Waiver Of Restoration Premium

AAA

DEFINITION of 'Waiver Of Restoration Premium '

A clause in an insurance policy that says that the insurance company will not require the policyholder to pay a fee to get back the level of coverage that their policy initially provided before any claims were paid out. If a policy does not contain the waiver of restoration premium, it may be possible to regain coverage by paying an additional premium.

INVESTOPEDIA EXPLAINS 'Waiver Of Restoration Premium '

On the other hand, the policy may simply become exhausted once the policy limits have been reached. Insurance policies have a maximum amount that they will pay for both individual incidents and over the life of the policy. If restoring an insurance policy is not an option, the insured may want to purchase secondary policies that can go into effect if the primary policy becomes exhausted.

RELATED TERMS
  1. Waiver Of Subrogation

    A special type of endorsement on a property-casualty insurance ...
  2. Waiver Of Demand

    An agreement by the party that has endorsed a check or draft ...
  3. Waiver Of Notice

    A legal document that waives the right to formal notification. ...
  4. Waiver Of Exemption

    A provision in a consumer credit contract or loan agreement that ...
  5. Waiver

    The voluntary action of a person or party that removes that person's ...
  6. Waiver Of Premium Rider

    A clause in an insurance policy that waives the policyholder's ...
RELATED FAQS
  1. What is the difference between moral hazard and adverse selection?

    Adverse selection occurs when there's a lack of symmetric information prior to a deal between a buyer and a seller, whereas ... Read Full Answer >>
  2. What is the theory of asymmetric information in economics?

    The theory of asymmetric information was developed in the 1970s and 1980s as a plausible explanation for common phenomena ... Read Full Answer >>
  3. What is the difference between the loss ratio and combined ratio?

    The loss ratio and combined ratio are two ratios used to measure the profitability of an insurance company. The loss ratio ... Read Full Answer >>
  4. How do I calculate the combined ratio?

    The combined ratio is a quick and simple way to measure the profitability and financial health of an insurance company. The ... Read Full Answer >>
  5. What does the lapse ratio in the insurance sector measure?

    The lapse ratio measures the amount of insurance policy renewals with respect to the total number of insurance policies at ... Read Full Answer >>
  6. Why some insurance policies are more expensive than others?

    There are several reasons that an insurance policy can cost more or less at different agencies. Some of the more common reasons ... Read Full Answer >>
Related Articles
  1. Insurance

    15 Insurance Policies You Don't Need

    Learn how to save money by saying "no" to unnecessary coverage.
  2. Options & Futures

    Long-Term Care Insurance: You Have Options

    The latest offerings provide more coverage and the ability to pick and choose what types of coverage you'll need.
  3. Home & Auto

    Life Insurance Clauses Determine Your Coverage

    Understanding these key parts of your policy will help you to ensure that your family will be covered.
  4. Insurance

    Life Insurance: Putting A Price On Peace Of Mind

    Would your death leave loved ones financially stranded? Find out how to ease your mind and keep them protected.
  5. Retirement

    5 Mistakes That Can Ruin Your Life (Insurance)

    Don't let these simple errors leave you unprotected. Read on to learn more.
  6. Options & Futures

    Let Life Insurance Riders Drive Your Coverage

    Find out how these additional benefits can help you customize your policy.
  7. Retirement

    IUL Insurance: An Alternative Retirement Plan?

    Indexed universal life insurance is the rise. But critics argue that wisely allocated IRA and 401(k) funds will normally offer better returns.
  8. Economics

    What is Adverse Selection?

    Adverse selection occurs when one party in a transaction has more information than the other, especially in insurance and finance-related activities.
  9. Insurance

    Life Insurance: How Much Does Age Raise Your Rate?

    If you need life insurance, try to get it before your next birthday. Here's why.
  10. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.

You May Also Like

Hot Definitions
  1. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  2. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  3. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  4. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
  5. Adverse Selection

    1. The tendency of those in dangerous jobs or high risk lifestyles to get life insurance. 2. A situation where sellers have ...
Trading Center