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
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Section of an insurance company that sells through brokers. Some brokerage departments are self-contained in that they have their own underwriting and marketing staffs. Brokerage ...
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Financial analysis method established by the national association of insurance commissioners (naic) to detect problems of property and casualty insurance companies and life and health ...
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Maximum amount of insurance coverage that an underwriter will write on a particular class of property or risk exposure. ...
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Physical handing of an insurance policy to the insured. Sales training emphasizes the importance of delivery of a policy by the agent. This develops a caring attitude on the part of the ...
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