A form attached to an insurance policy that alters the policy’s coverage, terms and/or conditions. Used to cover hazards not listed in standard home insurance plans, a rider or endorsement “rides on” those basic insurance plans, adding an additional set of terms and conditions for specific, previously uninsurable situations. The hazards included must be listed … Read more
The funds or assets an insurance company holds at any given time which can be used to pay insurance claims. Insurers set the reserve aside, along with interest and premiums paid by all policyholders, as they accrue and mature, allocating money for losses as they occur. When examining their financial status on a balance sheet, … Read more
Insurance that covers the insured’s dwelling or damaged personal property to the exact dollar amount of its worth. Though it costs more than an actual cash value policy, replacement cost coverage doesn’t depreciate the damaged item’s value before reimbursing the policyholder. That enables the insured person to replace the item almost immediately at the value … Read more
Keeping an active insurance policy in place by meeting the terms of your insurance contract and continuing it automatically through renewal at the end of the policy period. Unless you request new or additional coverage, your policy usually doesn’t change come renewal time. However, the insurance company has the option to raise or lower your … Read more
The transference of risk from one insurer to another in return for a stated premium. When reinsurance is ceded, the entire element of risk moves from the first insurer, which originally held all the risk, to a second insurer, which now agrees to bear it. « insurance glossary
Insurance purchased by an insurer on behalf of the company that originally wrote the policy. Reinsurance allows a second company to assume part of the risk and part of the premium on the original policy, freeing up the funds of the primary, or original, insurer so it can sell more policies. Reinsurance works a bit … Read more
An unincorporated association—or group of individuals, firms or corporations—organized to write insurance for and mutually insure one another as members of the shared group. In a reciprocal insurance exchange, each group subscriber separately assumes his or her share of the risk being covered by the insurance policy. This type of exchange is administered by what’s … Read more
A set charge pledged by an insurance company for insuring someone during a specific period of time. Depending on the type of insurance desired, a quote takes many items into consideration, including factors like age, health, vehicle make and model, and the geographic location of the person’s home. In addition, a quote for identical coverage … Read more
Liquid property that can be quickly converted into cash. For example, if you own certain types of life insurance, you may be able to borrow against your policy’s cash value when and if you need to in order to help cover other expenses. In order to be considered quick assets, most insurers require that funds … Read more
A specific event that would otherwise result in the termination of an individual’s group health insurance coverage, but that entitles him or her to continue being insured under that plan for a limited time under the Consolidated Omnibus Budget Reconciliation Act (COBRA). A qualifying event might include: 1. The death of a covered employee 2. … Read more