Definition of "Bottomry"
Method of transferring pure risks that is perhaps the seed of the modern day insurance policy. Ancient Greece held to the concept that a loan on a ship was canceled if the ship failed to return to its port. This concept was adopted by Lloyd's of London in the 1600s when insuring England's merchants for goods shipped to the colonies. The formation of property and casualty insurance companies worldwide began by insuring the transport of merchandise over bodies of water.
Popular Insurance Terms
Form of insurance that insurance companies buy for their own protection, "a sharing of insurance." An insurer (the reinsured) reduces its possible maximum loss on either an individual risk ...
Same as term Compulsory Insurance: coverage required by the laws of a particular state. For example, many states stipulate minimum amounts of automobile liability insurance that must be ...
Provision in a policy that states the circumstances under which an insurer may elect not to renew the policy. ...
Smallest premium necessary to keep the life insurance policy in force regardless of the current mortality, interest, and expense experience of the insurance company. This type of premium is ...
Situation in which insurance benefits exceed the actual loss of an insured. Overinsurance can be a problem for the insurer because it may tempt the insured to make a false claim in order to ...
Type of premium plan under which the employer (if noncontributory plan) or the employer and employee (if contributory plan) make level annual premium payments to fund the future retirement ...
Amount of required capital that the insurance company must maintain based on the inherent risks in the insurer's operations. These risks include asset depreciation risk, credit receivables ...
Written document containing instructions on managing one's assets during one's lifetime. The document may be revoked (unless made irrevocable at creation), terminated, or amended at any ...
Independent insurance salesperson who represents particular insurers but may also function as a broker by searching the entire insurance market to place an applicant's coverage to maximize ...
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