Quote
-
A
statement of the premium that will be charged for insurance
coverages based on specific information provided by the person
requesting the quote including drivers, vehicles, and driving
record.
QUALIFIED ANNUITY - A form of annuity purchased
with pretax dollars as part of a retirement plan that benefits
from special tax treatment, such as a 401(k) plan.
Quasi-Insurance Institutions - A term sometimes
applied to government institutions created to carry out social
insurance arrangements that have some, but not all, the
characteristics of insurers. An example is the United States
Department of Health, Education, and Welfare.
Quick Assets - Assets
that are quickly convertible into cash.
Quid Pro Quo - Latin for
"this for that," or "one thing for another."
In insurance it could refer to the consideration in an
insurance contract which calls for the exchange of values by
both parties to the contract in order for it to be a valid
contract. See also Consideration.
Qualifying Event - An
occurrence that triggers an insured's protection.
Quick Assets - Assets
that are quickly convertible into cash.
Quick Liquidity Ratio -
Quick assets divided by net liabilities plus ceded reinsurance
balances payable. Quick assets are defined as the sum of cash,
unaffiliated short-term investments, unaffiliated bonds
maturing within one year, government bonds maturing within
five years, and 80% of unaffiliated common stocks. These
assets can be quickly converted into cash in the case of an
emergency.
Rate
-
Often used as a synonym for premium but actually refers to the
base rating units that are used to determine the final
premium.
Rating Plan -
The
rules that determine the cost of your insurance premium. These
rules modify the base rates by applying discounts and
surcharges based on your personal characteristics, for
example, using your seat belt, insuring more than one car.
Re-inspection -
A
review of an estimate or appraisal done by an adjuster during
or after repairs to a vehicle. This is done to guarantee the
accuracy of staff or independent auto damage personnel, and to
guarantee that the work required in an estimate or appraisal
is being completed by the body shop.
Release -
Written
acknowledgment stating that all obligations past, present, or
future, arising from a particular accident or occurrence, have
been fulfilled.
Renewal Date -
The
date that your insurance policy expires and the date that your
renewed policy will begin.
Renters insurance -
Insurance
that provides protection from losses that arise out of the
rental of a home. Protection covers losses to the insured's
property, not to losses that occur as a result of owning a
home.
Replacement Parts -
Several
types of parts may be used when your vehicle is repaired: new
parts, both original equipment manufacturer and after-market;
[link to definition] and recycled parts. New or after-market
parts will be used if we can't find like-kind and quality
recycled parts. A 5-year-old car, for instance, would be
repaired with parts at least as good as the parts that had
been in the car. We guarantee the after-market parts used for
these repairs for as long as you own the car.
Resident Adjuster -
Staff
adjuster who handles claims in remote areas of a region.
Rider -
In
motorcycle insurance, a rider is someone who will operate the
insured motorcycle.
Risk -
The
chance of suffering a loss.
RISK MANAGEMENT - Management of the varied
risks to which a business firm or association might be
subject. It includes analyzing all exposures to gauge the
likelihood of loss and choosing options to better manage or
minimize loss. These options typically include reducing and
eliminating the risk with safety measures, buying insurance,
and self-insurance.
RISK
RETENTION GROUPS - Insurance companies that band
together as self-insurers and form an organization that is
chartered and licensed as an insurer in at least one state to
handle liability insurance.
RISK-BASED
CAPITAL - The need for insurance companies to be
capitalized according to the inherent riskiness of the type of
insurance they sell. Higher-risk types of insurance, liability
as opposed to property business, generally necessitate higher
levels of capital.
RESIDUAL MARKET - Facilities, such as assigned
risk plans and FAIR Plans, that exist to provide coverage for
those who cannot get it in the regular market. Insurers doing
business in a given state generally must participate in these
pools. For this reason the residual market is also known as
the shared market.
RETENTION
- The amount of risk retained by an insurance
company that is not reinsured.
RETROCESSION - The
reinsurance bought by reinsurers to protect their financial
stability.
RETROSPECTIVE
RATING - A method of permitting the final premium
for a risk to be adjusted, subject to an agreed-upon maximum
and minimum limit based on actual loss experience. It is
available to large commercial insurance buyers.
RETURN ON EQUITY - Net
income divided by total equity. Measures profitability by
showing how efficiently invested capital is being used.
RATING AGENCIES - Six major credit agencies
determine insurers’ financial strength and viability to
meet claims obligations. They are A.M. Best Co.; Duff &
Phelps Inc.; Fitch, Inc.; Moody’s Investors Services;
Standard & Poor’s Corp.; and Weiss Ratings, Inc.
Factors considered include company earnings, capital adequacy,
operating leverage, liquidity, investment performance,
reinsurance programs, and management ability, integrity and
experience. A high financial rating is not the same as a high
consumer satisfaction rating.
RATING BUREAU - The
insurance business is based on the spread of risk. The more
widely risk is spread, the more accurately loss can be
estimated. An insurance company can more accurately estimate
the probability of loss on 100,000 homes than on ten. Years
ago, insurers were required to use standardized forms and
rates developed by rating agencies. Today, large insurers use
their own statistical loss data to develop rates. But small
insurers, or insurers focusing on special lines of business,
with insufficiently broad loss data to make them actuarially
reliable depend on pooled industry data collected by such
organizations as the Insurance Services Office (ISO) which
provides information to help develop rates such as estimates
of future losses and loss adjustment expenses like legal
defense costs.
REAL
ESTATE INVESTMENTS - Investments generally owned by
life insurers that include commercial mortgage loans and real
property.
RECEIVABLES -
Amounts owed to a business for goods or services provided.
REDLINING -
Literally means to draw a red line on a map around areas to
receive special treatment. Refusal to issue insurance based
solely on where applicants live is illegal in all states.
Denial of insurance must be risk-based.
REINSURANCE - Insurance
bought by insurers. A reinsurer assumes part of the risk and
part of the premium originally taken by the insurer, known as
the primary company. Reinsurance effectively increases an
insurer's capital and therefore its capacity to sell more
coverage. The business is global and some of the largest
reinsurers are based abroad. Reinsurers have their own
reinsurers, called retrocessionaires. Reinsurers don’t
pay policyholder claims. Instead, they reimburse insurers for
claims paid.
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