Reinstatement
Definition
Restoration of reinsurance coverage after a loss has eroded the original limit. May require additional reinstatement premium.
Practical Example
Two automatic reinstatements at 100% of original premium after CAT losses.
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Related Terms
Additional premium charged when reinsurance limits are restored after a loss. Expressed as percentage of original premium.
Catastrophe Excess of Loss reinsurance - A non-proportional reinsurance structure providing coverage for catastrophic events exceeding a specified retention. Commonly used for natural catastrophes like hurricanes and earthquakes.