Retention, or self-insured retention (SIR), is the amount of loss the insured (policyholder) must incur before insurance coverage takes effect.  In other words, the insured is responsible for covering or paying for all losses, damages, and expenses up to the retention amount, after which the insurer begins making payments.  Consequently, you can think of a retention as the risk that you retain (hence the term "retention").

A similar insurance concept is a "deductible," used commonly in home owners, renters, and car insurance policies.  However, although the purpose is the same, there are subtle differences. 

Do also note that retentions may differ between insuring agreements.  In the event of a claim, the highest applicable retention applies.  If you have any questions about retentions, don't hesitate to contact us.

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