Limit Of Recovery
Definition of "Limit of recovery"
Same as term Coinsurance: in property insurance, when the insurance policy contains this clause, coinsurance defines the amount of each loss that the company pays according to the following relationship:Amount of Insurance Carried x Amount of Loss = Insurance Company PaymentWhere: Amount of Insurance Required = Value of Property Insured Coinsurance
x Clause percentage
Amount of Insurance RequiredAmount Note that the indemnification of the insured for a property loss can never exceed the dollar amount of the actual loss; the dollar limits of the insurance policy; the dollar amount determined by the coinsurance relationship. The lesser of the above three amounts will always apply. In commercial health insurance, when the insured and the insurer share in a specific ratio of the covered medical expenses, coinsurance is the insured's share of covered losses. For example, in some policies the insurer pays 75-80% of the covered medical expenses and the insured pays the remainder. In other policies, after the insured pays a deductible amount, the insurer pays 75-80% of the covered medical expenses above the deductible and the insured pays the remainder until a maximum dollar amount is reached (for example, $5000). The insurer pays 100% of covered medical expenses over this dollar amount up to the limits of the policy.
Popular Insurance Terms
Coverage when business records are destroyed by an insured peril and the business cannot collect money owed. The policy covers these uncollectible sums plus the expense of record ...
Type of loan that has been insured by the Federal Housing Administration or a private mortgage insurance company. ...
Instrument that guarantees compliance with various city, county, and state laws that govern the issuance of a particular license to conduct business. ...
Health plans established by associations of hospitals and physicians to provide hospital service and care, and medical and surgical care. ...
Same as term Unallocated Funding Instrument: pension funding agreement under which funds paid into a retirement plan are not currently allocated to purchase retirement benefits. The funds ...
Resident patient of a medical installation. Previously, health insurance benefits were limited to in-patient care. Today health insurance policies provide an extensive list of out-patient ...
Tax advantages of investing in life insurance fall into two main areas: tax deferral on untaxed buildup of earnings in such cash value policies as whole life insurance and annuities, and ...
Intentional damage or destruction of another person or business's property. Insurance can be purchased by the owner of the property to protect against this exposure. ...
Time, in health insurance, from the first day of a disability, illness, or accident during which no benefits are payable. The longer the probationary period, the lower the premium. ...
Have a question or comment?
We're here to help.