Glossary Of Insurance Terms - Ohio Insurance Institute

Glossary Of Insurance Terms
(Rev. 04/07)
E (continued)
Excess of Loss Reinsurance:
A contract between an insurer and a reinsurer, whereby the insurer agrees to pay a specified portion of a claim and the reinsurer to pay all or
a part of the claim above that amount.
Excess Limits:
Coverage against losses in excess of a specified dollar limit.
Exclusion:
A provision in an insurance policy that eliminates coverage for certain risks, people, property classes, or locations.
Exclusive Agent:
A captive agent, or a person who represents only one insurance company and is restricted by agreement from submitting business to any
other company unless it is first rejected by the agent’s company. (See Captive Agent.)
Exclusive Remedy:
Part of the social contract that forms the basis for workers compensation statutes under which employers are responsible for work-related
injury and disease, regardless of whether is was the employee’s fault and in return the injured employee gives up the right to sue when the
employer’s negligence causes the harm.
Expense Ratio:
The ratio of a company’s operating expenses to premiums written. (Expenses include losses and loss adjustment expenses.)
Experience:
The loss record of an insured or of a particular class of coverage.
Expiration Date:
The date shown on the declarations page of the policy when coverage will stop. It may be a specific date or a statement that coverage is
continuous until cancelled.
Exposure:
This term in the insurance field may have several meanings: (1) possibility of loss; (2) a loss potential as measured by type of construction,
area or values; (3) a possibility of a loss being communicated to an insurance risk from its surroundings; or (4) a unit of measure of the
amount of risk a company assumes (for example, one car insured for one year).
Extended Coverage:
An endorsement added to an insurance policy, or clause within a policy, that provides additional coverage for risks other than those in a basic
policy.
Extended Coverage Property Insurance:
An extension of the fire insurance policy to protect the insured against property damage caused by the additional perils of windstorm, hail,
explosion, or riot, civil commotion, aircraft, vehicle and smoke.
Extended Replacement Cost Coverage:
Pays a certain amount above the policy limit to replace a damaged home, generally 120% or 125%. Similar to a guaranteed replacement cost
policy, which has no percentage limits. Most homeowner policy limits track inflation in building costs. Guaranteed and extended replacement
cost policies are designed to protect the policyholder after a major disaster when the high demand for building contractors and materials can
push up the normal cost of reconstruction. (See Replacement Cost Coverage.)
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