What is the Definition of Self-Insurance?

What is the Definition of Self-Insurance?

The concept of assuming a financial risk oneself, instead of paying an insurance company to take it on. Every policyholder is a self-insurer in terms of paying a deductible and co-payments. Large firms often self-insure frequent, small losses such as damage to their fleet of vehicles or minor workplace injuries. However, to protect injured employees state laws set out requirements for the assumption of workers compensation  programs. Self-insurance also refers to employers who assume all or part of the responsibility for paying the health insurance claims of their employees. Firms that self insure for health claims are exempt from state insurance laws mandating the illnesses that group health insurers must cover.

Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/

Label: Insurance
Theme: Dictionary of Insurance Terms

Other Questions: What is the definition of Annuity?

What is the Definition of Self-Insurance?

You can find random definition and meaning of insurance terms below:

What is the meaning of Residence

the domicile location of a member as shown by his or her determination as a resident.

What is the meaning of Residual Market Plan

method devised for coverage of greater than average risk individuals who cannot obtain insurance through normal market channels.

What is the meaning of Retention

a mechanism of internal fund allocation for loss exposure used in place of or as a supplement to risk transfer to an insurance company.

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