How are individual case reserves established?

Individual case reserves are established primarily by the judgment and experience of the claim adjuster. This process involves a thorough evaluation of the specifics of each case, including the nature and severity of the injury, the potential for future medical costs, lost wages, and any other related liabilities. The adjuster takes into account past experiences with similar cases, legal considerations, and the unique circumstances surrounding the current claim.

This method allows for a more tailored approach to reserving, as it considers the nuances of each case rather than relying on a one-size-fits-all formula or standard. Adjusters' insights and expertise play a critical role in ensuring that reserves accurately reflect the anticipated costs, which is essential for the financial health of the insurance company and the fair handling of claims.