Which of the following best describes 90/10 rule regarding claims?

The 90/10 rule regarding claims typically refers to the allocation of claim costs in insurance, particularly in personal injury claims. Under this guideline, it is observed that a significant majority of claim costs—90%—are attributed to injury-related expenses, while only a smaller portion—10%—is related to property damage. This reflects the greater financial impact that injuries often have in claims compared to property damages.

This rule is often referenced in discussions surrounding underwriting, risk assessment, and claims management, emphasizing the importance of being aware of the potential costs associated with bodily injuries in comparison to property claims. Insurers utilize this information to anticipate claim costs and to set premium pricing accordingly.