What does Reserve mean? Read on to discover the definition & meaning of the term Reserve - to help you better understand the language used in insurance policies.
An amount of money earmarked for a specific purpose. Insurers establish unearned premium reserves and loss reserves indicated on their balance sheets. Unearned premium reserves show the aggregate amount of premiums that would be returned to policyholders if all policies were canceled on the date the balance sheet was prepared. Loss reserves are estimates of outstanding losses, loss adjustment expenses (LAEs), and other related items. Self-insured organizations also maintain loss reserves.
We hope the you have a better understanding of the meaning of Reserve.