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Ultimate Losses- Total losses that will have been paid when all claims have reached final settlement
Ultimate Total Loss- Incurred losses that have been developed (trended)
Umbrella Liability Policy - A coverage affording high limit coverage in excess of the limits of the primary policies as well as additional liability coverages. These additional coverages are usually subject to a substantial self-insured retention, or primary policy. The term "umbrella" is derived from the fact that it is a separate policy over and above any other basic Liability policies the insured may have.
Unallocated Benefit - A benefit providing reimbursement of expenses up to a maximum but without any schedule of benefits as such.
Unallocated Claim (or Loss) Expense - Expenses of loss adjustment that cannot be charged specifically to any claim. Examples would be Claim Department salaries and office overhead.
Unallocated Loss Adjustment Expense (ULAE) - Salaries, overhead, and other related adjustment costs not specifically allocated or charged to the expense incurred for a particular claim
Unearned Premium- The amount of premium remaining after deducting the earned premium from written premium; the portion of a premium representing the unexpired part of the policy period.
Underinsurance - A condition in which not enough insurance is carried to cover the insurable value.
Underinsured Motorists Coverage - Coverage in an Automobile Insurance policy under which the insurer will pay damages up to specified limits for bodily injury damages, if the limits of liability under the liable motorist's policy are exhausted and he cannot pay the full amount for which he is liable.
Underlying - The amount of insurance or reinsurance on a risk that attaches before the next higher excess layer of insurance or reinsurance attaches.
Underwriter - A technician trained in evaluating risks and determining rates and coverages for them.
Unfunded Reserves- Not having sufficient sums of money or any sum of money to meet future liabilities.
Uninsured Motorists Coverage - Coverage in an Automobile Insurance policy under which the insurer will pay damages to the insured for which another motorist is liable if that motorist is unable to pay because he is uninsured. This coverage usually applies to Bodily Injury damages only. Injuries to the insured caused by a hit-and-run driver are also covered.
Unoccupied- Refers to property which may be furnished or have furnishings in it but is not occupied or being lived in. The Standard Fire policy prohibits unoccupancy beyond a specified period of time. This term is contrasted with vacant, which means that there is nothing within the building.
Use and Occupancy Insurance - A term that was once used to refer to the coverages later known as Business Interruption Insurance, and now called Business Income Coverage. In this sense it is obsolete. It is, however, still used to refer to such loss of earnings in Boiler and Machinery Insurance. It is also used in some contracts which promise to pay on a valued basis, or fixed amount, for each day the insured is deprived of the use or occupancy of described property because of damage caused by a peril insured against.
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Vacant - A term used in Property Insurance to describe a building that has nothing in it. This goes one step beyond the description of unoccupied. The Standard Fire policy prohibits vacancy beyond a specified period of time.
Valuable Papers and Records - all-risk coverage for physical loss or damage to valuable papers and records of the insured. It includes practically all types of printed documents or records except money.
Valuation - Estimation of the value of an item, usually by appraisal.
Valuation Date- the cut-off date for adjustments made to paid claims and reserve estimates in a loss report
Value Reporting Form- Commercial form designed for businesses that have fluctuating merchandise values during the year. As values are reported (monthly, quarterly or annually) the amount of insurance is adjusted. Reporting forms help eliminate problems of overinsurance and underinsurance, as well as the need to continually endorse a policy.
Vicarious Liability - The law states that under certain circumstances a person is liable for the acts of someone else. For example, in matters related to an automobile, a parent might be held responsible for the negligent acts of a child. In such a case the parent would be vicariously liable.
Voyage Clause - A clause in Ocean Marine policies specifying the period of time of the number of trips that may be grouped together as one voyage.
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WIP- Work-in-Progress
Waiting Period - The period of time between the beginning of a disability and the start of Disability Insurance benefits. Also called the elimination period.
Waiver - (1) A rider excluding liability for a stated cause of injury or sickness. (2) A provision or rider agreeing to waive premium payments during a period of disability of the insured. (3) The act of giving up or surrendering a right or privilege that is known to exist. In property and Liability fields, it may be affected by an agent, adjuster, company, employee, or company official, and it can be done either orally or in writing.
Warranty - A statement made on an application for most kinds of insurance that is warranted as true in all respects. If untrue in any respect, even though the untruth was not known to the applicant, the contract may be voided without regard to the materiality of the statement. By contrast, statements in Life and Health applications are not warranties except in cases of fraud, and the trend in more recent court decisions in other lines has tended to modify the doctrine of warranty to an application only when the statement is material to a risk or the circumstances of a loss.
Wear and Tear Exclusion - An exclusion found in many Inland Marine policies. It excludes loss resulting from wear and tear, which means normal usage over a period of time which reduces the value of the property insured.
Weighted Average Cost of Capital- After-tax cost to the firm of an average dollar of capital or long term funds. Capital consists of long term debt, preferred stock, common stock, and retained earnings (or old common stock)
Weighted Value- In workers compensation experience modification, a percentage value taken from the same actuarial tables used above to determine the percentage of excess losses to be used in the calculations
Workers' Compensation - (1) A schedule of benefits payable to an employee by his employer without regard to liability, required by state law in the case of injury, disability, or death as the result of occupational hazards. (2) Insurance agreeing to pay Workers' Compensation law benefits on behalf of the insured employer.
Working Layer- An area of excess reinsurance in which loss frequency is expected
Wrap-Up - A package plan of a broad type, usually found only in large situations, which is coordinated in such a way as to be applicable to all Liability risks. An example would be a wrap-up policy covering all contractors working on a specific job.
Written Premium- The total premiums on all policies written by an insurer during a specified period of time, regardless of what portions have been earned.
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XCU - Explosion, Collapse, and Underground Damage. This term is used in Business Liability Insurance to indicate that certain types of construction work involve these hazards. Many Liability policies exclude them. They can be added by endorsement for an additional premium charge.
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YRT - Yearly Renewable Term. (1) Term Life Insurance that may be renewed annually without evidence of insurability until some stated age. (2) A form of Life, and sometimes Health, Reinsurance in which the reinsurer assumes only the mortality risk, which is usually calculated as the face amount of reinsurance minus the terminal reserve.