|
Glossary - Sphinx Insurance - General Insurance Brokers
Said definitions of easy to understand explanation of common terms used in the insurance context
This glossary does not provide legal definitions. You must always refer to the relevant insurance policy or other contract when
interpreting your rights and obligations, and the definitions contained in this glossary do not replace any definitions contained in
any policy of insurance that you now hold or may hold in the future. Whilst reasonable efforts have been made to ensure that the
information provided in this glossary is accurate. Sphinx Insurance does not warrant the accuracy, adequacy of completeness
of the information provided in this glossary, which is provided on as "as is" basis.
- A :
Accident - An unplanned and unexpected event which occurs suddenly and at a definite place.
Actuary - A specialist in risk analysis, especially as it relates to insurance calculations such as premiums, reserves, dividends, and insurance and annuity rates. They usually work for insurance companies, particularly Life companies, to evaluate applications based on risk.
Additional Excess - This excess may be imposed in special circumstances, for example on high performance cars. It is payable in addition to any other excesses.
Adjuster - Also known as an assessor, is a representative of the insurer who seeks to determine the extent of the company's liability for loss when a claim is submitted.
Annuity - A contract sold by an insurance company designed to provide payments to the holder at specified intervals, usually after retirement.
Arson - Any unlawful setting fire to property.
- B :
Body Corporate - A group consisting of the owners of each strata property, established to maintain the common areas of flats or units and to take out insurance for the common areas.
Broker - An intermediary, who acts on behalf of a person who is applying for insurance. They earn a commission from the insurer, however, they have a responsibility to obtain the best cover for the best price possible. In certain circumstances a broker can also act as an agent for the insurer in terms of issuing a policy or collecting a premium.
Bullion - Precious metals, such as gold, in the form of ingots or bars.
- C :
Cancellation - The termination of a policy before the expiry date.
Carrier - Sometimes used to describe the insurer. Not generally used because of confusion with carriers of freight.
Certificate of Insurance - A certificate that acts as proof that a policy has been issued. Usually requested by a financial institution.
Certificate of Rating or No Claim Bonus - A certificate that acts as proof that a person has earned an insurance rating or no claim bonus entitlement.
Claims Ratio - The ratio of the cost of claims to earned premiums.
Collection or Set - A group of items of sufficiently common type, appearance or nature that they reasonably belong together and that is devalued if one or more of the group is lost or damaged.
Combined Ratio - A combination of the claims ratio and the expense ratio.
Common Law - The principles of law arising from court decisions.
Comprehensive Insurance - Provides specified cover for damage to the insured car as well as damage the insured car may cause to the property of others.
Commission - A fee charged by a broker or agent for services in the sale of an insurance contract.
Consequential Loss - A subsequent loss that results from the direct damage e.g. public transport costs incurred when a car is off the road due to and accident.
Cooling off period - May differ form country to country. In some countries it may be a set time frame, set by a Federal law which provides that you can cancel your policy within a said time frame (Example: 14 days) of its purchase date.
Cover and covers - Means the protection provided by the policy.
Cover note - A Cover Note informs the insured that coverage is active - often interim cover.
Coverage - The scope of the protection provided under a contract of insurance.
- D :
Depreciation - A decrease in the value of any type of property over a period of time resulting from use, wear and tear, or obsolescence.
Direct insurer - Is an insurer which deals direct with the consumer rather than through an intermediary or agent.
Disaster - A disaster is said to have occurred when the normal community and organisational arrangements cannot cope with a hazard impact.
Due date - The date a policy is in force to and by when a renewal premium must be paid.
- E :
Earned Premium - The amount of the premium that has been "used" during the term of a policy. For example, if a twelve month policy has been active for six months, half of the total premium has been earned.
Effective date - The date on which the cover of an insurance policy commences.
Endorsement - Means a special condition that applies to a policy. For example, an endorsement may state that drivers under a nominated age are not covered under the policy.
Excess - An excess on a policy is the first amount that must be contributed by the insured towards each claim.
Expense ratio - A measure of an insurers expenses in operating its business.
- F :
Fine Print - A reference to imaginary small type in a policy document purportedly containing exclusions, reductions, exemptions, and limitations of coverage. It is now a requirement for policy documents to comply with minimum type size.
Fire - Means burning with flames.
Flood - Means the inundation or covering of normally dry land by water which: escapes or overflows from, or cannot enter, because it is full or has overflowed, or is prevented from entering, because other water has already escaped or been released from it, the normal confines of any watercourse or lake, including any that may have been modified by human intervention, or reservoir, canal, dam or storm water channel. Flood does not mean storm water run off from areas surrounding the site or water escaping from any water main, pipe, street gutter, guttering or surface.
Fraud - The term "fraud or dishonesty" encompasses all those risks of loss that might arise through dishonest acts or omissions.
- G :
Gross Premium - The net premium plus operating expenses, commissions and other expenses.
- H :
Hazard - A situation that increases the probability of the happening of loss arising from a peril, or that may influence the extent of the loss. For example, accident, fire, flood, liability, burglary, and explosion are perils. Slippery floors, flammable liquids, unsanitary conditions, unlocked and unguarded premises and poor roads are hazards.
- I :
Indemnity insurance - Type of insurance that restores the individual as close as possible to the financial position that they enjoyed before the loss.
Insurance - A device for transferring specified risks of individual persons to an insurer. The insurer agrees, for consideration (usually payment of a premium), to assume, to a specified extent, certain losses that may be suffered by the insured.
Insurance schedule - Sets out the information given to an insurer upon which the decision to offer cover is made. It also displays the individual details of a policy.
Insured event - Occurrences which cause loss and damage which are listed in the relevant policy.
Insured - The party to an insurance arrangement to whom the insurer agrees to provide cover against specified losses, or to render services, subject to the terms of the insurance contract.
Insurer - The party to an insurance arrangement who undertakes to provide cover or to render services, on the happening of specified events.
Investment Income - The return received by insurers from their investment portfolios.
- J :
- K :
- L :
Lapsed Policy - A policy which has been allowed to expire because of non payment of premiums.
Leasehold - An agreement which gives a person the right to exclusive possession of a property.
Loss - Generally refers to the amount of reduction in the value of an insured's property caused by an insured peril. In an insurance sense it usually does not mean "misplacing" an item.
- M :
Market Value - The fair price for which something can be sold in its current condition.
Moral Hazard - A condition of morals or habits that increases the probability of loss from a peril. An example would be an individual who had previously arranged for the theft of his own car to collect the insurance.
Mortgagee - The lender in a mortgage contract.
Mortgagor - The borrower in a mortgage contract.
- N :
Negligence - Failure to use a degree of care which an ordinary reasonable person would use under the given or similar circumstances. A person may be negligent by acts of omission or commission or both.
New for Old (Home Insurance) - Replacing your existing old damaged items or equipment with new ones.
- O :
OEM - Original equipment manufacturer. Means the original manufacturer of the car or part.
Overinsured - A term used to describe the condition that exists when an insured has purchased coverage for more than the actual value or replacement cost of a subject of insurance. It is also used to describe a situation where so much insurance has been obtained it constitutes a moral hazard.
- P :
PIN - Personal Identification Number
Peril - The cause of a possible loss. Not to be confused with hazard.
Personal lines - This term is used to refer to insurance for individuals and families, such as private car insurance and home insurance. Contrast with business insurance and commercial lines.
Period of cover - means the current period for which we have agreed to provide you with insurance cover. The current period is shown on most recent of your insurance schedule and renewal notice and any receipt we may send to you. When we make a write-off payment, the period of cover comes to an end.
Policy - means the Product Disclosure Statement and the policy schedule.
Policyholder - Generally use to describe the policy owner and/or insured.
Policy schedule - a notice showing the particular details of a policy.
Premium - The price of insurance cover for a specified risk for a specified period of time.
Proximate cause - The direct, real, or operative cause of loss or damage, as determined by applying common sense standards.
- Q :
- R :
Rate - The cost of a given unit of insurance.
Ratings - are a discount off your comprehensive car insurance premium. The discount increases each year providing no claim that reduces your rating is made on your policy. It keeps on increasing until it reaches the maximum rating level, called 'rating one'.
Reinsurance - A position whereby one insurer transfers all or part of its risk of loss to another insurer. The other insurer is called the "reinsurer" or reinsurance company.
Renewal Certificate - A certificate which is used to renew a policy. It refers to the original policy, keeping all of its provisions, without restraining all of the insuring agreements, exclusions, and conditions.
Renewal Premium - The premium paid for a renewed policy.
Retaining Wall - Means a wall that supports or confines a mass of earth or water.
Risk - General meaning is a thing or person insured.
Risk management - Management of the risks to which a company might be exposed. It involves analysing all exposures to the possibility of loss and determining how to handle these exposures through such practices as avoidance, reducing the risk, retaining the risk, or transferring the risk.
- S :
Salvage - Property taken over by an insurer to lower its loss.
Statute of Limitations - A law that specifies a time limit for which a person can bring a legal action for a claim.
Strata Title - A system of title that allows the owner of a unit, in a block of units, to have a separate title for that unit
Storm - Means violent wind (including a cyclone or tornado), thunderstorm or a heavy fall of rain, snow or hail.
- T :
Term - Under insurance law it means the period of time for which a policy is issued.
Total loss - A loss of sufficient size so that the property cannot be economically repaired or it can be said there is nothing left of value. The complete destruction of the property. The term is also used to mean a loss requiring the maximum amount a policy will pay.
- U :
Underinsurance - A condition in which not enough insurance is held to cover the value of the insured property. This is particularly common with home contents insurance.
Underwriter - A technical person trained to evaluate risks and determine premium rates.
Unearned Premium - General meaning is the premium that is owed to the insured if the policy is cancelled.
- V :
VIN - Vehicle identification number
Valuation - Estimation of the value of an item, usually by appraisal eg. Jewellery appraisal.
- W :
Write off - Company declares the insured car is declared a write off when in their opinion, it is so badly damaged that it would not be either safe or economical to repair or if the policy covers theft, when it has not been found within 14 days of you reporting its theft to the company and we are satisfied that the claim is in order.
Write - To underwrite, or to accept an application for insurance.
Written premiums - The total premiums on all policies written by an insurer during a specified period of time, regardless of what proportion has been earned.
- X :
- Y :
You/your - Generally refers to the named insured.
- Z :
|
Home
Help
Bookmark
