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What is loss transfer?
Expert Answer
Loss transfer is a condition under which during particularevent, insurers who pay no-fault benefits (the first-party insurer)may be reimbursed by another insurer (the second-party insurer) whois actually at fault.
Loss transfer, is typically applicable to automobile insurances.Loss transfer is a mechanism between different insurers ofdifferent classes of vehicles only applies when the policyholder ofthe second-party insurer was at least partly at fault in anaccident. The purpose of loss transfer is to balance the cost ofno-fault benefits between different classes of vehicles.