Overinsurance
Situation in which insurance benefits exceed the actual loss of an insured. Overinsurance can be a problem for the insurer because it may tempt the insured to make a false claim in order to profit financially. Various safeguards are designed to prevent overinsurance. For example, in group health insurance, companies break down benefits paid by the primary carrier and the secondary carrier through coordination of benefits. Still, some types of coverage, particularly disability income insurance, are subject to overinsurance abuse.
Popular Insurance Terms
Any fee imposed on insurance companies by a state. Insurers pay special taxes, including premium taxes and franchise taxes. In addition, various states have their own special charges to ...
INSURANCE health insurance policy providing coverage for an insured's medical expenses except those that are specifically excluded. This may be the most advantageous medical expense policy ...
In insurance, combination of the loss ratio and the expense ratio. The combined ratio is important to an insurance company since it indicates whether or not the company is earning a profit ...
Insurance company that puts together a consortium of insurance and reinsurance companies to provide an adequate financial base with sufficient underwriting capacity to insure large risks. ...
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 ...
Same as term Flat Rate: rate not subsequently adjusted. The rate stays in effect regardless of an insured's subsequent loss record. ...
Item given or sold to a buyer that establishes a standard of quality by which later products will be judged. Since the uniform commercial code does not distinguish between a sample and a ...
Act of starting a fire; arson. Arson is a covered peril under a property insurance contract, provided that the owner of the property is not responsible for the arson. ...
Coverage for designated horses and other farm animals if they are damaged or destroyed. The insurance includes registered cattle and herds, other farm livestock, and zoo animals. This type ...
Have a question or comment?
We're here to help.