The (impermissible) act by a broker, when closing a placing, or allotting to an underwriter a larger line than the underwriter has written.
Insurance Encyclopedia
Over Insurance
Insuring property for more than its value. May be inadvertent or fraudulent.
Over Insured
A term used to describe the condition that exists when an insured has purchased coverage for more than the actual cash value or replacement cost of a subject of insurance. It is also used to describe a situation where so much insurance is in force as to constitute a moral or morale hazard, such as having so much Disability Income Insurance in force that it becomes profitable to be disabled.
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When an individual has coverage for more than the value of item that is insured. This term can also refer to an individual who has so much insurance it poses a moral hazard; for example, a person who has so much disability insurance that they exaggerate symptoms to linger on disability status.
Over placing
The action of a broker in obtaining acceptances of lines on an insurance which exceed 100% of the insurance offered.
Over Subscription Clause
In Lloyd’s practice it is common for a broker to obtain subscriptions from underwriters for more than 100 per cent for a proposed insurance. The share of each syndicate in the insurance is then reduced proportionately.
Over the Counter Selling
A non-agency system of selling Insurance in which the insured obtains his Insurance by going to the Insurance Company and purchasing it.
Over-age additional premium
Additional premium on an open cover applied to a cargo which is carried by a vessel over 15 years old or which is outside the scope of the classification clause. It may also be applied for breach of navigational warranties (Institute Warranties where the ship is over 15 years.
Over-insurance
Insuring property for more than its actual value. It can be inadvertent or fraudulent. The penalties for under-insurance can cause the insured to over insure but the use of declaration policies enables insureds with fluctuating sums insured to overcome the problem.
Over-Line
The amount of insurance or reinsurance that exceeds the insurer’s or reinsurer’s normal capacity. This is inclusive of automatic reinsurance facilities.
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An amount of insurance or reinsurance that exceeds the normal capacity of the insurer or reinsurer after allowing for automatic reinsurance facilities. An insurer who finds himself with more risk than he considers it prudent to bear is said to be over lined.
Over-Riding Commission
Additional commission paid by a reinsurer to an insurer ceding proportional business, as a contribution towards expenses. The term is often used on primary business written through agents or brokers and refers to any addition to basic commission rates either for volume or profitable business.