Loss Settlement Amount

Definition

  • The total settlement amount an insurance company will pay for damages to a home. If the homeowner underinsures his or her property, then the insurance company will pay a loss settlement amount proportional to the amount of insurance the homeowner purchased. For example, if the homeowner purchases only $400,000 worth of homeowners insurance on a $500,000 home (80% coverage) and there is $100,000 worth of damages, the insurance company is only contractually obligated to pay for $80,000 of the damages.

Synonyms
insurance settlement, claim amount, loss settlement

Related Terms and Acronyms

  • Claims Adjuster Definition,
    • An individual who ascertains the insurer's liability after an insurance claim has been made.
  • Concurrent Causation Definition,
    • If there is more than one cause of damage in an insurance claim and one cause is covered while the other is not, the insurer is obligated to cover the loss.
  • First Loss Insurance Policy Definition,
    • An insurance policy where the policyholder under-insures their assets and will only receive partial coverage in the event of a loss.
  • Indemnity Definition,
    • An arrangement where one party assumes liability for another party.
  • Insurance Claim Definition,
    • An application for benefits made by an insurance policyholder after an insured event.
  • Loss Definition,
    • When expenses are larger than revenues.
  • Loss Payee Definition,
    • An entity that is legally entitled to the benefits of an insurance claim.
  • Loss Ratio Definition,
    • A method of comparing an insurer's losses to premiums earned in a specific period of time.
  • Losses Incurred Definition,
    • The total net losses of an entity in a year.
  • Settlement Definition,
    • An agreement between the parties of a legal case.
  • Settlement Statement Definition,
    • A document that details who has paid how much to whom.
  • Total Loss (TL, Ltot) Acronym & Abbreviation,
    • When as asset is considered to be damaged beyond repair.
  • Ultimate Net Loss (UNL) Acronym,
    • The final sum that an insurer is required to pay a policyholder after they have filed a valid claim.
  • Underinsurance Definition,
    • When the amount of insurance coverage on an asset is less than the asset's full value.
  • Value Reporting Form Definition,
    • A form used to keep track of a business's current inventory value.
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