Definition of "Municipal insurance"

Property and/or liability coverage for a municipality. Municipalities are responsible for maintenance of through ways as well as a myriad of public services. Liability insurance for municipalities became an issue in the insurance crunch of 1985-1986, when this coverage became difficult to find, or became overly expensive. The problem was aggravated by court decisions in negligence cases in which the doctrine of joint and several liability came into play. This doctrine provides that a judgment against several defendants could be collected from one if the others were unable to pay. A municipality found to have been 10% liable in a traffic accident because of the improper placement of a stop sign might end up paying 100% of the judgment if the driver who was 90% responsible had no assets. This resulted in sharply higher premiums for municipal insurance.

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

Donation of amount "A," made by donor X to a charity. The charity agrees to pay donor X an amount ("B") for the rest of donor X's life. Since the donation is used to fund an annuity, only a ...

Technique used by insurance companies in the purchasing of debt obligations of corporations as a means to: (1) avoid the uncertainties of the market; (2) replace market negotiations with ...

Insurance policy that pays a face amount/ lump sum if the insured is diagnosed with a specified critical illness. This sum is paid directly to the insured regardless of any other sources of ...

Gain when the underlying asset that moves in one direction is significantly different from the loss when the underlying asset moves in the opposite direction; for example, when gains and ...

Methods by which a home office underwriter chooses applicants that an insurer will accept. The underwriter's job is to spread the costs equitably among members of the group to be insured. ...

Reinsurance clause that stipulates that the reinsurer will be subject to the same fate as the ceding company. ...

Provision found in juvenile insurance that waives the premiums due on the insured child's policy provided that the payor of the premiums becomes totally disabled or dies before the child ...

Same as term Participating Insurance: policy that pays a dividend to its owner. ...

Basic requirements of an employee benefit insurance plan such as minimum age and years of service with an employer. ...

Popular Insurance Questions