recovery conventions

Recovery conventions are standard rules used in insurance claims to determine how much an insurance company will pay after a loss. They specify whether costs or recoveries (like insurance payments or recoveries from other sources) are counted before or after deducting deductibles, limits, or other adjustments. Common conventions include “gross,” where recoveries are considered before deductions, and “net,” where recoveries are after deductions. These rules ensure consistency and fairness in calculating payments and recoveries, helping all parties understand exactly how the final settlement will be determined.