RAIN INSURANCE – Insurance against loss of expense incurred or of income expected caused by reduction or patronage of sales or other events by rain, hail, snow, or sleet.
RATE – The unit cost of insurance.
RATING BUREAU – An organization that classifies risks and promulgates rates, usually on the basis of statistical data compiled by the Bureau or of an inspection of risks made by it.
REAL ESTATE/REAL PROPERTY – Land and buildings attached to it.
REGISTERED MAIL INSURANCE – Insurance against loss of certain types of intangible property while in charge of the Post Office Department as registered mail.
REINSTATEMENT – The re–establishment of a policy to its original value where its protection is reduced by the payment of a claim.
REINSURANCE – The placing of insurance by one insurer with another insurer for part or all of a risk.
RELEASE – To give up, abandon and discharge a claim, or an enforceable right against another firm or corporation.
RENEWAL – A policy issued to renew one that is expiring.
RENT/RENTAL VALUE INSURANCE – Insurance that provides indemnity for the loss of rents of a building or if occupied by the owner the rental's value of the property.
REPLACEMENT COST INSURANCE – Insurance under which the loss payable is the replacement cost of the property. The excess over the depreciated replacement cost is payable only if the property is actually replaced.
REPLACEMENT VALUE – The cost to replace something with like kind, quality and capacity.
REPORTING CONTRACT – An insurance contract covering stocks of goods and often other types of property, which total value fluctuates, in their actual amounts, these amounts being reported periodically by the insured, and the premium being based on the reported values.
REPRESENTATION – Oral or written statement made by or on behalf of the applicant or insured concerning existing facts which serve as a basis for writing of insurance.
REPRODUCTION COST – Cost to replace an identical property at the same location.
RESERVATION OF RIGHTS – Act of an insurer to notify an insured it retains the right to affirm or deny its liability when coverage for a claim appears questionable.
RESERVE – A fund set aside to meet some future obligation. More specifically, with insurance, refers to funds earmarked for specific purposes; e.g., reserve for unearned premiums, reserves for losses in process of adjustment.
RESTORATION PREMIUM – The premium charged to restore a policy or bond to its original value after payment of a loss.
RETROACTIVE EXTENSION – Extending into the period of prior insurance, the terms (except amount) of the present coverage.
RETROACTIVE RESTORATION – A provision in a policy or bond whereby, after payment of loss, the original amount of coverage is automatically restored to take care of prior undiscovered losses as well as future losses.
RETROSPECTIVE RATING – A method of rating that adjusts the final premium of a risk in accordance with the experience of that risk during the term of the policy for which the premium is paid. Usually the adjustment is subject to maximum and minimum limits.
RETURN PREMIUM – The amount due the insured if a policy is reduced in rate, reduced in amount, or canceled.
RIDER – (See also ENDORsem*nT)
RIOT AND CIVIL COMMOTION – A tumultuous disturbance of public peace. The exact number needed for a riot is given by individual state law.
RIOT AND CIVIL COMMOTION INSURANCE – (1) Contractual protection from loss caused by riot, strikes, insurrection, and civil commotions; (2) Insurance against loss due to the violent and tumultuous action of three (in one state, two) or more persons.
RISK – (1) Any chance of loss; (2) Uncertainty; (3) The insured or the property or object to which the insurance policy relates.
RISK CONTROL – Techniques or programs used to reduce or eliminate the chance of loss and to reduce the total amount of loss should an event occur that results in a fortuitous loss.
RISK FINANCING – Techniques or methods of providing funds to pay for losses that occur.
RISK MANAGEMENT – The aggregate activity of an organization to manage or coordinate risk control and risk financing programs, including the identification and evaluation of exposures.
ROBBERY – The unlawful taking of property by violence, force, or intimidation.
RUNNING DOWN CLAUSE – A term in ocean marine insurance that refers to the collision of a vessel with another object.
FAQs
What is the definition of risk in insurance terms? ›
Definition of 'risk' in insurance is the "uncertainty of the occurrence of an event that can cause economic losses".
What is it called when insurance pays you? ›Insurance proceeds are benefit proceeds paid out by any insurance policy as a result of a claim. Insurance proceeds are paid out once a claim has been verified, and they financially indemnify the insured for a loss that is covered under the policy.
What is risk and how risk is determined in life insurance? ›Life insurance risk class is a way for insurers to assess how likely you are to die during the term of a life insurance policy. There are four main risk classes: preferred plus, preferred, standard plus, and standard. Your risk class is determined by factors like your age, health, occupation, and lifestyle.
What is insurance in basic terms? ›Insurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursem*nt against losses from an insurance company. The company pools clients' risks to make payments more affordable for the insured.
What is the basic risk of insurance? ›Insurance basis represents the unintended mismatch between insurance coverage and losses incurred for which the policyholder believes coverage should exist. Examples of insurance basis can be most frequently seen arising from disputed insurer denials of coverage for losses.
What is risk in simple terms? ›In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environment), often focusing on negative, undesirable consequences.
What is called when you pay for insurance? ›An insurance premium is the amount of money an individual or business pays for an insurance policy. Insurance premiums are paid for policies that cover healthcare, auto, home, and life insurance. Once earned, the premium is income for the insurance company.
What is the amount of money paid for an insurance policy? ›Premium. The amount of money that you are charged to purchase or maintain your insurance coverage.
What is money that a person pays to an insurance company for a policy called? ›Premium. The amount of money an insurance company charges for insurance coverage. Premium Financing. A policyholder contracts with a lender to pay the insurance premium on his/her behalf. The policyholder agrees to repay the lender for the cost of the premium, plus interest and fees.
What risks Cannot be insured? ›An uninsurable risk could include a situation in which insurance is against the law, such as coverage for criminal penalties. An uninsurable risk can be an event that's too likely to occur, such as a hurricane or flood, in an area where those disasters are frequent.
Who calculates risk in insurance? ›
actuary, one who calculates insurance risks and premiums. Actuaries compute the probability of the occurrence of various contingencies of human life, such as birth, marriage, sickness, unemployment, accidents, retirement, and death.
What is a risk code in insurance? ›The risk codes scheme provides a common basis for the classification/description of risks so that: • All underwriters on a particular risk use the same description and • So far as is practical, risks are described consistently.
What is insurance in one words? ›The literal meaning of insurance would be an assurance against unforeseen and unfortunate loss. This means, that if you encounter a less than normal event in your normal course of life, and happen to incur a financial loss because of it, you can be compensated.
What are the three principles of insurance? ›- Insurable Interest.
- Utmost Good Faith.
- Principle of Indemnity.
Insurance is a legal agreement between two parties – the insurer and the insured, also known as insurance coverage or insurance policy. The insurer provides financial coverage for the losses of the insured that s/he may bear under certain circ*mstances.
What does risk mean in terms of short term insurance? ›Specifically, in the short-term insurance industry, when we talk about risk we mean the potential to make a financial loss from an unexpected event (such as a burglary or accident). The financial loss can be for anything; indeed, there is insurance available for almost any loss you may suffer that you can imagine.
What does insurance on risk mean? ›Your buildings insurance should be placed 'on risk' from the point of Exchange of Contracts. This is because Exchange if Contracts, also known as the point of no return, makes the transaction legally binding. Essentially, you are, therefore, legally bound to purchase the property on the date agreed in the Contract.
What does all risk mean in insurance? ›"All risks" insurance (also referred to as open peril insurance) refers to a type of insurance coverage that automatically covers any risk that the contract does not explicitly omit. You can find all risks insurance in a variety of industries. Examples include agriculture, business, machinery, and real estate.
What is another word for risk in insurance? ›Three terms in particular can sometimes cause a lot of confusion for policyholders: Risk, peril, and hazard. That's because at first glance they're very similar to each other, and in our everyday speech, we might even use them interchangeably.