Refers to an insurer’s cancellation and reissuance of the same policy. Typically used to switch a policy renewal to a new date.
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Refers to an insurer&#8217s cancellation and reissuance of the same policy. Typically used to switch a policy renewal to a new date.

An exclusion common to several forms of liability insurance, which eliminates coverage with respect to damage to property in the insured’s care, custody, or control. Coverage for this exposure is available under other, more specific forms of insurance, such as motor truck cargo and garagekeepers insurance. In some cases, CCC has been determined to entail physical possession of the property; in others, any party with a legal obligation to exercise care with respect to property has been deemed to have that property in its CCC.

US: A severe loss characterized by extreme force and/or sizable financial loss. Often abbreviated to “cat.”
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A sudden and severe calamity or disaster. A single event which causes a loss of extraordinary large amount. The exact definition may vary occasionally and is usually dependent on policy contract wordings e.g., it might mean all losses, in a 72 hours period, arising from a wind storm.
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A sudden and widespread disaster. FEMA definition: “… Any natural or manmade incident, including terrorism, that results in extraordinary levels of mass casualties, damage or disruption severely affecting the population, infrastructure, environment, economy, national morale, and or government functions. Compared to disaster, in a catastrophe most or all of the community built structure is heavily impacted; most, if not all, of the everyday community functions are sharply and simultaneously interrupted and help from nearby communities cannot be provided.
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UK: an event leading to substantial losses, such as an explosion, hurricane or earthquake.
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“Catastrophe is a statistical term that refers to a single event or a series of closely related events that causes property losses of more than a certain amount, currently $25 million. Examples of catastrophes are World Trade Center terrorist attack and Hurricane Katrina. The probability of a catastrophe is known as the catastrophe factor. It is based on the total number of catastrophes in a given geographic area over a 40-year period. Insurance companies have several methods to financepotential catastrophes: catastrophe bonds, catastrophe deductible, and catastrophe reinsurance. Each is discussed below.
Catastrophe Bond

Also known as “”cat”” bonds and “”event-linked securities,”” these bonds are issued by a “”sponsor”” (usually an insurance or reinsurance company) in order to transfer some or all of the risk of a catastrophic loss. The purchaser of the catastrophe bonds receives regular interest payments for the term of the bond and the principal when the bond matures. However, a catastrophic event occurs, the insurance company uses the bond principal to pay losses and the bondholder receives nothing. Because of the relatively high potential for loss of principal, these bonds often pay a high rate of interest.

Catastrophe Deductible

Property owners in areas with a high probability of catastrophes often have a higher deductible for catastrophic events. For example, a homeowner in an area susceptible to hurricanes may have a $500 deductible for most insured events but a $10,000 deductible for hurricanes. The catastrophe deductible allows insurance companies to write more insurance in these areas.

Catastrophe Reinsurance

This reinsurance is designed to absorb the large losses caused by hurricanes, earthquakes, and terrorist attacks. Losses are spread among thousands of insurers that operate around the globe.”
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US: Event which causes a loss of extraordinary magnitude, such as a hurricane or tornado.
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MEDICAL,USA: Single incident or many related incidents that cause property loss to insureds.
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UK: The possibility of exceptionally heavy loss due to an occurrence, often of short duration, e.g. Hurricane Betsey. Most occurrences are natural disasters, but certain ‘catastrophic events, e.g. downfall of Barings Bank, have been man-made. See CATASTROPHE BONDS; CATASTROPHE EXCESS OF LOSS.

Form added to commercial property insurance policy that indicates the causes of loss that are covered. There are four causes-of-loss forms: basic, broad, special, and earthquake.

Professional who has attained a high degree of technical competency in property and liability insurance and has passed ten professional examinations administered by the American Institute for Property and Liability Underwriters.

Allows auto insureds the choice of remaining under the tort system or choosing no-fault at a reduced premium.

Person who settles claims: an agent, company adjustor, independent adjustor, adjustment bureau, or public adjustor.

A form of reinsurance under which the date of the claim report is deemed to be the date of the loss event. Claims reported during the term of the reinsurance agreement are therefore covered, regardless of when they occurred. A claims-made agreement is said to “cut off the tail” on liability business by not covering claims reported after the term of the reinsurance agreement—unless extended by special agreement.

US: 1) A provision under which an insured who carries less than the stipulated percentage of insurance to value, will receive a loss payment that is limited to the same ratio which the amount of insurance bears to the amount required; 2) a policy provision frequently found in medical insurance, by which the insured person and the insurer share the covered losses under a policy in a specified ratio, i.e., 80 percent by the insurer and 20 percent by the insured.
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MEDICAL,USA: 1. A cost-sharing requirement under a health insurance policy providing that the insured will assume a percentage of the costs for covered services. Also referred to as coinsurance payment, copayment, cost sharing, or percentage participation. 2. In the Medicare program, the amount that Medicare will not pay. The Medicare beneficiary or the beneficiary’s supplemental insurance plan is responsible for the yearly cash deductible and the portion of the reasonable charges (20%). 3. In the Medicaid Qualified Medicare Beneficiary (MQMB) program, the amount of payment that is above the rate that Medicare pays for medical services. The state assumes responsibility for payment of this amount.
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Coinsurance has two rather distinct meanings depending on whether it is being used in property insurance or health insurance.Property InsurancePolicyholders are usually required to carry an amount of insurance that is at least a certain percentage of the total value of the property (often 80%). The purpose of this requirement is that most property losses are small and, therefore, most policyholders would carry only a small amount of insurance to cover expected claims. To counter this, insurance companies require 80% of value or more and penalize policyholders who carry less than 80% when a claim is made.

For example, if an insured has a $100,000 building, is required to carry at least $80,000 of coverage (80%) but insures for only $60,000, there will be a penalty when there is a claim. If the claim is for $50,000 the insurance company will use the “”did over should”” fraction to determine the amount to be paid. The insured carried $60,000 but should have carried at least $80,000. Thus, $60,000/$80,000 equals 75%. The company calculates the settlement as follows: .75 x $50,000 = $37,500. The insured suffers a $12,500 penalty for not insuring to 80% of value. The $12,500 is the insured’s coinsurance.

Health Insurance

For health insurance, the coinsurance is the percentage of covered health costs the insured will pay in a year after the deductible. For example, if the coinsurance provision of the health policy is 20% the insured will pay this percentage of covered claims and the insurance company will pay 80%. Usually there is a ceiling or a maximum the insured will be “”out-of-pocket.”” At that point the insurance company pays 100% for the balance of the year.

For example, after a $500 deductible, the insured pays 20% until the claims total $5,500. At this point the insured is out the $500 deductible and another $1,000 (20% of $5,000). If the policy states that the maximum out-of-pocket is $1,500, then the insurance company begins to pay 100% of covered claims for the remainder of the year.

US: A form of automobile insurance that provides for reimbursement for loss to a covered automobile due to its colliding with another vehicle or object or the overturn of the automobile. This covers only damage to the automobile itself as “auto” is defined in the policy.
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A form of automobile insurance that provides for reimbursement for loss to a covered automobile due to its colliding with another vehicle or object or the overturn of the automobile. This covers only damage to the automobile itself as &#8220auto&#8221 is defined in the policy.
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Insurance against loss to the insured property caused by striking or being struck by an object: including loss caused by upset.
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MEDICAL,USA: Optional automobile insurance coverage that pays for damages to the insured’s car caused by a collision with another car or object or by rolling the car over. Frequently this type of insurance is required if an individual has taken out a car loan.
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US: Protection against loss resulting from any damage to the policyholder’s car caused by collision with another vehicle or object, or by upset of the insured car, whether it was the insured’s fault or not.