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
loss settlement, insurance settlement, claim amount

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 (Ltot, TL) — 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.