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Ames Nebraska Auto InsuranceHelpful links and resources for finding a auto insurance in Ames, Nebraska. Ames, Nebraska Legal Directory; We're here to help you find insurance in Ames, Nebraska. |
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Insurance Information
Cancellation
The discontinuance of an insurance policy before its normal expiration date, either by the insured or the company.
Captive Agent
A licensed insurance agent who sells insurance for only one company.
Captive Insurance Company
A company owned solely or in large part by one or more non- insurance entities for the primary purpose of providing insurance coverage to the owner or owners.
Casualty Insurance
Insurance concerned with the insured's legal liability for injuries to others or damage to other persons' property; also encompasses such forms of insurance as plate glass, burglary, robbery and workers' compensation.
Catastrophe
Event which causes a loss of extraordinary magnitude, involving a large number of people, such as a hurricane or tornado.
Cede
To transfer all or part of a risk written by an insurer (the ceding, or primary company) to a reinsurer.
Certificate of Insurance
A statement of coverage issued to an individual insured under a group insurance contract, outlining the insurance benefits and principal provisions applicable to the member.
Cession
Amount of the insurance ceded to a reinsurer by the original insuring company in a reinsurance operation.
Claim
A request for payment of a loss which may come under the terms of an insurance contract.
Claimant Vehicle
Vehicle owned or driven by another party involved in a loss.
Claims Adjuster
Person who investigates and/or settles claims - an agent, company adjuster, independent adjuster, adjustment bureau, or public adjuster
Class Factor
Class factors (also referred to as driver class factors) are based on the age of the driver and the usage of the vehicle. It is one of the main components used in rating auto policies. The factor is applied to the base rate and specific coverages.
Collision
A form of insurance protecting the insured against loss resulting from any damage to the insured's vehicle caused by collision with any object whether or not it was the insured's fault. Requires comprehensive coverage.
Collision for Rental Vehicle
Collision coverage, which may be purchased on liability only policies to cover rented vehicles. Coverage only available in state of Alaska.
Collision Full Glass
No deductible for glass damage resulting from a collision. Deductible applies to all other damage.
Collision Liability Buy Back
Available in Michigan, this coverage will pay the $500 that a Michigan resident is responsible for if they damage the property of another in an at fault accident.
Collision Waiver Deduction
Collision deductible would be waived ONLY if vehicle is damaged by an AT-FAULT uninsured motorist. Requires CL and UMBI. Coverage only available in state of California
Combined Ratio
Basically, a measure of the relationship between dollars spent for claims and expenses and premium dollars taken in; more specifically, the sum of the ratio of losses incurred to premiums earned and the ratio of commissions and expenses incurred to premiums written. A ratio above 100 means that for every premium dollar taken in, more than a dollar went for losses, expenses, and commissions.
Combined Single Limit
Liability limits that specify a single dollar amount for combined Bodily Injury and Property damage, without showing specific limits for each indiviudal coverage. For instance the combined single limit for the policy is $100,000. The individual coverages are not given specific limits and limited only by the aggregate amount of coverage.
Commercial Auto Insurance
Provides coverage to a business for losses that arise out of vehicles which are owned or used by the business.
Commercial General Liability Policy
Commercial liability policy drafted by the Insurance Services Office containing two coverage forms-an occurrence form and a claims-made form.
Commercial Lines
A general term for any type of insurance (property, casualty, health, life, etc.) purchased by businesses, organizations, institutions, governmental agencies or other commercial establishments to protect risks associated with their operations.
Commission
The part of an insurance premium paid by the insurer to an agent or broker for his services in procuring and servicing the insurance.
Commissioner
A state officer who administers the state's insurance laws and regulations. In some states, this regulator is called the director or superintendent of insurance.
Comparative Negligence
Under this concept a plaintiff (the person bringing suit) may recover damages even though there is contributory negligence. His or her recovery, however, is reduced by the amount or percent of that negligence.
Comprehensive
Loss caused by factors other than collision: ex. Missiles or falling objects; fire; theft or larceny; explosion or earthquake; windstorm; hail; water or flood; malicious mischief or vandalism; riot or civil commotion; contact with a bird or animal; or breakage of glass.
Comprehensive Full Glass
Comprehensive with no deductible for glass damage only. Deductible does apply to other comprehensive losses. In FL, CPG applies to windshield ONLY. Coverage not available in every state.
Comprehensive Personal Liability Insurance
Protection against loss arising out of legal liability to pay money for damage or injury to others for which the insured is responsible. It does not include automobile or business operation liabilities. Refers to the general liability (not auto related) exposures that accompany a person's non-business activities. For example, your dog bites someone or you hit someone with a golf ball. This coverage is generally available to our Fulltimers as a form of coverage to replace their Homeowner's Liability that they lose when they sell their house and RV Fulltime.
Comprehensive Rental Vehicle
Comprehensive coverage, which may be purchased on a liability-only policy to cover rented vehicles. Available only in AK.
Compulsory Auto Liability Insurance
Insurance laws in some states require motorists to carry at least certain minimum auto coverages.
Concealment
Deliberate failure of an applicant for insurance to reveal a material fact to the insurer.
Concurrent Causation
Legal doctrine that states when a property loss is due to two causes, one that is excluded and one that is covered, the policy provides coverage.
Consideration
One of the elements for a binding contract. Consideration is acceptance by the insurance company of the payment of the premium and the statement made by the prospective policyholder in the application.
Consumer Report
A variety of information about the consumer including, prior loss reports (PLR), motor vehicle reports (MVR), and credit score.
Contract
A binding agreement between two or more parties for the doing or not doing of certain things. A contract of insurance is embodied in a written document called the policy.
Contractual Liability
Legal liability of another party that the business firm agrees to assume by a written or oral contract to a declared limit.
Contribution by Equal Shares
Type of other-insurance provision often found in liability insurance contracts that requires each company to share equally in the loss until the share of each insurer equals the lowest limit of liability under any policy or until the full amount of loss is paid.
Contributory Negligence
Any negligence on the part of the plaintiff which contributed to the cause of the accident may bar the plaintiff from recovery against a negligent defendant, even if the defendant was more negligent than the plaintiff.
Coverage
The scope of protection provided under a contract of insurance; any of several risks covered by a policy.
Credit Score
A number that is obtained from a credit bureau vendor. The number, which is also referred to as a score is the result of applying the consumers credit file information against a standard insurance industry model. The score does not enable anyone to determine specifically what information was in the consumer's credit file.
Cancellation
The discontinuance of an insurance policy before its normal expiration date, either by the insured or the company.
Captive Agent
A licensed insurance agent who sells insurance for only one company.
Captive Insurance Company
A company owned solely or in large part by one or more non- insurance entities for the primary purpose of providing insurance coverage to the owner or owners.
Casualty Insurance
Insurance concerned with the insured's legal liability for injuries to others or damage to other persons' property; also encompasses such forms of insurance as plate glass, burglary, robbery and workers' compensation.
Catastrophe
Event which causes a loss of extraordinary magnitude, involving a large number of people, such as a hurricane or tornado.
Cede
To transfer all or part of a risk written by an insurer (the ceding, or primary company) to a reinsurer.
Certificate of Insurance
A statement of coverage issued to an individual insured under a group insurance contract, outlining the insurance benefits and principal provisions applicable to the member.
Cession
Amount of the insurance ceded to a reinsurer by the original insuring company in a reinsurance operation.
Claim
A request for payment of a loss which may come under the terms of an insurance contract.
Claimant Vehicle
Vehicle owned or driven by another party involved in a loss.
Claims Adjuster
Person who investigates and/or settles claims - an agent, company adjuster, independent adjuster, adjustment bureau, or public adjuster
Class Factor
Class factors (also referred to as driver class factors) are based on the age of the driver and the usage of the vehicle. It is one of the main components used in rating auto policies. The factor is applied to the base rate and specific coverages.
Collision
A form of insurance protecting the insured against loss resulting from any damage to the insured's vehicle caused by collision with any object whether or not it was the insured's fault. Requires comprehensive coverage.
Collision for Rental Vehicle
Collision coverage, which may be purchased on liability only policies to cover rented vehicles. Coverage only available in state of Alaska.
Collision Full Glass
No deductible for glass damage resulting from a collision. Deductible applies to all other damage.
Collision Liability Buy Back
Available in Michigan, this coverage will pay the $500 that a Michigan resident is responsible for if they damage the property of another in an at fault accident.
Collision Waiver Deduction
Collision deductible would be waived ONLY if vehicle is damaged by an AT-FAULT uninsured motorist. Requires CL and UMBI. Coverage only available in state of California
Combined Ratio
Basically, a measure of the relationship between dollars spent for claims and expenses and premium dollars taken in; more specifically, the sum of the ratio of losses incurred to premiums earned and the ratio of commissions and expenses incurred to premiums written. A ratio above 100 means that for every premium dollar taken in, more than a dollar went for losses, expenses, and commissions.
Combined Single Limit
Liability limits that specify a single dollar amount for combined Bodily Injury and Property damage, without showing specific limits for each indiviudal coverage. For instance the combined single limit for the policy is $100,000. The individual coverages are not given specific limits and limited only by the aggregate amount of coverage.
Commercial Auto Insurance
Provides coverage to a business for losses that arise out of vehicles which are owned or used by the business.
Commercial General Liability Policy
Commercial liability policy drafted by the Insurance Services Office containing two coverage forms-an occurrence form and a claims-made form.
Commercial Lines
A general term for any type of insurance (property, casualty, health, life, etc.) purchased by businesses, organizations, institutions, governmental agencies or other commercial establishments to protect risks associated with their operations.
Commission
The part of an insurance premium paid by the insurer to an agent or broker for his services in procuring and servicing the insurance.
Commissioner
A state officer who administers the state's insurance laws and regulations. In some states, this regulator is called the director or superintendent of insurance.
Comparative Negligence
Under this concept a plaintiff (the person bringing suit) may recover damages even though there is contributory negligence. His or her recovery, however, is reduced by the amount or percent of that negligence.
Comprehensive
Loss caused by factors other than collision: ex. Missiles or falling objects; fire; theft or larceny; explosion or earthquake; windstorm; hail; water or flood; malicious mischief or vandalism; riot or civil commotion; contact with a bird or animal; or breakage of glass.
Comprehensive Full Glass
Comprehensive with no deductible for glass damage only. Deductible does apply to other comprehensive losses. In FL, CPG applies to windshield ONLY. Coverage not available in every state.
Comprehensive Personal Liability Insurance
Protection against loss arising out of legal liability to pay money for damage or injury to others for which the insured is responsible. It does not include automobile or business operation liabilities. Refers to the general liability (not auto related) exposures that accompany a person's non-business activities. For example, your dog bites someone or you hit someone with a golf ball. This coverage is generally available to our Fulltimers as a form of coverage to replace their Homeowner's Liability that they lose when they sell their house and RV Fulltime.
Comprehensive Rental Vehicle
Comprehensive coverage, which may be purchased on a liability-only policy to cover rented vehicles. Available only in AK.
Compulsory Auto Liability Insurance
Insurance laws in some states require motorists to carry at least certain minimum auto coverages.
Concealment
Deliberate failure of an applicant for insurance to reveal a material fact to the insurer.
Concurrent Causation
Legal doctrine that states when a property loss is due to two causes, one that is excluded and one that is covered, the policy provides coverage.
Consideration
One of the elements for a binding contract. Consideration is acceptance by the insurance company of the payment of the premium and the statement made by the prospective policyholder in the application.
Consumer Report
A variety of information about the consumer including, prior loss reports (PLR), motor vehicle reports (MVR), and credit score.
Contract
A binding agreement between two or more parties for the doing or not doing of certain things. A contract of insurance is embodied in a written document called the policy.
Contractual Liability
Legal liability of another party that the business firm agrees to assume by a written or oral contract to a declared limit.
Contribution by Equal Shares
Type of other-insurance provision often found in liability insurance contracts that requires each company to share equally in the loss until the share of each insurer equals the lowest limit of liability under any policy or until the full amount of loss is paid.
Contributory Negligence
Any negligence on the part of the plaintiff which contributed to the cause of the accident may bar the plaintiff from recovery against a negligent defendant, even if the defendant was more negligent than the plaintiff.
Coverage
The scope of protection provided under a contract of insurance; any of several risks covered by a policy.
Credit Score
A number that is obtained from a credit bureau vendor. The number, which is also referred to as a score is the result of applying the consumers credit file information against a standard insurance industry model. The score does not enable anyone to determine specifically what information was in the consumer's credit file.
Insurance Information
Lapse
Insurance policy termination due to the insured's failure to make premium payments.
Larceny
Theft other than one involving a forcible entry (burglary) or an actual or threatened bodily harm (robbery). Many jurisdictions prefer the term theft.
Last Clear Chance Rule
The last reasonable opportunity to avoid an accident or injury. One who has the last clear chance to avoid an injury and fails to do so is usually held solely responsible, notwithstanding the injured person's own contributory negligence.
Law of Large Numbers
A principle that the larger the number of exposures considered, the more closely will reported losses equal the true probability of loss. This is the basis for the statistical expectation of loss, which determines premium rates.
Legal Reserve
Minimum reserves required by state law or regulation that life insurers must maintain to operate in that state.
Liability
An actual or potential legal obligation, duty, debt, or responsibility to another person; the obligation to compensate, in whole or part, a person harmed by one's acts or omissions. Liability insurance policies provide coverage for an insured's legal liability, excluding criminal acts, most intentional torts, and breach of contract.
Liability Insurance
Insurance that provides indemnity or compensation for a harm or wrong to a third party for which the insured is legally obligated to pay. Usually, the injury or damage is caused by the insured's negligent acts or omissions, but in some situations the law imposes strict liability without regard to negligence, and this may also be covered by liability insurance.
Liability Limits
The stipulated sum or sums beyond which an insurance company is not liable to protect the insured.
License
Legal authority granted by the state for a specified activity or business enterprise. State insurance departments grant licenses to insurance companies, agents, brokers, and other entities to transact insurance-related business within its borders.
License Bond
A bond guaranteeing that a person who has been issued a license will comply with the laws, regulations, and ordinances associated with the issuance of the license.
Lienholder
The financial institution that holds title of a vehicle until the loan is paid off.
Life Expectancy
The length of time a person of a given age can be expected to live, based on mortality tables.
Limited Collision
Physical damage protection for the insured's vehicle when damage results from impact with another object or upset. Paid ONLY if insured is LESS than 50% at fault. No deductible applies. Coverage only available in state of Michigan.
Liquidation
The conversion of an insolvent organization's assets into cash in order to pay creditors. An insurance department takes this action after it has determined that an insolvent insurer cannot be rehabilitated. Its business is wound up, and any remaining assets are used to pay policyholder claims and other creditors.
Liquor Liability Law
State or local statutes ("dram shop acts") that establish the liability of a business that sells or serves alcoholic beverages to customers for injuries caused by intoxicated customers to third parties. Laws sometimes also include people who serve alcohol to guests.
Living Trust
An ordinary trust established by a person while living to manage and distribute assets to other living persons.
Long-Term Care
Custodial care provided by a rehabilitation facility, nursing home or mental hospital on a continuum basis for chronically ill, disabled or retarded individuals. The care may be on an inpatient, outpatient, or at-home basis.
Loss
The happening of the event for which insurance pays. The amount the insurer is required to pay because of a happening against which it has insured.
Loss Avoidance
The elimination of a loss exposure by ceasing or never undertaking an activity that produces the exposure. In making this decision, the person or organization must weigh the potential value of the activity against the potential loss.
Loss Control
Prevention and reduction of losses. An insured, often in consultation with an underwriter or loss control specialist, takes measures to reduce the frequency of losses and to minimize the financial impact or severity of a loss.
Loss Expense - Allocated
An expense assigned to and recorded with a specific claim, including defense and investigation costs. Allocated claim expenses have more significance in liability insurance because of the legal costs involved in defending liability claims.
Loss Expense - Unallocated
An expense that cannot be assigned to and recorded with a specific claim. This includes claim department operating expenses such as rent, heat and electricity, and other overhead expenses.
Loss of Use / Services
Applies to a policyholder's exposure to financial loss if the part of the residence premises where the insured lives is damaged so badly that it is "not fit to live in".
Loss Payable Clause
A property insurance policy provision that authorizes the insurer to make a loss payment to a person (loss payee) other than the insured to the extent that the loss payee has an insurable interest in the property.
Loss Prevention
Measures designed to reduce the probability that a loss will occur. See also loss prevention services and loss reduction.
Loss Prevention Services
Survey, consultation, or loss control management services provided to policholders by an insurer to reduce the likelihood of accidents.
Loss Ratio
A formula used by insurers to relate loss expenses to income. Formula: (incurred losses + loss adjustment expenses) divided by earned premiums. See also accident year statistics, burning ratio, expected loss ratio, insured loss ratio.
Loss Reduction
A loss control measure designed to reduce the severity of loss occurrences.
Loss Reserve
An insurer's estimate of the amount an individual claim will ultimately cost. On an insurer's financial statement, it is the amount of estimated liabilities for known claims not yet paid and incurred but not reported claims.
Lapse
Insurance policy termination due to the insured's failure to make premium payments.
Larceny
Theft other than one involving a forcible entry (burglary) or an actual or threatened bodily harm (robbery). Many jurisdictions prefer the term theft.
Last Clear Chance Rule
The last reasonable opportunity to avoid an accident or injury. One who has the last clear chance to avoid an injury and fails to do so is usually held solely responsible, notwithstanding the injured person's own contributory negligence.
Law of Large Numbers
A principle that the larger the number of exposures considered, the more closely will reported losses equal the true probability of loss. This is the basis for the statistical expectation of loss, which determines premium rates.
Legal Reserve
Minimum reserves required by state law or regulation that life insurers must maintain to operate in that state.
Liability
An actual or potential legal obligation, duty, debt, or responsibility to another person; the obligation to compensate, in whole or part, a person harmed by one's acts or omissions. Liability insurance policies provide coverage for an insured's legal liability, excluding criminal acts, most intentional torts, and breach of contract.
Liability Insurance
Insurance that provides indemnity or compensation for a harm or wrong to a third party for which the insured is legally obligated to pay. Usually, the injury or damage is caused by the insured's negligent acts or omissions, but in some situations the law imposes strict liability without regard to negligence, and this may also be covered by liability insurance.
Liability Limits
The stipulated sum or sums beyond which an insurance company is not liable to protect the insured.
License
Legal authority granted by the state for a specified activity or business enterprise. State insurance departments grant licenses to insurance companies, agents, brokers, and other entities to transact insurance-related business within its borders.
License Bond
A bond guaranteeing that a person who has been issued a license will comply with the laws, regulations, and ordinances associated with the issuance of the license.
Lienholder
The financial institution that holds title of a vehicle until the loan is paid off.
Life Expectancy
The length of time a person of a given age can be expected to live, based on mortality tables.
Limited Collision
Physical damage protection for the insured's vehicle when damage results from impact with another object or upset. Paid ONLY if insured is LESS than 50% at fault. No deductible applies. Coverage only available in state of Michigan.
Liquidation
The conversion of an insolvent organization's assets into cash in order to pay creditors. An insurance department takes this action after it has determined that an insolvent insurer cannot be rehabilitated. Its business is wound up, and any remaining assets are used to pay policyholder claims and other creditors.
Liquor Liability Law
State or local statutes ("dram shop acts") that establish the liability of a business that sells or serves alcoholic beverages to customers for injuries caused by intoxicated customers to third parties. Laws sometimes also include people who serve alcohol to guests.
Living Trust
An ordinary trust established by a person while living to manage and distribute assets to other living persons.
Long-Term Care
Custodial care provided by a rehabilitation facility, nursing home or mental hospital on a continuum basis for chronically ill, disabled or retarded individuals. The care may be on an inpatient, outpatient, or at-home basis.
Loss
The happening of the event for which insurance pays. The amount the insurer is required to pay because of a happening against which it has insured.
Loss Avoidance
The elimination of a loss exposure by ceasing or never undertaking an activity that produces the exposure. In making this decision, the person or organization must weigh the potential value of the activity against the potential loss.
Loss Control
Prevention and reduction of losses. An insured, often in consultation with an underwriter or loss control specialist, takes measures to reduce the frequency of losses and to minimize the financial impact or severity of a loss.
Loss Expense - Allocated
An expense assigned to and recorded with a specific claim, including defense and investigation costs. Allocated claim expenses have more significance in liability insurance because of the legal costs involved in defending liability claims.
Loss Expense - Unallocated
An expense that cannot be assigned to and recorded with a specific claim. This includes claim department operating expenses such as rent, heat and electricity, and other overhead expenses.
Loss of Use / Services
Applies to a policyholder's exposure to financial loss if the part of the residence premises where the insured lives is damaged so badly that it is "not fit to live in".
Loss Payable Clause
A property insurance policy provision that authorizes the insurer to make a loss payment to a person (loss payee) other than the insured to the extent that the loss payee has an insurable interest in the property.
Loss Prevention
Measures designed to reduce the probability that a loss will occur. See also loss prevention services and loss reduction.
Loss Prevention Services
Survey, consultation, or loss control management services provided to policholders by an insurer to reduce the likelihood of accidents.
Loss Ratio
A formula used by insurers to relate loss expenses to income. Formula: (incurred losses + loss adjustment expenses) divided by earned premiums. See also accident year statistics, burning ratio, expected loss ratio, insured loss ratio.
Loss Reduction
A loss control measure designed to reduce the severity of loss occurrences.
Loss Reserve
An insurer's estimate of the amount an individual claim will ultimately cost. On an insurer's financial statement, it is the amount of estimated liabilities for known claims not yet paid and incurred but not reported claims.
Insurance Information (cont'd)
Rate
The pricing factor upon which the insurance buyer's premium is based.
Rated Policy
Sometimes called an "extra-risk" policy, an insurance policy issued at a higher-than-standard premium rate to cover the extra risk where, for example, an insured has impaired health or a hazardous occupation.
Ratemaking
The statistical process by which insurers determine risks and pricing for the basic classes of insurance.
Rating Territory
A geographical grouping in which like hazards tend to equalize and permit the establishment of an equitable rate for the territory.
Reasonable and Customary Charge
A charge for health care, which is consistent with the going rate or charge in a certain geographical area for identical or similar services.
Rebating
Giving any valuable consideration, usually all or part of the commission, to the prospect or insured as an inducement to buy or renew. Rebating is prohibited by law.
Recurring Claim Provision
A provision in some health insurance policies which specifies a length of time during which the recurrence of a condition is considered to be a continuation of a previous period of disability or hospital confinement.
Recurring Clause
A provision in some health insurance policies, which specifies a period of time during which the recurrence of a condition is considered a continuation of a prior period of disability or hospital confinement.
Reduced Paid-up Insurance
A form of insurance available as a nonforfeiture option. It provides for continuation of the original insurance plan, but for a reduced amount.
Regulation
Supervision of business practices by a governmental entity.
Rehabilitation
(1) Restoration of a totally disabled person to a meaningful occupation, (2) a provision in some long- term disability policies that provides for continuation of benefits or other financial assistance while a totally disabled insured is retraining or attempting to resume productive employment.
Reimbursement
The payment of the expenses actually incurred as a result of an accident or sickness, but not to exceed any amount specified in the policy.
Reinstatement
The resumption of coverage under a policy which has lapsed.
Reinsurance
Assumption by one insurance company of all or part of a risk undertaken by another insurance company.
Reinsurance Facility
An alternative mechanism to service those insureds that cannot obtain insurance in the voluntary market. Premiums and losses for the business that is ceded to the facility are pooled and all insurers share according to their proportion of the voluntary market.
Renewable Term Insurance
Term insurance which can be renewed at the end of the term, at the option of the policyholder and without evidence of insurability, for a limited number of successive terms. The rates increase at each renewal as the age of the insured increases.
Renewal
Continuance of coverage under a policy beyond its original term by the insurer's acceptance of the premium for a new policy term.
Renter's Policy
A package type of insurance that includes coverage similar to a homeowners policy to cover the personal property of a renter or tenant in a building.
Replacement
The substitution of health insurance coverage from one policy contract to another.
Replacement Cost
The cost to repair or replace property at construction costs prevailing at time of loss; the cost to repair or rebuild property without considering depreciation. (See Actual Cash Value)
Replacement ratio
The percentage of income before retirement that is required to be replaced to maintain the same standard of living after retirement.
Representation
Statements made by an applicant in the application, which he represents as being substantially true to the best of his knowledge and belief, but which are not warranted as exact in every detail.
Rescission
Termination of an insurance contract by the insurer on the grounds of material misstatement on the application for insurance. The action of rescission must take place within the contestable period or Time Limit on Certain Defenses but takes effect as of the date of issue of the policy, thus voiding the contract from its inception.
Reservation of Rights
An arrangement whereby an insurer defends a case without commitment to provide coverage in the event that the facts disclosed during the trial reveal that the occurrence is not covered.
Reserve
(1) An amount representing liabilities kept by an insurer to provide for future commitments under policies outstanding. (2) An amount allocated for a special purpose. Note that a reserve is usually a liability and not an extra fund.
Residual Disability
A period of partial disability that immediately follows a period of total disability. Benefits for residual disability are paid on a pro-rata basis, depending on the percentage of earnings loss.
Residual Disability Benefits
A provision in an insurance policy that provides benefits in proportion to a reduction of earnings as a result of disability, as opposed to the inability to work full-time.
Residual Market
A system through which insurance is made available to buyers that represent unusually high risks.
Retention
The net amount of risk retained by an insurance company for its own account or that of specified others, and not reinsured.
Retrocession
The process by which a reinsurer obtains reinsurance from another company.
Retrospective Date
The first date for which claims will be paid under a claims-made policy of liability insurance.
Retrospective Rating
Rating procedure which allows adjustment of an insured's final rate on the basis of the insured's own loss experience.
Revocable Trust
A trust that can be terminated or revoked by its creator.
Rider
A special policy provision or group of provisions that may be added to a policy to expand or limit the benefits otherwise payable.
Right of Survivorship
At the death of one co-owner of property, that person's interest in the property automatically passes to the surviving joint tenant or tenants.
Risk
The chance of loss. Also used to refer to the insured or to property covered by a policy. A term used to refer to a person or the peril insured.
Risk Classification
The process by which a company decides how its premium rates for life insurance should differ according to the risk characteristics of individuals insured (e.g., age, occupation, sex, state of health) and then applies the resulting rules to individual applications. (See - Underwriting)
Risk Control
Any conscious action (or decision not to act) intended to reduce the frequency, severity, or unpredictability of accidental losses.
Risk Retention Group
An alternative form of insurance in which members of a similar profession or business band together to self insure their risks.
Robbery
The taking of property from a person by force or threat of violence.
Rollover
Transfer of IRA or other qualified pension funds from one financial institution (trustee) to another.
Rate
The pricing factor upon which the insurance buyer's premium is based.
Rated Policy
Sometimes called an "extra-risk" policy, an insurance policy issued at a higher-than-standard premium rate to cover the extra risk where, for example, an insured has impaired health or a hazardous occupation.
Ratemaking
The statistical process by which insurers determine risks and pricing for the basic classes of insurance.
Rating Territory
A geographical grouping in which like hazards tend to equalize and permit the establishment of an equitable rate for the territory.
Reasonable and Customary Charge
A charge for health care, which is consistent with the going rate or charge in a certain geographical area for identical or similar services.
Rebating
Giving any valuable consideration, usually all or part of the commission, to the prospect or insured as an inducement to buy or renew. Rebating is prohibited by law.
Recurring Claim Provision
A provision in some health insurance policies which specifies a length of time during which the recurrence of a condition is considered to be a continuation of a previous period of disability or hospital confinement.
Recurring Clause
A provision in some health insurance policies, which specifies a period of time during which the recurrence of a condition is considered a continuation of a prior period of disability or hospital confinement.
Reduced Paid-up Insurance
A form of insurance available as a nonforfeiture option. It provides for continuation of the original insurance plan, but for a reduced amount.
Regulation
Supervision of business practices by a governmental entity.
Rehabilitation
(1) Restoration of a totally disabled person to a meaningful occupation, (2) a provision in some long- term disability policies that provides for continuation of benefits or other financial assistance while a totally disabled insured is retraining or attempting to resume productive employment.
Reimbursement
The payment of the expenses actually incurred as a result of an accident or sickness, but not to exceed any amount specified in the policy.
Reinstatement
The resumption of coverage under a policy which has lapsed.
Reinsurance
Assumption by one insurance company of all or part of a risk undertaken by another insurance company.
Reinsurance Facility
An alternative mechanism to service those insureds that cannot obtain insurance in the voluntary market. Premiums and losses for the business that is ceded to the facility are pooled and all insurers share according to their proportion of the voluntary market.
Renewable Term Insurance
Term insurance which can be renewed at the end of the term, at the option of the policyholder and without evidence of insurability, for a limited number of successive terms. The rates increase at each renewal as the age of the insured increases.
Renewal
Continuance of coverage under a policy beyond its original term by the insurer's acceptance of the premium for a new policy term.
Renter's Policy
A package type of insurance that includes coverage similar to a homeowners policy to cover the personal property of a renter or tenant in a building.
Replacement
The substitution of health insurance coverage from one policy contract to another.
Replacement Cost
The cost to repair or replace property at construction costs prevailing at time of loss; the cost to repair or rebuild property without considering depreciation. (See Actual Cash Value)
Replacement ratio
The percentage of income before retirement that is required to be replaced to maintain the same standard of living after retirement.
Representation
Statements made by an applicant in the application, which he represents as being substantially true to the best of his knowledge and belief, but which are not warranted as exact in every detail.
Rescission
Termination of an insurance contract by the insurer on the grounds of material misstatement on the application for insurance. The action of rescission must take place within the contestable period or Time Limit on Certain Defenses but takes effect as of the date of issue of the policy, thus voiding the contract from its inception.
Reservation of Rights
An arrangement whereby an insurer defends a case without commitment to provide coverage in the event that the facts disclosed during the trial reveal that the occurrence is not covered.
Reserve
(1) An amount representing liabilities kept by an insurer to provide for future commitments under policies outstanding. (2) An amount allocated for a special purpose. Note that a reserve is usually a liability and not an extra fund.
Residual Disability
A period of partial disability that immediately follows a period of total disability. Benefits for residual disability are paid on a pro-rata basis, depending on the percentage of earnings loss.
Residual Disability Benefits
A provision in an insurance policy that provides benefits in proportion to a reduction of earnings as a result of disability, as opposed to the inability to work full-time.
Residual Market
A system through which insurance is made available to buyers that represent unusually high risks.
Retention
The net amount of risk retained by an insurance company for its own account or that of specified others, and not reinsured.
Retrocession
The process by which a reinsurer obtains reinsurance from another company.
Retrospective Date
The first date for which claims will be paid under a claims-made policy of liability insurance.
Retrospective Rating
Rating procedure which allows adjustment of an insured's final rate on the basis of the insured's own loss experience.
Revocable Trust
A trust that can be terminated or revoked by its creator.
Rider
A special policy provision or group of provisions that may be added to a policy to expand or limit the benefits otherwise payable.
Right of Survivorship
At the death of one co-owner of property, that person's interest in the property automatically passes to the surviving joint tenant or tenants.
Risk
The chance of loss. Also used to refer to the insured or to property covered by a policy. A term used to refer to a person or the peril insured.
Risk Classification
The process by which a company decides how its premium rates for life insurance should differ according to the risk characteristics of individuals insured (e.g., age, occupation, sex, state of health) and then applies the resulting rules to individual applications. (See - Underwriting)
Risk Control
Any conscious action (or decision not to act) intended to reduce the frequency, severity, or unpredictability of accidental losses.
Risk Retention Group
An alternative form of insurance in which members of a similar profession or business band together to self insure their risks.
Robbery
The taking of property from a person by force or threat of violence.
Rollover
Transfer of IRA or other qualified pension funds from one financial institution (trustee) to another.
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