Insurers' Claims Costs include all costs to settle claims, including: Actual claim payments; Legal expenses related to claims; Claims department salaries, rent, and utilities; and Court fees and Penalties for wrongful claim denial. Claims Costs vary, year to year, or portfolio to portfolio, because policyholders' health care costs vary. This is why we buy insurance. Insurer's average claims costs rarely vary more than 5-20% of long term average Claims Costs, while individual policyholders' Claims Costs may vary between $0.00 and 10,000 times average Claims Costs.