Specialized financial instruments that transfer a specific set of insured catastrophe risks (e.g., hurricanes, earthquakes) from an insurer or reinsurer to investors in the capital markets. They are a tool for hedging… Catastrophe Risk Bonds (Cat Bonds):

    For complex commercial risks, brokers move from merely selling a product to acting as a risk management consultant, advising the client on loss prevention, contractual risk transfer, and non-insurance solutions before placing coverage

    A contract sold by an insurance company designed to provide a steady stream of payments to the individual, typically starting at a future date. While not insurance in the traditional sense, they are… Annuities

    A provision in a policy (usually property insurance) that outlines a procedure for resolving disputes between the insurer and the insured regarding the amount of the loss, generally involving each party appointing an… Appraisal Clause

      ACV: The payout amount for a loss, calculated as the cost to replace the property minus depreciation. This is common for older items.   RCV: The payout amount calculated as the cost… Actual Cash Value (ACV) vs. Replacement Cost Value (RCV):

    Warranties: Strict promises made by the insured in the policy concerning the risk (e.g., a commercial building has working sprinklers). A breach of a warranty, even if immaterial to the loss, can void… Warranties vs. Representations

    The portion of premium revenue that an insurance company has collected but not yet “earned” because the policy period has not yet expired. It is recorded as a liability on the balance sheet… Unearned Premium Reserve

        The professional hired by the insurer to investigate a loss, determine the company’s liability, and settle the claim. They assess the damage and negotiate the final payout amount with the policyholder