What is a favorable claims history in insurance?

A favorable claims history in insurance is characterized by a history indicating that the insured has filed few or no claims. This type of record demonstrates to insurers that the policyholder is less likely to engage in risky behavior or experience losses, which can lead to better premiums or other benefits. Insurers often evaluate claims history when underwriting policies or determining rates, and a favorable history could result in lower insurance costs for the insured.

In contrast, a record of frequent claims or high-value claims may suggest a higher risk to insurers, leading to higher premiums or more scrutiny when issuing or renewing policies. Denied claims generally do not reflect positively on the insured's history, as they indicate issues that may be related to misrepresentation or other negative factors. Therefore, having a history of few claims is seen as an asset in the context of personal lines insurance.