Finite Risk Insurance
Type of insurance that provides a single aggregate limit of coverage within the insurance policy terms, thereby limiting the insurance company's liability for a risk transferred to it. The insurance coverage is tailored to the requirements of the insured company to reflect the insured's actual coverage needs. If the insured's losses are favorable, the insured receives the return of a portion of the premium paid. The insured's premium costs are based on the insured's own loss experience, rather than the overall loss experience of a pool of similar insureds. In essence, through this type of insurance, the insured pays for exposure to loss and if there is not a substantial loss, the insured receives the return of a portion of the premium paid in. This insurance mechanism is ideal for insureds who exhibit a frequency distribution of high severity loss or an unusual loss frequency.
Popular Insurance Terms
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Difference between the actuarial equivalent (rate) and the often lower rate actually charged to insure a risk. ...
recipient. insurance company that receives a premium payment from a payer. insured or beneficiary who receives a loss or benefit payment from an insurer. ...
Maximum limit of liability of an insurance company for a particular claim or kind of loss that is applicable in general to all such claims or losses. This maximum limit of liability is ...
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Single insurance policy for only one kind of property at only one location of an insured. For example, property insurance on a rare piano in the insured's home would cover only that piano, ...
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Excess of loss reinsurance written on a facultative reinsurance basis to provide cover for a particular PRIMARY INSURANCE policy. ...
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