(i) Restoration, automatically or on application of the full amount of a Policy contract following a loss; in some cases additional premium is required. (ii) The restoration of damaged property to its original condition or, in some cases, replacement by a new property.
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UK: 1. A reinstatement condition attached to a commercial property policy to provide that a claim may be based on full repair or replacement cost without deduction for depreciation subject to certain conditions. Many household policies contain a reinstatement clause allowing ‘new for old’ settlements subject to conditions and excluded forms of property. Where a ‘new’ item is superior to an ‘old’ item the insurer, commercial or household, may replace it provided the insured contributes to the ‘betterment’. 2. Most property policies give the insurer the option to settle a claim by money, repair, reinstatement or replacement. Once the insurer opts for reinstatement it becomes an obligation to restore the property substantially to its pre-loss conditions even if its means exceeding the sum insured. 3. Following a claim, the sum insured or limit of indemnity is reduced by the amount concerned. A ‘reinstatement of sum insured (or limit of indemnity) clause’ automatically restores the sum insured after a loss. See REINSTATEMENT AVERAGE.
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UK: re-establishment of the sum insured to its original figure after it has been reduced by the amount of a loss payment, usually in return for the payment of an additional premium.
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The restoring of a lapsed policy to full force and effect. The reinstatement may be effective after the cancellation date, creating a lapse of coverage. Some companies require evidence of insurability and payment of past due premiums plus interest.
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The resumption of a policy which has lapsed.
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US: The resumption of coverage under a policy which has lapsed.
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MEDICAL,USA: To restore an insured to an active status that has been canceled for insurance coverage. This may be with or without continuation of medical benefits. Also see automatic reinstatement clause .
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UK,reinsurance: A reinsurance clause restoring cover to the level existing prior to the occurrence of a loss. The number of reinstatements to be allowed is usually negotiated when the treaty is placed. Reinstatements may be free or charged at a percentage of the treaty premium. Reinstatement applies mainly to risk excess of loss treaties covering property, marine and aviation business, and all forms of catastrophe excess of loss treaties.
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reinsurance: Re-effecting a catastrophe reinsurance policy that has already paid out for one loss caused by a catastrophe. This is usually done because of payment of a premium, known as a reinstatement premium.