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
Extra layer of life insurance coverage. This term is often applied to double indemnity. For example, some life insurance policies provide a death benefit of a multiple of the face value if ...
Rule that concerns the distribution of the aggregate surplus among the policies in the same proportion as each respective policy has contributed to the surplus. ...
Sum of money to be received by an insured in the event a given loss occurs. ...
Modifications of the traditional defined benefit plan in which employees are credited with a specified percentage for each year of recognized service with the employer. Upon termination of ...
Rate charged by the Federal Reserve to commercial banks for overnight loans made by these banks. If the Federal Reserve decreases the discount rate, other rates will decline as well. ...
Insurance company's reinsurance commissions and expense allowances divided by its adjusted surplus account. The smaller this ratio, the more financially sound the insurance company, since ...
Coverage if transmission equipment is damaged or destroyed on an all risks basis excluding the perils of war, wear and tear, inherent defect, and nuclear damage, consequential loss ...
Coverage for personal effects of a tourist, including apparel, books, toilet articles, watches, jewelry, luggage, portable typewriters, photographs and photography equipment and supplies. ...
Insurance salesperson who searches the marketplace in the interest of clients, not insurance companies. ...
Have a question or comment?
We're here to help.