Auto Insurance Glossary – Q Definitions

Qualified Self-Insurer

An organization which has received state approval to underwrite its own liabilities for specified losses, as opposed to effecting a policy with an insurance company for those losses. Qualified self-insurers are approved only with respect to liabilities for which the state mandates insurance coverage. For example, states invariably require coverage for auto insurance, and therefore organizations may apply for qualified self-insurer status to underwrite their own liabilities for auto losses. Each state specifies its own approval criteria for self-insurer status, which normally include organization size and ability to meet projected liabilities.

Quantitative Threshold

A threshold applied in certain states which have adopted no-fault insurance laws for personal injury due to auto accidents, above which the no-fault laws can be set aside in favor of redress through the tort system. In tort law a person who suffers personal injury in an auto accident is permitted to seek compensation by lawsuit against the person who caused the accident. A quantitative threshold is defined with reference to the total dollar value of the damages due to personal injuries caused by an auto accident, and for this reason is also known as a monetary threshold. See also verbal threshold and tort threshold.

Quantum Meruit

A Latin term which means “the amount which is merited”. It exists as a principle in state case law, on the basis that quantum meruit is a contract implied by law. It applies in situations where no formal contract exists, or where a formal contract does exist but it is only partially-completed by one of the parties. The principle is used to determine the extent to which a party who renders or partially renders a service, or who in some other way provides value to another, ought to be compensated by the party to whom value is delivered. For example, a body shop which is contracted to repair a damaged car, but which is unable to fully complete the repairs, may be able to file a lawsuit under quantum meruit against the car’s owner for the extent of repairs completed, should the owner refuse to pay any amount for those repairs.

Quota Share Insurance

Insurance or reinsurance which is effected on the basis that two or more insurance (or reinsurance) companies share losses in proportion to the premiums which each receives for the coverage. For example, an auto insurer may effect a 40% quota share agreement with a reinsurer whereby the reinsurer is liable for 40% of any insured losses, and the insurer is liable for the remaining 60% of losses. Under this arrangement the reinsurer may be entitled to receive, on a gross basis, 40% of the premiums paid for the coverage. However, the reinsurer will typically pay a ceding commission to the insurer for any business which it places, in consideration for the initial costs which the insurer bears in obtaining the business.