In excess of loss reinsurance, the insurer fixes a point up to which he will retain losses for his own account (his retention). This is the excess point as losses above this level will be payable wholly or partly by the reinsurer up to a limit, the second excess point.
Insurance Encyclopedia
Excess Rain
Abnormally high rainfall intensities over short periods of time which cause direct physical damage to property (particularly underground property or mines) or crops and this may extent to secondary losses caused by saturation of soil.
Excess risk
Provision in an insurance policy designed to cut off the insurance company’s loss at a certain point. It may be an aggregate payable under the policy, maximum payable for any one disability, or the like. See stop loss .
Excess Value Policy
A Policy effected by an insured to protect himself where the value of a vessel stated on a Marine Hull Policy is less than its true value and the Insured may therefore incur liabilities, e.g., for salvage payments or general average contributions, in proportion to the under valuation.
Excess-surplus lines
See: surplus lines .
Excess, Compulsory Deductible
Portion of an otherwise insured loss borne by the insured. The amount or percentage is specified in the policy, usually in General Exclusions or as a special provision.
Excessive Heat
Excess heat caused by high temperature which may cause damage to certain types of property such as loss to crops at the pollination stage when excess heat will inhibit seed set.
Exchange of letters
See: INDIVIDUAL ARRANGEMENTS.
Exchange program
System that lets a proposed insured who is replacing a policy to obtain a new policy with little or no evidence of insurability if this was recently established by the company that issued the original policy.
Exchange Rate Risk
The potential loss arising out of transactions in two/more currencies.