Equalization Reserve

A long-term reserve that an insurance company keeps for the purpose of preventing cash-flow depletion in the event of a significant unforeseen catastrophe.

Investopedia Says:
A disastrous event such as a flood, earthquake, or fire can result in the severe depletion of an insurance company's equalization reserve. These reserves could be seen as the company's personal "rainy day fund," compensating for unforeseen and often expensive events.

Related Links:
Find out how these additional benefits can help you customize your policy. Let Life Insurance Riders Drive Your Coverage
Some things shouldn't be left to chance. Find out more here. Five Insurance Policies Everyone Should Have
Use these simple ideas to save money and get better coverage for your house. Insurance Tips For Homeowners
Learn how to save money by saying "no" to unnecessary coverage. Fifteen Insurance Policies You Don't Need
Understanding these key parts of your policy will help you to ensure that your family will be covered. Life Insurance Clauses Determine Your Coverage
Understanding your contract can help you protect our family's financial security. Exploring Advanced Insurance Contract Fundamentals

Allowance or reserve account credited periodically to offset charges to cover expenditures made during an accounting period. Its purpose is to allocate the expense uniformly over a period's operations. Maintenance expenses are sometimes handled in this manner. As the expenditures are actually paid, the allowance is debited, and the asset (e.g., cash) expended is credited.