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Glossary

This glossary is intended as a general aid to help you understand some of the commonly occurring phrases and jargon used in the insurance world.  If you have any questions about the use or meaning of a term or expression in any particular product or literature, you should raise them with the provider concerned.

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Rate
The price (or premium) of insurance.
Rebuild value
How much it would cost to rebuild your property if it was destroyed beyond repair. Most building insurance is based on this figure rather than a property’s sale price or market value.
Regular premium
premium that comes out at an agreed time, such as once a month or once a year.
Regulatory capital requirement

The amount of financial resources held by insurance companies to withstand the risks they are exposed to, such as falling asset prices or increased liabilities.

The minimum amount of capital that insurers need to hold in order to do business is determined by rules such as the European Union’s Solvency II Directive. These rules are enforced by financial regulators.

Reimbursement
Repayment of money to a consumer for a cost that is actually covered by the insurance policy.
Reinstatement
If an insured property is damaged, rather than paying the policyholder a sum of money the insurer arranges for the property to be restored to its previous condition.
Reinsurance
Insurers can buy cover from other insurers to protect themselves against large (or unexpected) losses.
Renewal notice
A notice sent to a customer inviting them to renew a policy.
Reserves
Amount set aside by organisations to cover unexpected expenses or all regular expenses for a certain time frame (often three to six months).
Responsible party
This term is often used to describe someone who has caused a loss or damage.
Rider
This is additional cover added to an existing policy.
Risk
An event or outcome that you can insure yourself against such as fire, theft, flooding.