Any natural occurrence that is outside human control such as earthquake or typhoon.
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.
Ages below and above which an insurance company will not accept applications or renew policies.
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.
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.
An insurance intermediary who represents the interests of the client, not the insurance companies.
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.
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.
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.
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.
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.
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.
Date when insurance coverage begins. Also known as commencement date.
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.
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.
The amount of claim insured has to pay before the insurance cover comes in. See Deductible.
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.
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.
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.
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.
Risk management plan that, for a price, offers the insured an opportunity to share the costs of possible financial loss through an insurer.
The party entitled to receive money under an insurance contract on the happening of a stated contingency.
The party (insurance company) who agrees to pay money to another party on the happening of a stated contingency.
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.
Expiring of policy due to failure to pay the renewal premium.
Adjusters are independent firms, which deal with the investigation of insurance claims, their causes and the values involved.
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.
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.
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.
The person named in the Personal Accident policy as the recipient of insurance money in the event of the policyholder's death.
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.
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.
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.
A monetary consideration paid by the insured to the insurer for an insurance policy.
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.
This cover is for buildings and machinery where no deduction is made for wear and tear in the event of a claim.
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.
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.
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.
The amount stated under the policy and the maximum claim that will be paid out.
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.
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.
You have insured your property for less than its full value in a policy.
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.