Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10-year-old sofa will not be replaced at current full value because of a decade of depreciation.
A demand made by the insured, or the insured’s beneficiary, for payment of the benefits as provided by the policy.
In property insurance, requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss. For health insurance, it is a percentage of each claim above the deductible paid by the policyholder. For a 20% health insurance coinsurance clause, the policyholder pays for the deductible plus 20% of his covered losses. After paying 80% of losses up to a specified ceiling, the insurer starts paying 100% of losses.
The scope of protection provided under an insurance policy. In property insurance, coverage lists perils insured against, properties covered, locations covered, individuals insured, and the limits of indemnification.
The geographic region covered by travel insurance.
Amount of loss that the insured pays before the insurance kicks in.
Items or conditions that are not covered by the general insurance contract.
Measure of vulnerability to loss, usually expressed in dollars or units.
Restoration to the victim of a loss by payment, repair or replacement. Insurable Interest – Interest in property such that loss or destruction of the property could cause a financial loss.
Insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility, due to negligence, to others imposed by law or assumed by contract.
Expenses incurred to investigate and settle losses.
The ratio of incurred losses and loss-adjustment expenses to net premiums earned. This ratio measures the company’s underlying profitability, or loss experience, on its total book of business.
Perils specifically covered on insured property.
Contract terms, including costs that can never be changed. expected not intended by the insured.
A predetermined amount of money that an individual must pay before insurance will pay 100% for an individual’s health-care expenses.
The cause of a possible loss.
The written contract effecting insurance, or the certificate thereof, by whatever name called, and including all clause, riders, endorsements, and papers attached thereto and made a part thereof.
The dollar amount needed to replace damaged personal property or dwelling property without deducting for depreciation but limited by the maximum dollar amount shown on the declarations page of the policy.
An amount representing actual or potential liabilities kept by an insurer to cover debts to policyholders. A reserve is usually treated as a liability.
The right of an insurer who has taken over another’s loss also to take over the other person’s right to pursue remedies against a third party.
Life insurance that provides protection for a specified period of time. Common policy periods are one year, five years, 10 years or until the insured reaches age 65 or 70. The policy doesn’t build up any of the nonforfeiture values associated with whole life policies.
A loss of sufficient size that it can be said no value is left. The complete destruction of the property. The term also is used to mean a loss requiring the maximum amount a policy will pay.
The process of selecting risks for insurance and classifying them according to their degrees of insurability so that the appropriate rates may be assigned. The process also includes rejection of those risks that do not qualify.
That part of the premium applicable to the unexpired part of the policy period.