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The A-Z Of Insurance With Their Meanings



THE A-Z OF INSURANCE
Today, we will expatiate on terminologies associated with insurance in general and hope to grasp the concept behind all the jargon when it comes to insurance of all kinds. I’ll go in alphabetical order from a-z so it’s easy to follow. It will be in the form of a Glossary.
A



  • Accident: This is an occurrence, although unplanned, which happens/can happen suddenly at any time and/or place. This usually invokes the terms on the contract.
  • Accident Cover: A clause which provides cover or benefits in this context, against injury, mortality, damages as a result of violence, accident or other means.
  • Act Of God: This is a happening independent of human control or intervention whether we saw it coming or not. It involves occurrences that cannot be guarded against.
  • Actual Cash Value: This is the amount that your asset (car, motorcycle or any commodity insured) is worth at any point in time. It is calculated by subtracting the wear and tear (depreciation) of the commodity from the amount you used to purchase the said commodity.
  • Actual Total Loss: This is a loss which takes place when an insured commodity or property is damaged such that it cannot be insured again and cannot be laid claim to anymore.
  • Additional Interest Insured: Refers to another party who shares responsibility for an accident which either involves a commodity insured or not.
  • Additional Premium: An extra charge which is incurred when there is a change in the insurance contract, increasing the company’s liability.
  • Adjuster: This is a person who stands on behalf of the claimant who investigates claims made and the extent to which the company is liable. All this before the claim is submitted.
  • Advice: It involves a postulation which causes or dissuades one to make the decision to seek insurance.
  • Agent: A person who retains the agreement with an insurer or insurers and is responsible for putting together contracts for them. All these he does for a profit of course.
  • Aggrieved Party: The person involved in an accident or who has had his/her property damaged and is seeking compensation for it according to a previous agreement between him and a firm.
  • Agreed Value: It is mostly used for car insurance and is based on the value of the car depending on its make and model. It is fixed at the starting period of the insurance cover and doesn’t change over the course of the period of cover.
  • All Perils:  Provides non-mandatory coverage set up to cover all vehicles from all losses except those explicitly stated in the policy. It is, however, subject to a deductible.
  • All Risk: Elective coverage for all damages except those specifically left out of the policy.
  • Amount of Risk: Defined as the total liability of the company at a particular place.
  • Application: This is a form where the future/potential insured puts down information requested by the agent/company and from which it is decided whether the party seeking insurance will be granted access to it.
  • Arbitration: A way to settle conflicts between the insurer and the insured by use of a private referee presiding over a tribunal out of court.
  • Arson: A situation where a fire is set to property, causing damage and invoking a policy on the agreement so to say.
  • Assumed Liability: It is a liability which would not, otherwise, rest on an individual except they have taken responsibility by what is contained in the contract.

B



  • Basic Rate: This is a regulation charge for a specific risk
  • Binder: It is an agreement made before the policy is delivered, giving the insurer temporary authority to resolve claims against the said insurer.
  • Bodily Injury: A term describing any physical injury such as ill health, mental/psychological damages to a person, and in extreme cases, death.
  • Bodily Injury Liability:  A necessity to have when an insured individual is liable legally for injury or death caused by his/her vehicle. It also pays for legal representation if they are sued.
  • Broad Form: This is a form which provides coverage on several dangerous bases i.e. all forms of physical injury in any form in which it was inflicted.
  • Broker:  An individual who serves as the middleman of sorts, helping to connect the potential insured to an insurance company. They can collect premiums for the insurer and they are paid on commission.
  • Burglary: A term used to describe theft through forced entry into residential/work premises.

C
  • Cancellation: Abortion of coverage from the insurance company by the insured of the company as stipulated in the contract or agreement between both parties.
  • Certificate Of Insurance:  A certificate which shows proof that a policy has been put out/released.
  • Civil Liability: Liability of a motorist to other people who own property, pedestrians and other motorists which you take on when you use your vehicle in public.
  • Claim:  This is to make known to the insured that an event which will most likely be covered has occurred or will occur.
  • Claimant: The individual staking a right to recovery of lost or damaged property and/or compensation for bodily harm to them.
  • Comprehensive Insurance: An agreement whereby you are covered in case of damage to your vehicle from any source asides collisions.
  • Commission: An amount charged by an agent for his services in rendering an insurance contract.
  • Coverage: The range of financial protection provided by the insurance firm in the contract.

D
  • Damage: It is compensation for loss, given by a court to replace what a person would have lost in the event of the absence of the loss.
  • Deductible: This is the amount, from the total loss suffered, that the insured is required to pay before the terms in the contract are invoked.
  • Depreciation: A decrease in value of a commodity or property over time due to wear and tear from usage.
  • Defendant:  The party being sued by the plaintiff
  • Disclaimer: A statement made to make null and void, the liability of the company for things which may/may not take place.

E
  • Effective Date: The date on which coverage by the company policy commences.
  • Endorsement:  This is any correction to a policy used to add or remove any of several coverages.
  • Expiration Date: The date on which a policy ceases to be relevant.

F
  • First Party: Along with the second party, this is the party involved in financial policy. The third party is one who seeks compensation for loss caused by the first party (the insured).
  • Flood Insurance: Seeks to cover damages as a result of a flood.
  • Fortuitous Loss: Unexpected loss that is covered by a policy in the contract.

G
  • Grace Period: This is a period after the due date of a premium when a payment past due can be paid without consequence.
  • Gross Premium: A net premium and other operational expenses.

H
  • Hazard: A situation which tends to increase the chance of an accident occurring or that which may influence the loss.
  • Homeowner Insurance: A combination of coverages meant for homeowners covering the risks of owning a house.
  • Housekeeping: A risk assessment requirement covering the extent to which the insured goes to keep the insured property from harm’s way.

I
  • Indemnify: The act of restoring losses of a victim by payment, replacement or repairs.
  • Indirect Loss: Loss as a result of dangers do not occur directly or immediately.
  • Inspection: Investigation of a claim by a claimant, done by an inspection agency.
  • Insurability: Quality of being insured by the insurance company.
  • Insurance Policy: Legal document which lists out terms of coverage which is issued to the insured.
  • Insured: The individual who is at risk of financial loss and is covered by certain policies.
  • Insurer: The company in charge of insurance.

J



  • Jurisdiction: The area in which power can be exercised or in which a law is viable.

K
  • Knock-For-Knock Agreement: An agreement between two parties who own vehicle insurance whereby one agrees to handle their own repair cost and will not take legal action against the other party.

L
  • Lapse: Putting an end to a policy when a premium is unpaid.
  • Liability Insurance: This provides cover in situations where you are at fault and pays for any damages you would have caused in such cases.
  • Limit Of Liability: The amount that an insurance company will not go over in order to cover the insured.
  • Loss: The amount paid by the company on behalf of the policyholder under the contract of agreement.

M
  • Market Value: The price at which a commodity would sell in its current state and in the current market conditions.
  • Material Misrepresentation: A situation whereby the insured makes a false statement on his/her application.
  • Maximum Probable Loss: In a worst case scenario, which is assumed in this case, this is round off of the likely loss to be experienced.

N
  • Negligence: Failure to maintain a level of care that would normally be required in a particular situation.
  • Non-disclosure: This is an act of withholding information from the insurance company, especially when it means to get coverage on dubious terms.

O
  • Occurrence: A happening which results in a loss, different from an accident in that it is not spontaneous and is probably accrued.

P
  • Peril: This is the cause of a loss
  • Period Of Cover: A time frame within which coverage is valid.
  • Personal Injury: Injury to the insured in an accident.
  • Policy: Statement which stipulates how one is to be covered in the event of an accident.
  • Premium: The charge of the insurance company for coverage.
  • Proof Of Loss: A statement presented before the company with regards to a loss suffered.

Q
  • Quote: A statement of the cost of insurance based on information submitted to the insurer by the insured.

R
  • Reimbursement: The payment of money akin to that lost on behalf of the policyholder after a loss.
  • Renewal: The reclamation of policy by the insured upon its expiry.
  • Risk Management: Management of risks associated with running an insurance company and all vulnerabilities to possibilities of loss.

S
  • Settlement: An agreement between the insurer and the insured.
  • Subrogation: A situation whereby the company takes the place of the policyholder to take actions on his/her behalf.

T
  • Third Party: One who is not part of the contract but has a right of action for damages done against him/her which are insured under said contract.
  • Total Loss: Loss so huge that nothing is left of the property or commodity.
  • Transfer of Risk: Pushing all/part of the risk to a separate party.

U



  • Underwriter: One who is trained to assess risks and find suitable coverages for them.
  • Unearned Premium: Premium owed to a policy owner in the event of cancellation of the policy.

V
  • Valuation: The process of assessing a commodity or property to know exactly what it is worth so the amount it can be insured for will the determined.
  • Void Contract: A contract is taken as though it was never written and signed in the first place due to discrepancies here and there within it.

W
  • Waiver:  This is a rider which waives liability for an accident or its cause.
  • Waiting Period: A period of time which must go by before coverage according to contract commences.
  • Warranty: A policy/term which states the obligation that the policyholder must do or not do in order for its fulfillment.
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