Co-Insurance and Re-Insurance Flashcards
what is the formula for calculating co-insurance?
did / (value x coinsurance %) x loss = settlement
in the co-insurance formula, what is “did”?
the insurance amount
in the co-insurance formula, what is “value”?
what the property is worth
in the co-insurance formula, what is “coinsurance %”?
buffer zone, what they maybe should have insured for, based on home improvements or anything of the like
in the co-insurance formula, what is “loss”?
the claim amount
does coinsurance apply to a total loss?
no
when does the deductible come off the coinsurance?
after the calculation, and comes off of the settlement amount
what happens if the insured met the coinsurance % required by the insurer?
just will pay the whole claim, no coinsurance
coinsurance is NOT applied if the claim is less than both…
-2% of the limit of insurance (did)
AND $5000.
The whole claim would just be paid because its so small
coinsurance is…
a requirement that the insured maintains their insurance policy to a certain limit, and a potential penalty if they dont..
IS NEVER applicable to a policy which contains replacement cost if the building is being reconstructed.
if the claim is more than the insurance limit, this is just another way of saying it is a…
total loss
what is treaty reinsurance?
when a direct writer has established a CONTRACT with the same reinsurance company for every client
(if reinsurance is established on a contractual basis)
how does reinsurance work for direct writers?
insurance is basically stacked on top of insurance company’s coverage all by the same reinsurer
the coverage that the reinsurer provides is called…
excess liability coverage
what is reinsurance called when it is arranged on a case by case or risk by risk basis, and who deals with this type of reinsurance?
facultative reinsurance,
brokers
