Insurance Definitions

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 Q

QUALIFIED PLAN:  A plan under which contributions by the employer are allowed as a deduction from taxable income, and which provides that the deposits for his employees' future benefits are not to be considered as taxable income to them in the year in which they are made.

R

RATING BUREAU:   An organization that classifies and promulgates and in some cases compiles data and measures hazards of individual risks in terms of rates in a given territory.

RECOVERY:   Amount recovered from a third party responsible for a loss on which a claim has been paid.

REBATE:  A reduction of a premium.

REIMBURSEMENT:   Payment of an amount of money related to the amount of loss to or on behalf of the insured upon the occurrence of a defined loss.

REINSTATEMENT:   (1) Putting a lapsed policy back in force; (2) The payment of a claim under some forms of insurance reduces the principal amount of the policy by the amount of the claim. Provision is usually made for a method of reinstating the policy to its original amount.

REINSURANCE:  (1) A contract of indemnity against liability by which the insurance company procures another insurance to insure against loss or liability by reason of the original insurance; (2) Insurance by one insurance company of all or part of a risk accepted by it with another insurance company which agrees to reimburse the insurance company for the portion of the claim insured.

REPLACEMENT CLAUSE:   A clause limiting Underwriters' liability for damage to machinery cargo.

REPLACEMENT COST:   The cash value representing what it would cost to replace the specific property without deduction for depreciation.

REPORTING FORM:   Fire or other direct damage insurance written under a form of policy that covers fluctuating values of stocks of merchandise, furniture and fixtures and improvements by means of periodic reports submitted to the insurance company by the insured, with an annual adjustment of premium on the average value.

RETROACTIVE DATE:   Date on a "claims made" liability policy which triggers the beginning of insurance coverage. A retroactive date is not required. If one is shown on a policy, any claim made during the policy period will not be covered if the loss occurred before the retroactive date.

RIDER:  An endorsement to an insurance policy that modifies clauses and provisions of the policy, adding or excluding coverage(s).

RISK:   A fortuity. A term used to designate an insured of a peril insured against. It does not embrace inevitable loss. The term is used to define causes of loss covered by a policy.