Waiver (Insurance)
A waiver in insurance is a voluntary relinquishment of a known right, claim, or privilege by one party, often documented in writing. In insurance contexts, it typically means giving up the right to deny coverage, collect deductibles, or pursue subrogation under specific circumstances.
Example
“The insurance company issued a waiver of their subrogation rights, agreeing not to pursue the at-fault driver for reimbursement of the claim they paid to their insured.”
Memory Tip
Think 'Wave goodbye' - when you waive something, you're waving goodbye to a right or requirement you normally would have.
Why It Matters
Waivers can significantly impact your financial responsibility and legal rights in insurance claims. Understanding when waivers apply helps you anticipate out-of-pocket costs and know what rights you may be giving up when signing insurance documents or settlement agreements.
Common Misconception
Many people think waivers are always permanent and irrevocable, but some insurance waivers only apply to specific incidents or time periods. Others believe that signing any waiver means giving up all rights, when insurance waivers are typically narrow and specific to particular provisions or circumstances.
In Practice
After a kitchen fire caused $25,000 in damage to Robert's home, his insurance company normally would collect his $1,000 deductible and then pursue the appliance manufacturer for reimbursement. However, the insurer issued a deductible waiver due to the manufacturer's known defect recall, so Robert paid nothing out-of-pocket. The company also waived their subrogation rights as part of a class-action settlement, receiving $20,000 directly from the manufacturer while Robert kept his full $25,000 in coverage.
Etymology
From the Anglo-Norman French 'weyver' meaning 'to abandon' or 'forsake,' the term entered legal language in the 14th century to describe voluntarily giving up a legal right.
Common Misspellings
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Related Terms
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See Also
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