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R

Railroad protective liability - Liability coverage designed to protect a railroad from liability claims arising out of the operations of others on or adjacent to railroad property.

Rain insurance - A weather coverage that indemnifies a promoter or organizer against loss of income because of the cancellation of an outdoor event due to rainfall that exceeds a specified amount during a specified time period.

Rate filing - Documentation filed by an insurer with the state requesting a change in the existing rates.

Rating bureau - A private organization that classifies and promulgates manual rates (or loss costs).

Real property - Land, buildings, and other structures (such as a swimming pool or tool shed).

Rebate - In insurance, a portion of an agent’s commission returned to a customer as an inducement to place the insurance through the agent. This practice is illegal in all but two states as against public policy. Reciprocal exchange - A type of insurance managed by an attorney-in-fact in which members pay premiums, and share in losses equally. Membership is required for insurance.

Redlining - Unfair discrimination based not on the risk’s characteristics but on its location. The term is commonly associated with an insurer’s refusal to consider insuring any home or business within a specific area marked by a line drawn on a map.

Reinsurance - The business of insuring insurance companies. By "ceding" a portion of its business to a reinsurance company, an insurer spreads the risk of exposure to catastrophic loss.

Reinsurer, see Reinsurance.

Removal - "Removal" was a provision of the New York Standard Fire Policy in which the insurer agreed to cover the cost of removing covered property from the path of a fire. Presently, property policies express the agreement in terms of "preservation of property" from imminent danger of damage from any covered peril. Not to be confused with Debris removal.

Renewal - The extension of the term of coverage of an expired policy, commonly by replacement with another policy effective on the date of expiration of the previous policy.

Rent-a-captive - A specialized form of capitve insurance company operation designed for businesses that do not want to own a captive but want to obtain some of the advantages offered by captives. A rent-a-captive is formed by a group of investors and operated as an income-producing business. Insureds who wish to participate "rent" space in the captive instead of setting up and capitalizing their own captive insurance company.

Rent insurance - A form of business interruption insurance for a landlord. It protects building owners against loss of income when the building cannot be rented because of damage from any of the insured perils. It provides income while an insured’s building is untenantable.

Rental value insurance - Refers to protection of either a landlord’s rental income or an owner occupant’s economic stake in use of the subject structure. Either interested party can obtain coverage by way of an Insurance Services Office business income form.

Renters insurance - Term for insurance for the non-owner occupant of a dwelling or apartment.

Replacement cost, see Actual cash value.

Replacement cost appraisal - An appraisal that determines the amount required to replace an existing structure and related personal property.

Replacement cost insurance - Covers property — both building and contents — on the basis of full replacement cost without deduction for depreciation on any loss sustained, subject to the terms of the co-insurance clause.

Reporting form - A device for insuring values subject to extensive fluctuation that keeps the premium in line with the actual exposure. A maximum limit is set at policy inception and the insured is charged a "deposit premium." Actual values are then reported, usually on a monthly basis, and earned premium is figured on the basis of those reports and laid off against the deposit premium.

Reservation of rights - An arrangement in which an insurer agrees to proceed with the defense of a case without commitment to provide coverage, in the event that the facts disclosed during the trial reveal that the occurrence is not covered.

Reserves or reserved losses - The value of losses that have been estimated and set up for future payment.

Resident agent - A licensed agent who resides in and is licensed in the state in which business is being written.

Residual markets - Insurance markets established outside the normal insurance marketing channels to cover unusually large or poor risks. Such markets include assigned risk plans, aircraft pools, nuclear pools, and certain government insurance programs.

Respondeat superior - A legal term referring to the fact that, under specific circumstances, an employer (or principal) is legally liable for the actions of his or her employees while in the course of their employment.

Retention - Usually used in reinsurance, this is the amount of liability retained by an insurer, and not ceded to a reinsurer.

Retroactive date - The date that defines the extent of coverage in time under claims-made liability policies. Claims resulting from occurrences prior to the policy’s stated retroactive date are excluded.

Retrocessionnaire - A reinsurer that contractually accepts a portion of the cedant’s reinsurance risk. The transfer is called a retrocession. Retrospective rating - A rating arrangement in which the final premium for insurance coverage is not determined until all claims are closed. The final premium is determined by the insured’s actual loss experience during the policy period.

Rider - Another term for an endorsement attached to a policy that modifies the coverage.

Riot - One of the extended coverage perils, related to, but broader than, civil commotion.

Risk - Risk is uncertainty concerning loss. Sometimes also used to refer to a piece of business or a submission to an insurer.

Risk and Insurance Management Society, Inc. (RIMS) - Trade association of risk managers and insurance buyers.

Risk management - The process of handling pure risk by way of reduction, elimination, or transfer of risk, with the latter commonly achieved through insurance.

Risk manager - The individual in an organization responsible for evaluation of the organization’s exposures, and controlling these exposures through such means as avoidance or transference, as to an insurance company.

Risk retention group - An insurance company chartered under the laws of a state or other U.S. jurisdiction, composed of members whose business activities are similar, and controlled by its members.

Rolling store - A vehicle out of which goods are sold. An example would be a mobile snack bar at a construction site. Insurance policies may contain wording that may restrict or define available coverage for this type of operation.