Underlying Retention

Underlying Retention

A limit on an insurance policy's coverage past which an umbrella policy begins to pay claims. For example, if one holds an umbrella policy paying all expenses over the $200,000 limit on one's homeowners insurance, the underlying retention is $200,000.
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References in periodicals archive ?
In the minority of cases when applications are changed or declined by a reinsurer, Lincoln can tap some $20 million in reserves dedicated to "underlying retention:" the amount of risk arising from an insurance policy that is retained by Lincoln after reinsuring the balance amount of risk ceded to the reinsurer.