Common insurance terms
Common insurance terms
Insurance companies work hard to make their products as accessible and easy to understand as possible. Of course, as in any specialist industry, there are some distinctive terms that insurers use that you may not often hear in everyday conversation. Here is a guide to some of the most common insurance terms.
Act of God: An event that occurs because of natural causes, without human intervention.
Adjuster/Assessor: A person appointed to evaluate the extent of the insured's losses when a claim is made.
All risks: All risks policies cover a comprehensive range of loss and damage to property. These policies cover all damages to property not excluded by the policy document.
Broker: An insurance agent who generally acts an intermediary between insurers and insured. Niche brokers have specialist industry experience.
Comprehensive motor insurance: Extensive motor insurance that will pay out for damage caused to your vehicle by theft, accident, fire or a range of other causes, as well as cover third party damage for which you are liable.
Depreciation: The decrease in value of an asset.
Excess: The portion of a loss which the insured person must pay. If the claim is lower than the excess, then the insured must pay this cost.
Liability: A claim upon your assets by another.
Life insurance: A policy agreement whereby the insurer will pay an assured cash sum to a designated beneficiary upon the death of the insured person.
Pay As You Drive Motor Insurance: A by-the-kilometre car insurance product which only charges you according to the distance you drive.
Replacement cost: The value of an item calculated in terms of replacing that object.
Short term insurance: Insurance cover that is taken for set periods, often from year to year.
Third party: A person other than the insured and the insurer. So third party motor insurance will protect you against liability for damage caused to other vehicle(s) in the event of an accident but not to your own vehicle.
Underwriter: Commonly refers to the insurer itself; the individual or organisation tasked with deciding whether or not to issue an insurance policy.
This is an overview of some of the terms employed by the insurance industry. These expressions are not designed to confuse or bamboozle clients. Rather, they are a useful way for industry specialists to convey sometimes complex concepts efficiently.
If you are unsure about any aspect of your insurance policy, do not hesitate to contact your insurer.
Speak to an insurance broker for a professional assessment of your needs and a personal explanation of the insurance options available. A broker will make choosing the right insurance products as simple as possible, and can guide you with any administration involved thereafter, such as when making a claim.
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