a formal review of a sample of claim files to check that they were investigated, reserved, and paid according to the policy and good claims practice. It can be performed by the carrier, a third-party administrator, your broker, or an independent auditor. The goal is to catch errors, confirm reserves are accurate, and make sure your claims data is not unfairly inflating your loss ratio.
Because the reserves and payments recorded on your claims directly affect your loss ratio, which underwriters use to price your renewal. A claims audit can surface over-reserved or improperly handled files so your broker can push for corrections before they raise your premium. On programs with a self-insured retention, audits also confirm your third-party administrator is doing the work you are paying for.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.
Last updated: July 2026.