Glossary Of Terms

Glossary of Terms

Insurance is plagued with an exasperating jungle of confusing terminology.  It is hoped that the brief list of insurance terms provided below will assist the reader to improve his understanding and communication on at least some insurance matters.

Act of God

An accident or event that is the results of natural causes, without any human intervention, that could not have been prevented by any reasonable foresight or care

Adjustment

The process of determining the cause, the extent of loss and amount of indemnity the insured should recover under his policy

Agent

A person or firm who represents the insurer in negotiating, servicing or effecting insurance contracts.

Average

A cluase in an insurance contract providin that losses will be paid int eh proportion that the amount of the sum insured bears to the entire amount of the property at risk at the time of loss. Sometimes refferred to as the insurer's safegaurd against under-insurance. The insured is regarded as his own insurer's safegaurd against under-insurance. The insured is regarded as his own insurer for the difference two amount.

Brokers

A professional person or firm who solicits insurance and places orders for coverage with insurance companies designated by the insured or with companies or their own choosing

Cancellation

Termination of the insurance cover prior to the normal expiry date of the policy

Claim

A demaind for payment under an insurance contract. The estimated or actual amount of loss caused by an insured event.

Claimant

One who makes or presents a claim for a loss suffered

Covernote

A document giving a written statement of temporay coverm usually pending the insuance of the policy document

Endorsement

A variation of the terms of the policy

EXCESS

A provision under some class of insurance that specifies an amount to be deducted from any loss and above which the insurers pay.

Insurer

A company authorized to transact and accept risks.

Lapse

The expiration or termination of an insurance policy at is renewal date, sometime owing to non-payment of the renewal premium

Liability

The amount of money the policyholder agrees to pay to the insurance company for their acceptance of his risk.

Policy

The condition of being bound in law and justice to do something. THe probable cost of meeting an obligation.

Policy Holder

The individual or firm insured

Premium

The amount of money the policyholder agrees to pay to the insurance company for their acceptance of his risk.

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