Liability for Unpaid Claims and Claim Adjustment Expenses

Roll forward of Claim Liability

The following table presents the activity in the net liability for unpaid losses and allocated loss adjustment expenses of short duration contracts for the following periods:



	Three Months Ended March 31,
	2020			2019
Policy liabilities and unpaid claims balance as of January 1,	$	144,384		$	131,611
Less: liabilities of policy-holder accounts balances, gross	(11,589		)	(13,659		)
Less: non-insurance warranty benefit claim liabilities	(85		)	(94		)
Gross liabilities for unpaid losses and loss adjustment expenses	132,710			117,858
Less: reinsurance recoverable on unpaid losses - short duration	(88,599		)	(90,016		)
Less: other lines, gross	(230		)	(227		)
Net balance as of January 1, short duration	43,881			27,615

Incurred (short duration) related to:
Current year	39,485			33,137
Prior years	6,408			2,362
Total incurred	45,893			35,499

Paid (short duration) related to:
Current year	35,182			29,713
Prior years	4,258			4,973
Total paid	39,440			34,686

Net balance as of March 31, short duration	50,334			28,428
Plus: reinsurance recoverable on unpaid losses - short duration	88,428			88,695
Plus: other lines, gross	248			230
Gross liabilities for unpaid losses and loss adjustment expenses	139,010			117,353
Plus: liabilities of policy-holder accounts balances, gross	10,594			13,138
Plus: non-insurance warranty benefit claim liabilities⁽¹⁾	45,860			94
Policy liabilities and unpaid claims balance as of March 31,	$	195,464		$	130,585


⁽¹⁾	Primarily relates to Smart AutoCare which was acquired on January 3, 2020. See Note (3) Acquisitions for more information.

The following schedule reconciles the total short duration contracts per the table above to the amount of total losses incurred as presented in the condensed consolidated statement of operations, excluding the amount for member benefit claims:



	Three Months Ended March 31,
	2020		2019
Short duration incurred	$	45,893	$	35,499
Unallocated loss adjustment expense	83		294
Total losses incurred	$	45,976	$	35,793

For the three months ended March 31, 2020, the Company’s insurance business experienced an increase in prior year case development of $6,408, primarily from its non-standard auto business.

For the three months ended March 31, 2019, the Company’s insurance business experienced an increase in prior year case development of $2,362, primarily from its non-standard auto business.