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A |
Act Of God
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Any
natural occurrence that is outside
human control such as earthquake or
typhoon.
Additional Perils
These are provisions that can widen
the scope of basic insurance
policies, for example, Fire
policies, which often restrict
coverage to a limited range of
perils, such as fire, lightning and
explosion. These provisions are
sometimes called Special Perils and
may include, for example, losses
caused by storm, flood or damage by
aircraft.
Age Limits
Ages below and above which an
insurance company will not accept
applications or renew policies.
Agents
Someone who sells and services
insurance policies on behalf of
insurers. In many countries agents
can only represent either one or a
limited number of insurers as
opposed to brokers who have a free
rein. Agents often obtain their
clients from friends and relatives
and therefore tend to have a
personal knowledge of the client.
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B |
Benefit
Policy |
A
contract to pay a sum of money in
the event of a certain contingency,
irrespective of whether the insured
sustains a pecuniary loss. A
contract of personal accident
insurance is generally a benefit
policy.
Bodily Injury Liability
A legal liability that may arise as
a result of the injury or death of
another person.
Broker
An insurance intermediary who
represents the interests of the
client, not the insurance companies.
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C |
Claim
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Notification to an insurance company
that payment of an amount is due
under the terms of the policy. A
claim may also be made against an
insurance company, when an insured
asks the insurance company to pay
for a loss that may be covered by an
insurance policy.
Claims-Made Coverage
A policy providing liability
coverage only if a written claim is
made during the policy period or any
applicable extended reporting
period. For example, a claim made in
the current year could be charged
against the current policy even if
the injury or loss occurred many
years in the past. If the policy has
a retroactive date, an occurrence
prior to that date is not covered.
Contrast with Occurrence Coverage.
Conditions
The policy owner must comply with
the terms of the policy before he
can expect his insurers to pay the
claim, which seems simple enough.
This condition also links up with
the declaration on the proposal form
that answers given must be truthful.
Contract of Indemnity
Property insurance that restores the
insured to his original financial
condition after suffering a loss.
The idea is that the insured cannot
profit by his misfortune. Personal
Accident insurance, where a
pre-agreed lump sum payment is made,
is not a Contract of Indemnity.
Contribution
Where someone is holding two or more
insurance policies covering the same
interest in the same property for
the same peril, and if the policies
are contracts of indemnity, than the
law does not allow the insured to
recover a loss under both policies
and so make a profit out of the
misfortune he has insured against.
Instead, the insurers concerned
share in the loss proportionately.
Coordination of Benefits
A group policy provision which helps
determine the primary carrier in
situations where an insured is
covered by more than one policy.
This provision prevents an insured
from receiving claims overpayments.
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D |
Deductible
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Sometimes called an 'Excess', it
refers to the amount of claim that
insured must pay before the
insurance cover will operate.
Sometimes this deductible is imposed
by insurers because of the nature of
the risk and in other cases it is
voluntary and a premium reduction
can be allowed.
Double Indemnity
Payment of twice the basic benefit
in the event of loss resulting from
specified causes or under specified
circumstances. Personal Accident
policies may provide double
indemnity coverage for death due to
accident whilst the insured is
travelling in a public transport
vehicles.
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E |
Effective
Date |
Date
when insurance coverage begins. Also
known as commencement date.
Endorsements
These are special or unusual
provisions that have the effect of
varying a standard policy wording,
or they may be alterations made to
the cover offered by the insured or
insurer, after the policy has begun.
Exceptions
Sometimes known as Exclusions, these
are designed to limit the insurer's
risk and can be found in the
policies. Notable examples would be
the exclusion of war risks and
nuclear damage, property covered by
other insurance, etc.
Excess
The amount of claim insured has to
pay before the insurance cover comes
in. See Deductible.
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F |
Family
Policy |
An
insurance policy providing insurance
on all or several family members in
one contract, generally the
principal sum insured for
breadwinner and smaller amounts on
the other spouse and children,
including those born after the
policy is issued.
First Loss Policies
An insured may decide that he does
not wish to insure to full value and
in effect by choosing a lower sum
insured, or first loss cover, he is
fixing his own maximum probable or
possible loss.
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G |
Group
insurance
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An
insurance plan by which a number of
employees (and their dependents) or
other homogeneous group, are insured
under a single policy, issued to
their employer or leader with
individual certificates given to
each insured individual or family
unit.
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I |
Indemnity
|
An
insured should not profit by a
claim, but should be put in the same
financial position as he was
immediately before it happened. Some
policies can be an exception to the
rule, when 'New for Old' replacement
covers is granted, which could put
the insured in a better position.
Insurable Interest
A condition in which the person
applying for an insurance policy and
the person who is to receive the
policy benefit will suffer an
emotional or financial loss if the
event insured against occurs.
Insurance
Risk management plan that, for a
price, offers the insured an
opportunity to share the costs of
possible financial loss through an
insurer
Insured
The party entitled to receive money
under an insurance contract on the
happening of a stated contingency.
Insurer
The party (insurance company) who
agrees to pay money to another party
on the happening of a stated
contingency.
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J |
Jettison
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This is
the casting overboard of goods,
property or part of the stores and
provisions of the crew to lighten a
vessel, thereby preventing its
sinking.
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L |
Lapse
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Expiring of policy due to failure to
pay the renewal premium.
Loss Adjusters
Adjusters are independent firms,
which deal with the investigation of
insurance claims, their causes and
the values involved.
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M |
Marine
"Institute Clauses"
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Clauses
approved by a committee appointed by
marine Insurers in London and
published by the Institute of London
Underwriters. These are the standard
clauses used in the marine insurance
market and are known in most parts
of the world. The advantage is that
any importer/exporter/bank or claims
agent knows that the cover provided
is basically the same no matter the
Company or Country of issue.
Marine Open Cover
It is not a contract of marine
insurance and as such,
policies/certificates must be issued
from time as and when declarations
are made. It is an honourable
undertaking on the part of the
Insurers to hold covered all the
Assured's shipments which come
within the terms of the Open Cover.
Likewise, The Assured is in honour
bound to declare every item that
falls within the scope of the cover
and does not have the option to
place such risk elsewhere should he
consider it a advantageous so to do.
Thus, the Open Cover is an
obligatory contract binding both
parties to its terms, rates and
conditions.
Material Fact
Anyone seeking insurance must
disclose all the material facts
about the risk involved that he or
she knows, or that they ought to
know. In other words, the insured
should not hide anything. The
trouble is certain facts, which the
underwriter may deem 'material' may
not always be known to the insured.
The best principle to follow is: 'If
in doubt, mention it anyway.' If you
are not sure whether some other
piece of information may or may not
be relevant, tell your insurers
anyway.
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N |
'New for
Old' |
This is
also called Reinstatement cover,
which is found in difference forms
on different policies. Basically, it
means the insurer agrees to settle
the claim on the new replacement
value of the item, that is with no
deduction for wear and tear,
regardless of what the item was
bought for, or what its current
market value is.
No Claim Discount
Is a scale of discounts applied to
motor tariff premium. It also
reflects the previous driving record
of the Insured. If the Insured
claims or a third party claims
against his policy, regardless of
who was driving at the time of
accident with the compliance of the
policy condition, the Insured's NCD
will be affected that is it will be
zero upon expiry of policy.
Nominee
The person named in the Personal
Accident policy as the recipient of
insurance money in the event of the
policyholder's death.
Notification
All policies have conditions on
notification of claims to insurers.
Some say notice should be given
'soon as possible' or 'forthwith'
while others specify a period within
which the incident must be reported.
This is obviously no point in
delaying. Even if you do not have
full particulars of the claim,
report the matter and ask advice
from your insurers' claims
department as to the next step to
take.
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O |
Occupation
Class |
Class
of occupations that present a
similar risk to an insurer. If all
other factors are equal, people in
the same occupation class will pay
the same premium rates.
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P |
Policy
|
The
contract between the insurer and the
insured under which the insurer
agrees to pay the policy benefit
when specific losses occur, provided
the insurer receives the required
premium.
Premium
A monetary consideration paid by the
insured to the insurer for an
insurance policy.
Proposal Form
A proposal form is an application
form to be filled in by any one who
wants to take out insurance; he or
she is then known as the proposer.
This is the basis of the insurance
contract. The proposer must disclose
all relevant facts known to him or
her, or which he or she ought to
know. If the proposer fails to
disclose such facts, he or she may
find the policy virtually useless
when the hour of need arises.
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R |
Reinstatement Cover
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This
cover is for buildings and machinery
where no deduction is made for wear
and tear in the event of a claim.
Renewal Notice
This is a form sent to the insured
advising him or her that the policy
renewal date is approaching and
inviting renewal on payment of a
stated premium. This invitation is
extended on the basis of information
that the insured has already given
to the insurer.
Risk Improvement
An insurer may make the acceptance
of covers subject to certain action
being taken, example; to require the
installation of alarm systems for
burglary insurance.
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S |
Subrogation
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An
insurance carrier may reserve the
"right of subrogation" in the event
of a loss. This means that the
company may choose to take action to
recover the amount of a claim paid
to a covered insured if the loss was
caused by a third party. After
expenses, the amount recovered must
be divided proportionately with the
insured to cover any deductible for
which the insured was responsible.
Sum Insured
The amount stated under the policy
and the maximum claim that will be
paid out.
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T |
Tariff-rated
|
An
insurance cover that is tariff-rated
means the premium for that cover is
being computed based on a formula
determined by the authority. This
means all insurance companies are
charging the same premium for the
same cover.
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U |
Underground
Property Damage
|
Refers
to damage to underground property,
such as wires, conduits or pipes,
sewers, etc., beneath the surface of
the ground caused by the use of
mechanical equipment for the purpose
of grading land, paving, excavating,
drilling, burrowing, filling, back
filling, or pile driving.
Under-Insurance
You have insured your property for
less than its full value in a
policy.
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W |
Warranty
|
A
policy condition which, if not
complied with, may have the effect
of invalidating the whole policy.
Wear and Tear
Policies exclude this sort of
damage. It is not accidental but
inevitable with most goods.
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