Definition of "Interest rate cap"

Cesar Guerra real estate agent

Written by

Cesar Guerraelite badge icon

Luxe Living Group

Upper limit on the maximum possible interest rate an insurance company will pay. If the market interest rates are below that maximum, the insurance company pays the market interest rate. In this way, the insurance company can hedge its interest rate exposure (risk that interest rates will rise or fall at some stipulated time), reflected by changes in the value of its assets on the balance sheets.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Property, liability, or health coverage above the primary amount of insurance. For example, the primary coverage is $100,000 and the excess insurance is $1 million. After the losses exceed ...

form of BOILER AND MACHINERY INSURANCE that covers power generating plants. form of BUSINESS INCOME COVERAGE FORM that covers a utility customer's losses resulting from interruption of ...

Insurance that covers each and every loss except for those specifically excluded. If the insurance company does not specifically exclude a particular loss, it is automatically covered. ...

Coverage for suits brought by a plaintiff as the result of bodily injury incurred while using an elevator on the insured's premises. ...

Coverage on real property written to have no time limit. A single deposit premium pays for insurance for the life of the risk. The insurer earns enough investment income on the deposit to ...

Legal procedure through which a court determines the rightful claimant (of two or more claimants making the same claim) against a third party. Insurance companies use interpleader if claims ...

number of serious injuries per 1,000,000 employee-hours worked. ...

Claim, such as a worker's lien, to property under the care, custody, and control of another. This situation occurs when a worker is not paid for labor provided. For example, a carpenter ...

Insurance written on the personal and real property of an individual (or individuals) to include such policies as the home owners insurance policy and personal automobile policy. ...

Popular Insurance Questions