Overview of exposures in ClaimCenter

The following section provides an overview of exposure behavior in ClaimCenter.

What is an exposure?

An exposure is an object associated with a claim which is used to track a potential payment or a set of related potential payments. Every exposure is linked to one coverage (where the money is "coming from") and one claimant (where the money is "going to").

For example, suppose that Ray Newton has a personal auto policy. He informs the insurer that, while driving his Toyota, he hit Robert Farley's Honda and damaged both cars. Robert Farley also suffered a neck injury. The associated claim would have three exposures to track these potential payments:

Claimant Coverage
A potential payment to... Ray Newton ...from the policy's... collision coverage ...to pay for repairs to Ray's car.
A potential payment to... Robert Farley ...from the policy's... third-party property damage coverage ...to pay for repairs to Robert's car.
A potential payment to... Robert Farley ...from the policy's... third-party bodily damage coverage ...to pay for Robert's medical bills to treat his neck injury.

Some exposures result in a single payment. This is likely to be true for the first and second exposure in the previous example. Typically, repairs to a vehicle can be covered in a single payment. Other exposures manage a set of related payments. This could be true for the third exposure in the previous example. Medical treatment might occur over an extended period of time, and multiple payments may be needed, one for each treatment.

Exposures and coverages

Every exposure is directly linked to a coverage type. A coverage type is a type of loss specified on a policy. For example, for personal auto policies, PACollisionCov and PALiabilityCov are two coverage types. PACollisionCov covers damage to a vehicle owned by the insured. PALiabilityCov covers damages to vehicles owned by a third party where the damage was caused by the insured.

Every exposure is indirectly linked to an exposure type. An exposure type is a set of information to gather for an exposure. For example, VehicleDamage is an exposure type. It consists of information to gather about a damaged vehicle, such as where on the vehicle is the damage, who was the driver, and were the airbags deployed.

Two exposures can be linked to the same exposure type, even if the coverages are different. For example, PACollisionCov and PALiabilityCov are different coverages, but they can both involve damaged vehicles. The same set of information needs to be gathered about a damaged vehicle, regardless of which coverage is involved. Therefore, the two coverages are mapped to a single exposure type - the VehicleDamage exposure type. This exposure type is used to determine the information to gather during the claims process.

Some coverages link to multiple exposure types. Therefore, ClaimCenter does not link coverage types directly to exposure types. Instead, ClaimCenter links them through coverage subtypes. A coverage subtype is a value that links a coverage type to an exposure type. For example:

  • PACollisionCov is a coverage subtype that links the PACollisionCov coverage to the VehicleDamage exposure type. (In this case, the coverage type and coverage subtype have the same name.)
  • PALiabilityCov_vd is a coverage subtype that links the PALiabilityCov coverage to the VehicleDamage exposure type.

When you create an exposure, you must specify both its coverage and coverage subtype.

Exposures and reserve lines

When an exposure is created, ClaimCenter also creates a reserve line for the exposure. A reserve line is an amount of money set aside for expected payments related to a given exposure. Insurers are often legally required to create reserve lines to ensure that they maintain financial solvency.

Reserve lines can be created:

  • Automatically by business rules
  • Manually by adjusters

When a payment is made from an exposure, the money comes from this reserve line.

Exposures and validation levels

Just as is the case with claims, during an exposure's lifecycle, an exposure passes through one or more levels of maturity. Within ClaimCenter, these are called validation levels. The base configuration comes with the following levels, which are common to both claims and exposures:

  • Load and save - The claim/exposure has enough information to be saved to the database.
  • New loss completion - The claim/exposure has enough information to be assigned to an adjuster.
  • Valid for ISO - The claim/exposure has enough information to be filed with ISO. (ISO is a national database used in the United States to verify that the same loss is not being filed with multiple insurers.)
  • Send to external (systems) - The claim/exposure has enough information to send information about it to external systems within the insurer, such as a Policy Administration System that may be trying to assess policy renewal rates.
  • Ability to pay - The claim/exposure has enough information such that payments can be written for it.
Note: In the base configuration, the "load and save" level applies only to claims and exposures that are being imported through the ClaimCenter SOAP-based ClaimAPI API. Draft exposures submitted through the system APIs do not need to pass any level. In order for a draft claim to be promoted to an open claim, the draft claim and all of its exposures must pass both the "load and save" level and the "new loss completion" level. For more information, see Executing FNOL.

A exposure's validation level is determined and enforced by a set of exposure validation rules. Whenever a change is made to an exposure, the validation rules determine if the exposure can be advanced to a later stage of validation. The validation rules also prevent an exposure from moving backwards to a lower level of validation. For more information on validation rules, see the Gosu Rules Guide.

A claim and its exposures are not necessarily always at the same validation level. For example, suppose there is a claim with two exposures. It is possible for the claim to be at "send to external" while one of the exposures is at "new loss completion" and other is at "ability to pay".

In order to make a payment, both the claim and the exposure from which the payment is coming must be at "ability to pay". If a claim has multiple exposures, and the claim and one of the exposures are at "ability to pay", you can make payments from that one exposure, even though the other exposures are not yet at "ability to pay".

Exposures and ClaimContacts

Every exposure has at least one ClaimContact - the claimant. Exposures can have additional ClaimContacts associated with them.

For more information on ClaimContacts, see ClaimContacts.

Exposures and incidents

Every exposure is associated with an incident. An incident is a collection of information that typically represents an item that was lost or damaged, such as:

  • A vehicle
  • A property (such as a house or a fence)
  • A person suffering one or more injuries

You cannot create an exposure without an incident. For more information on incidents, see Incidents.