Company: NODK
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0001174947-25-000304
Chunk: 295

Company: NI Holdings, Inc.
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1A
Chunk 295
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 legal environment, our claims handling philosophy, or personnel, it may have an impact on the future claims
payments, which could cause existing reserves to either be redundant (excessive) or deficient (below) compared to the actual loss amount.

Change in Reporting Lag

As discussed above, we utilize historical patterns to provide an
accurate estimate of what will take place in the future. Should we experience an unexpected delay in reporting time (claims are slower
to be reported than in the past), we may underestimate the anticipated number of future claims, which could cause the ultimate loss we
may experience to be underestimated. A lag in reporting may be caused by changes in how claims are reported, the types or lines of business
we write, our distribution system, and the geographic area where we choose to insure risk.

Due to the inherent uncertainty underlying loss reserve estimates,
final resolution of the estimated liability for unpaid losses and loss adjustment expenses may be higher or lower than the related loss
reserves at the reporting date. Therefore, actual paid losses, as claims are settled in the future, may be materially higher or lower
in amount than current loss reserves. We reflect adjustments to the liability for unpaid losses and loss adjustment expenses in the results
of operations during the period in which the estimates are changed.

40 

Investments

Our fixed income securities and equity securities are classified
as available-for-sale and carried at estimated fair value as determined by management based upon quoted market prices or a recognized
independent pricing service at the reporting date for those or similar investments. Changes in unrealized investment gains or losses on
the fixed income securities, net of applicable income taxes, are reflected directly in shareholders’ equity as a component of other
comprehensive income (loss) and, accordingly, have no effect on net income (loss). Changes in unrealized investment gains or losses on
equity securities are reported in net income (loss). Investment income from fixed income securities is recognized when earned, and realized
investment gains (losses) are recognized when investments are sold, the fair value of equity securities change, or credit impairments
are recognized.

For additional information on our investments,
see Part II, Item 8, Note 4 “Investments” and Note 5 “Fair Value Measurements.”

Deferred Policy Acquisition Costs

Certain direct policy acquisition costs consisting of commissions,
state premium taxes, and other direct underwriting expenses that vary with and are primarily related to the production of business are
deferred and amortized over the effective period of the related insurance