R – Glossary of Terms

ALPHABETICAL LISTING 

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Radius of Operation:
Used to determine rates for automobiles owned by a business.

Rate:
The pricing factor upon which an insurance premium is based.

Reasonable and Customary Charge:
A charge for health care, which is consistent with the going rate or charge in a certain geographical area, for identical or similar services.

Rebating:
Giving any valuable consideration (commission) to a prospect or insured as an inducement to buy.

Recurring Clause:
A provision in health insurance policies, which specifies a period of time during which the recurrence of a condition is considered a continuation of a prior period of disability or hospital confinement.

Reduced Paid-up Insurance:
Provides for continuation of the original insurance plan, but for a reduced amount.

Rehabilitation:
There are two meanings here:
(1) Restoration of a totally disabled person to a occupation, or 
(2) a provision in a long term disability policy that provides for continuation of benefits or other financial assistance while a totally disabled insured is retraining or attempting to resume employment.

Reimbursement:
Payment of the expenses actually incurred as a loss covered by the policy.

Reinstatement:
The resumption of coverage under a insurance policy which lapsed.

Reinsurance:
The acceptance by one or more insurers of a portion of the risk underwritten by another insurer.

Renewable Term Insurance:
Term insurance which can be renewed at the end of the term, at the option of the policyholder.

Renewal:
A continuance of insurance under a policy beyond its original term by the insurer’s acceptance of the premium for a new policy term.

Rental Insurance:
A type of insurance that includes coverage similar to a homeowners policy to cover the personal property of a renter or tenant in a building.

Replacement:
The substitution of insurance coverage from one policy contract to another.

Replacement Cost:
The cost to repair or replace property without considering depreciation.

Representation:
Statements made by an applicant in the application, which represents as being true to the best of his knowledge and belief, but which are not warranted as exact in every detail.

Rescission:
Termination of an insurance contract by the insurer on the grounds of material misstatement on the application for insurance.

Reserve:
The amount required to be carried as a liability in the financial statement of an insurer, a sum set aside by an insurance company as a liability to fulfill future obligations.

Residual Disability:
A period of partial disability that immediately follows a period of total disability.

Residual Market:
A source of insurance available to applicants who are unable to obtain insurance through ordinary methods in the voluntary market.

Retention:
The amount of risk retained by an insurance company and not the insured.

Retrocession:
A process by which a reinsurer obtains reinsurance from another company.

Retrospective Date:
The first date for which claims will be paid under a claims-made policy of liability insurance.

Retrospective Rating:
Rating procedure which allows adjustment of an insured’s final rate on the basis of the insured’s own loss experience.

Rider:
A document which amends an insurance policy or certificate. It may increase or decrease benefits, waive the condition of coverage or in any other way amend the original contract.

Risk:
The chance of loss. Also used to refer to the insured or to property covered by a policy.

Risk Retention Groups:
These are liability insurance companies owned by their policyholders.

Robbery:
The taking of property from a person by force or threat of violence.

Rollover:
Transfer of an IRA or other qualified pension funds from one financial institution to another.

Running Down Clause:
Additional coverage which can be added to an Ocean Marine Hull policy to provide protection for damage to another ship caused by collision.
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