An exclusion that prevents a reinsurer’s over-lining on a single large risk (usually excess of $250 million) caused by a potential accumulation of property limits from two or more ceding companies. The customary exception to the exclusion applies to risks insured 100 percent by one insurer or specifically listed classes (such as apartments, offices, hotels, hospitals, etc.).
Tag: RAW
Total loss
A loss of sufficient size so that it can be said there is nothing left of value. The complete destruction of the property. The term is also used to mean a loss requiring the maximum amount a policy will pay.
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A term used to refer to a claim for a loss equal to the maximum benefit the policy will pay. More often, this term is used to refer to a loss in which the property is completely destroyed, to the point where nothing of value can be salvaged.
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UK: Subject-matter of insurance is lost, destroyed or damaged beyond economic repair. See actual total loss and constructive total loss.
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UK: the complete loss or destruction of all the property insured under a particular policy.
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Total loss may be either actual or constructive. There is an actual total loss when the subject-matter insured is destroyed or so damaged as to cease to be a thing of the kind insured, or when the insured is irretrievably deprived of it. total loss is complete destroying or running of the property insured. In contrast constructive total loss is substantial, but less than physically complete, damage to property such that, if the property were to be repaired, the cost of repair would exceed the value of the property after repair.
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Where the subject matter of an insurance is lost, destroyed or damaged beyond repair.
Total loss of part
Marine cargo provision whereby the loss of whole package in loading or discharge or the loss of a whole craft load shall be treated as a total loss of that part of the cargo and consequently will not be subject to a franchise.
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A Marine cargo policy may provide that a loss of a whole package in loading or discharge or the loss of a whole craft load shall be treated as a total loss of that part of the cargo and hence will not be subject to a franchise.
Total Loss of Vessel
A Marine insurance policy on disbursements and the like may provide that the insurers shall pay only if the vessel is a total loss.
Total Loss Only
A term used in Marine Hull Insurance and reinsurance limiting cover to payment for a total loss. A clause is likely to define whether the cover is to include arranged or compromised total losses and whether sue and labour charges and salvage charges are recoverable.
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UK: Marine insurances, particularly hull facultative reinsurances, are sometimes arranged on the basis that the (re)insurer is liable only in the event of a total loss. Cover may or may not include arranged or compromised total losses, sue and labour charges, and salvage charges.
total net cost (TNC) method
Insurance policy cost comparison system that adds a policy’s premiums and subtracts dividends and cash value. TNC is not allowed by the National Association of Insurance Commissioners (NAIC) Model Life Insurance Solicitation Regulation because it does not consider the time value of money.
total quality management (TQM)
Operations management philosophy to continually improve performance, quality, and cost effectiveness by putting into operation employee involvement programs, self-directed work teams, flexible service delivery processes, quick changeover and adaptability, customer focus, supplier integration, and production cycle time reduction. Some health care organizations adopt TQM programs to meet competition. Also called continuous quality improvement (CQI) .
Total return swap
Term from the equity derivative markets to describe a swap under which one party pays all dividends received from, and the periodic appreciation in, a specified share and the other pays interest plus periodic depreciation in that share. The technique is now applied to credit derivatives as a means of selling the credit risk.
Total value
Sum of the three components (physician work, physician expense, malpractice costs), used in the formula to develop relative value units under the resource-based relative value scale for each medical service performed. These three relative value units (RVUs) are then adjusted according to geographical area and used in a formula to determine the resource-based relative value scale (RBRVS) for the Medicare fees published annually in the Federal Register .
Total-loss Only Insurance (TLO)
Property Insurance, most often used for ocean marine exposures, under which the Insurer pays only if a total loss occurs, and then for the full amount of the applicable Insurance. Thus, under a total-loss only Policy, the insured retains, or otherwise finances all partial losses.